Episode 58 Homes Under the Hammer

Hello and welcome to the show.

Buying a property and doing it up is a dream for some,

but for many, it's a reality.

So are you a doer or a dreamer

when it comes to buying homes under the hammer?

Buying at auction is exciting, but also it can be quite stressful.

It all happens so quick.

Literally in a split second, you could have bought a house!

So if you are planning on buying at auction,

just make sure you're prepared!

So let's find out what happened

when the hammer went down on today's programme.

First up, I give this mid-terrace in County Durham the once-over

and dish out some words of wisdom.

Do not try this at home!

I'm in an attractive four-bed property in Lewisham

which leaves me unsatisfied.

And this is where it gets really disappointing!

And in Tylorstown, Mid Glamorgan,

there's a two-flat conversion which needs some urgent attention.

All in all, it's really bad!

All these properties were sold at auction.

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

-when they went under the hammer.

-£10,500.

Well, today I'm in the North East of England

underneath the wings of Antony Gormley's famous sculpture, Angel of the North.

Once a controversial work of art,

it's become a symbol of the North East.

20 metres tall with a wingspan of 54 metres

and seen by an estimated 90,000 people travelling on nearby roads and rail links.

# I sit and wait Does an angel contemplate my fate? #

Now a much-loved fixture of the landscape,

this statuesque angel was designed to create a sense of embrace.

But will the house I'm here to see be just as welcoming?

I'd better pop over there and say "halo"!

# I'm loving angels instead.#

Well, over to the south of Birtley

and the property I'm here to see.

From the outside it looks fairly angelic.

The guide price, though, might tempt you even further. £35,000!

Let's take a look.

These solid little red brick houses were built to last.

This is a great residential area with excellent transport links

to Durham, Newcastle and Sunderland.

With its attractively low guide price,

I can't wait to see what's inside.

Through the front door, a little entrance hall. Stairs up to your bedrooms

and I like the fact that there's a separate door here

which means that you can separate the front lounge from the entrance - keeps the cold out.

Lounge itself - not too bad.

It's got what you need - a few nice details.

A fire there - I mean, it's not to everyone's taste,

but at least it's an open one.

Sadly, the house gets worse, the further you go into it.

Back here you've got this kitchen which isn't a bad space,

but obviously needs some tender loving care.

Then further, there's the only loo and bathroom in the property,

and that really is in a bit of a state.

So reasonable at the front... and getting worse.

In general, though, for that guide price, not a bad start.

OK, so it's not exactly heavenly,

but with some love and attention, this place could get its glow back.

# And I know I'll always be blessed with love. #

So upstairs, and there's a really nice landing for the size of house,

I say that because often landings are forgotten -

but they really give a spacious feel, and for the sake of losing

a bit of space in the bedroom I think it's a really good thing to go for.

Up here it is a fairly simple layout.

Just two bedrooms - one at the back which is fairly small.

But then towards the front, a really nice-sized double bedroom. So... Oh, squeaky floorboards!

Apart from the fact that you might consider bringing the bathroom up here,

I don't think so - leave it as it is, renovate it,

do it up, and you've got yourself a great little house!

It looks a little tired and worn at the moment, but this would make a great family home.

Whilst I would keep the current bathroom where it is,

I do think that if possible,

it would be great to have a more convenient convenience too.

And that means upstairs.

At the rear of the property, a little courtyard area,

but also an opportunity, because either side of the house,

the properties have actually done a double-storey extension at the back here,

and it's a fairly obvious thing to do, to build above the existing loo here -

that would create lots of space upstairs

and possibly you could use the wall of the extension next door -

bit of a party-wall issue, but it might save on your building costs.

But a bit further out here, this is the rear alleyway,

and as you can see, it's in quite nice condition,

recently tarmacked, and that bodes well for the area.

When it comes to spending a penny on my thoughts, that's it,

but what does a local estate agent reckon?

The property is a good standard terraced house, well-built -

just needs some work inside.

If it was done to a good high standard, it would be

a great rental property, providing good income for an investor.

-Otherwise it will be a good first-time buyer's house.

-All sounding good!

What does she think this one could fetch on the open market?

Once renovated, I do feel that this property could achieve £70,000 in good condition.

Great news, especially given that the guide price was just £35,000.

But how would it fare if it was to be a rental?

I think this property, once it's renovated,

could achieve £400 per calendar month.

Well, it could definitely do with a clean,

but all in all, intrinsically this is a fantastic house.

Good rental yields, oh - and a nice place to live!

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

Can I have £35,000 to start?

£35,000 on the left-hand side. Do I have 37 anywhere else?

I've got the one bid, the lady at £35,000. Do I have 37 anywhere else?

37, the gentleman in the blue jumper at the back. 39, 39 bid. 41. 41 bid. 43. No?

Gentleman in the blue jumper at the back wall. £41,000. Do I have 43 anywhere else?

Gentleman in the front row at £43,000.

Do I have 41 anywhere else? Sorry, 41? 44. 44 bid.

45. 45. 46. 46. 47.

Lady standing £46,000. I saw a hand over there somewhere.

Anybody else in at 47?

We're here and we're selling it once at 46.

I'm selling for the second time at £46,000.

46,500 bid - gentleman standing.

47. 47. 47 bid. 47,500.

47,500 bid. 48.

No? To the gentleman standing in the T-shirt, 47,500.

And selling once for 47,500.

I'm selling for the second time at £47,500. 48,000 the lady bid.

Lady on the left-hand side with £48,000.

We're selling to the lady on the left-hand side for £48,000.

And we are selling once at 48, for the second time at £48,000.

Sold to the lady on the left-hand side.

She got there in the end!

With that final bid of £48,000, the house sold to Pamela.

13, lucky for some!

She owns her own hairdressing salon and spa as well as a couple of gift shops. A busy lady, then!

Is she moving into property development too?

I caught up with her at her new purchase to find out.

-Pamela, good to meet you. Congratulations!

-Thank you.

-Tell me why you wanted to buy this place.

To be truthful, I didn't know I was going to buy it.

The night before, it was a Sunday, I got a quick e-mail through,

which was telling me about auctions.

I said to my husband, there's a couple of houses here. He went, "Oh yeah." Left it.

On the Monday, I took my daughter to Operatics, and I said,

"I might be a little bit late - can you pick Mia up if I'm late?"

"Where are you going?" I said I might have a look at the auctions. "Oh, yeah!"

He went, "Pamela!" I said, "What?"

He says, "What have you got the cheque book for?" I said, "You never know!"

And he went, "Yeah!"

So off I went to the auctions, never been in one before. I hurried in.

There was thousands of people there, so I walked through and they said, "Plot 13, Birtley."

I went, "Oh, yeah?" And my hand just went... and I was just going like that.

-And before I knew it, I'd bought the house.

-Gosh!

But you don't randomly decide to... buy a house!

I mean, it isn't a bar of chocolate!

No, I think because I work in the area,

and know that a lot of people are wanting to rent places

and a lot of people can't afford to buy places,

I think it's a big rental area so hopefully, I thought,

if I seen something that was in our price bracket

that I could go for, then hopefully I'll make something of it.

-Had you looked at the house before you bought it?

-No, never seen it.

-Had you read the legal pack?

-No.

-Ah!

-So you hadn't seen or read the legal pack?

-No.

-So you went on what, then?

-The auction particulars?

-Impulse?

-Impulse.

-Impulse.

Bidding blind is a very dangerous game to play.

I cannot emphasise enough how badly it can all go wrong.

But in this case Pamela seems to have lucked out.

-Do you think you got away with it?

-Yes.

What did you think when you first saw it, having bought it?

I knew in the auction what it was up for. I knew it would be in a state when I got it.

So in the back of my mind, I thought,

how much would I expect to have to renovate it with.

So in the back of my mind I had an idea.

I thought maybe it might need a new kitchen, a new bathroom,

and obviously your normal things.

My first thing is to take out the bathroom, completely take it out

and there's wood on the ceiling - that needs to come down.

So I'm not quite sure what we'll find when we do that.

We might need to put a new ceiling in there.

A new kitchen - that's all got to come out.

Upstairs, I may do something with the loft - I'm not quite sure.

The bedrooms - there's fitted wardrobes that need to be pulled out too.

And then all of the carpets and everything. I may reposition this door - I'm not quite sure yet.

So a sizeable list.

But Pamela's aiming to do it for £8,000-£10,000

and in just nine weeks, using tradesmen for most of the work.

It may be ambitious, as this is her first property project.

The only other house she owns is with her husband Phillip.

So what does she plan to do with it when it's all complete?

If it's better for us to sell it, I may sell it,

then put some money down on another property, and just build it up.

Or maybe build up a portfolio. I don't know. Who knows?

It might be the beginning of something.

And will you look at the property before you buy them next time?

It depends. Depends.

-You got away with it this time, but it could have been horrendous.

-Yes.

-I probably might view it!

-Probably might?!

It depends on where I'm at and what I'm thinking of at the time. It depends on how impulse I am.

Do not try this at home!

-But anyway, good. It's great to meet you.

-Thank you.

-Congratulations and we look forward to seeing how you get on.

-Great.

Thank you very much. Thank you.

There you go. A lesson in how not to buy property.

But you've got to smile,

and I think in this case Pamela has got away with it.

Work to be done - how's she going to get on? What will it turn out like?

You can find out later in the show!

In 1816 Lewisham was described as a rural village on the banks

of the Ravensbourne that could only be reached by a long coach ride.

Well, it's certainly moved on in the last 195 years, and I definitely

didn't arrive in a horse-drawn carriage,

although that would have been quite nice

and I would have made a grand entrance today.

But no, I've travelled this morning by train.

Now, the nearest station is Hither Green, and it's just 10 minutes from London Bridge. Perfect!

# And I smile as I sit because I've found my perfect fit

# And it's you. #

So an ideal location for commuting, but will the property that went under the hammer be just as perfect?

I'm here to see a terraced property with four bedrooms.

The guide was set at £240,000.

That sounds great when you consider the last property

that sold on this road went for £408,000!

Here's the property in all its... glory? Hm. Not keen on the windows.

It might not look all that pretty from outside, but a peek next door, look,

shows you what it could look like.

I'm excited - I'm going to have a look around!

One thing this house doesn't lack is space.

It's got wonderful proportions and it feels very solid.

Bit disappointing with the storage heaters.

They're still efficient,

but gas central heating would be much better.

Got a really nice-sized hallway here.

A little doorway to the lounge.

Another doorway to a sort of second reception room.

Now, it's a weird one, this. You've got a huge space.

There would have been a wall originally here so you'd got two separate reception rooms.

This, as it stands, would be too small with the wall up,

and this here, well it's a little bit redundant

because the kitchen's way back there,

I think I'd be inclined to maybe put a wall or something along here.

Have a little room here.

Luckily it's got a window, so you could call this an office.

You could move the door along and have a really nice-sized lounge.

You've got a bay window.

I'd like to see the original windows be reinstated here

because then I think the house would have the kerb appeal it deserves.

A nice fireplace as well wouldn't go amiss -

something in keeping with the period of the property.

But once you've stripped it of all this old-fashioned wallpaper

and swirly carpet, it's got the bones to be a really good property.

But...

..continuing further back into the house, down a couple of steps,

is the dining room with a bay window opening onto the side return.

Not exactly the sort of view that would make dining here a pleasant experience.

It's funny how interior layout tastes change.

The kitchen in this house, that was guided at £240,000,

is almost hidden away.

A sad little room that no-one seems to love.

Nowadays, buyers do look for kitchen space and usually want it as an integral part of the dining room,

so I'd have this wall down straight away.

I'm beginning to see real potential here.

You know, the more I wander around this house, the more I like it.

Look at this character!

It could be sensational, once somebody's put their stamp on it!

Upstairs, there are four bedrooms - one at the back there.

You've got a fair-sized bedroom there.

And this is where it gets really disappointing.

Now you'd like think this would be the master suite

at the front of the house with the beautiful bay window, but look at the size! It's tiny!

Partition wall!

Well, if you think this is tiny, the room next door is even smaller!

You couldn't even get a single bed in there.

So my plan would be to smash this down, open this space up,

and have one really big bedroom at the front of the property.

Obviously, this was a three-bedroom house originally.

The two back bedrooms are a good size, plus there's a bathroom and separate loo up here.

It looks as though there's potential to develop the loft - maybe that's where the fourth bedroom should go.

And then, there's the garden.

Now this garden is not any old garden.

It doesn't have any grass.

But you may think it looks like it has grass,

but it's actually Astroturf!

Great if you're thinking of putting up swings and slides

and your kids love to play football outside all day,

but it's not really that attractive and it's quite scratchy underfoot

if you don't have any shoes on, and it's noisy!

I would be tempted to get this up and lay down a proper lawn,

or maybe even put some decking in this area here.

Now, people often overlook the garden space when renovating -

it can be the last job, and it shouldn't be.

A garden can be just as important as the house

when it comes to securing a buyer or a tenant.

This could be the deal-maker.

But leave things as they are and it could become a deal-breaker.

# My only prayer will be That some day you'll care for me

# But it's only make believe. #

But what did the local estate agent make of this property

that went to auction

guided at £240,000?

We invited one along to advise on possible layout changes.

Downstairs I'd keep the reception as a through-reception.

However I would knock the wall down between the kitchen

and the third reception to create a big kitchen/breakfast room.

And would it be worth extending the property up into the loft? Is it worth doing?

I think it is a very good idea

because there is a huge demand for four-bedroom properties.

You can also get an en-suite up there as well,

so making it a four-bedroom, two-bathroom property.

And what about the rental income? How much could the house generate with the three original bedrooms

and with the fourth bedroom in the loft?

As a three-bedroomed house,

I would recommend that you market the property for rentals at £1,400 per calendar month.

And as a four-bedroomed house,

I would recommend that you market the property for £1,700 per calendar month.

After a full refurbishment,

how much could the house be worth in its current configuration,

and what impact would adding a fourth bedroom up in the loft have?

I would recommend that you market the property at £399,950,

to achieve £385,000 and upwards.

If you turned the property into a four-bedroom house,

I would recommend that you market the property at £450,000,

to achieve £435,000 and upwards.

I think this is a great one to go for, and it's nice to think

that even in this sticky economic climate, well, there could be a healthy profit margin

if somebody sticks to a strict budget.

Let's find out who wanted this opportunity

when it went under the hammer.

Right. Lot 29. Attractive four-bed mid-terraced house.

As you can see in the photograph, nice-looking building.

I don't know, er... 250? 230?

Thanks. 230. 235.

235. 240, standing up.

240. 245. 250.

255. Come to you. 255. 260.

265. 270. No?

266, if it helps either of you? Yes, it does! Sorry.

266. 267. 268.

269. 270.

271.

There was a lot of interest in the property at the auction.

We re-join the bidding a little later.

287 sitting down. Anyone else? 287 first time.

288. 289. 290 at the back.

Yes? 291.

292.

292, if not, 291 sitting down. First time, second time, third and last time

if you're all done, sold 291.

Slightly hidden from view, but with his £291,000 bid,

the victor in that Herculean bidding battle was Barry.

Having left the world of finance behind,

he now travels the world instead.

# Tibet Sydney.#

This will be his second property purchase.

I want to find out more about his travel and property plans.

-Barry, congratulations!

-Thank you.

-So did you think you were going to pick this house up

for such a good price on auction day?

It was quite close to my upper limit.

But I was quite happy to get it for the £291,000.

What was it about this property that you liked so much, that made you want to go to auction?

I was looking for a nice-sized residential property

that needed some modernisation and this one fitted the bill.

It's actually quite deceptive. When you walk in, it's a lot bigger than you first imagine.

Yes, it's got great-sized rooms

and it's got potential to develop it even more.

It's an ideal house to get cracking on, really.

So Barry wants to take this Tardis-like house

and turn it into a much plusher pad.

But I was keen to find out what he did before he started

developing property.

I used to work for a local recruitment company and I gave it up,

some time a couple of years ago, and decided to go travelling.

And when I came back, I've always been interested in property

but never had the time to do anything with it,

so I decided to buy another place at auction, and did it up and sold it, and this is my second one.

Have you got a background in property?

-Are you familiar with the skills of the building trade?

-Not at all.

It's all sort of learning on the job, as much as anything else.

So do you feel capable to take a project on such as this?

I feel pretty confident, after my experience from the last one,

I've learnt from my mistakes

and I'm pretty confident that I can actually do something decent with it.

-Are you going to work with what you've got here?

-Yes.

I'm going to knock down some walls, extend a kitchen/diner, and probably

knock it back to a three-bedroom. The original must have been a three-bedroom.

-What's your budget?

-Hoping to get it done within £20,000.

Do you think you could do that?

It'll be tight, but I think so, yes, if I do a fair bit of work myself.

Barry will be doing as much as he possibly can, including decorating and laying the floor.

And he will actually be letting the grass grow under his feet

when he hauls up that artificial grass and replaces it with a lawn.

But he will have to get qualified electricians and gas fitters if they're required.

That could eat into his ambitious budget,

and he's rather optimistic with a mere three-month timescale too!

And I'm sure you're looking forward to selling it, getting your money and going off travelling!

-So where to next?

-I'd like to go to India and south-east Asia. I've spent a bit of time in Thailand,

but I've never been to India. I'm going to go to Vietnam, Cambodia,

and travel around there for a couple of months.

-What is the grand plan for you? Do a house up, off you go - is that how you're doing it?

-Exactly, yes.

Do a house up and hopefully with some of the profits go travelling,

come back, buy another one, do it up, and do that for as long as I can, really.

Barry, good luck with this. I hope you stick to that £20,000 budget, because if you do,

-I think you've got a lot of profit coming your way. Well done!

-Thank you, Lucy.

I hope jet-setter Barry can stay in the UK long enough to complete this project!

Joking aside - what a great way to live.

Develop a property, sell it on, go off exploring the world. Jealous!

But there is some serious work ahead of him

if he stands to make the profit he's expecting.

Will he do it in three months for £20,000? I can't wait to find out.

Keep watching,

and you can find out if he makes a success of this later in the show.

Coming up - I'm falling for a property in mid-Glamorgan,

or is it the other way round?

Literally, there is a danger of this whole property collapsing!

In Lewisham, south-east London,

did Barry manage to give this place a total transformation?

I think it would be difficult to recognise it from how it was before.

But first, is Pamela done with the renovation

and ready for her next decision?

I'll either have a "to let" sign up or I'll have a "for sale" sign up.

Back now to Tyne and Wear and under the gaze of the Angel of the North,

this property sold at auction for £48,000.

Its new owner, Pamela, hadn't even viewed it or read the legal papers.

Not my recommended tactics at all for buying at auction.

-Will you look at the property before you buy them next time?

-It depends.

Depends.

-You got away with it this time but it could have been horrendous.

-Yes.

-I probably might view it.

-Probably might?!

It depends on where I'm at and what I'm thinking of at the time.

It depends on how impulse I am.

Do not try this at home!

Well, in fact, Pamela's impulse buy turned out OK for her this time.

The house was structurally sound and just needed beautifying

and given that she owns a hairdresser's and a spa, who better to make this place pretty?

# Just a little bit of green

# Clouds my eyes to what I see

# Just a little bit of green when I see you. #

Since you were last here I've taken it back to the bare walls everywhere.

There's been new walls all in the large bedroom, all over.

There's been two new walls in the little bedroom.

We took the carpets up - replaced the carpets everywhere.

The biggest task was definitely the kitchen and the lounge,

because as you can probably see from the last time, the lounge was a right mess.

Took out the fireplace, took out the marble casting

that was in the hearth, replaced it with a very contemporary fire.

It's not only the lounge looking bang-up-to-date now.

Just check out the new kitchen - making you green with envy?

# Just a little bit of green. #

I wanted to keep all of this wall clear,

because I think that visually gives you a lot more space.

The cooker that we put in - we changed it from what it was.

We put an extractor fan in. It's an electric oven, gas top. We went for a round sink unit

to give it more space and keep it contemporary as well.

It's modern, it's stylish - it's a quality job, as is the work done in the downstairs loo.

I think Pamela has made a sensible decision in financial terms here.

It would have added considerable expense

to move the entire bathroom upstairs,

although maybe a loo up there would have been a welcome addition.

Buying this house blind meant Pamela had no idea how little or how much work

she had to do to the property

until she walked through the door - a scary prospect for any developer.

It was in a state,

so I was prepared to take it back to make it look lovely.

So nothing kind of bothered me, it was just getting the right people in

to do the right jobs in the timescale that I wanted to have it finished by.

Talking of timescale, her aim was nine weeks for all the work.

She's pretty much been spot-on with that, but what about the budget?

She'd hoped to get it all done on £8,000-£10,000.

I've gone just over the eight. I've done about 8,750, so I'm quite happy with that.

I've kept it below the ten, that was good.

Well within budget, then. But will she see a good return on her outlay?

Let's ask two local property experts for their opinions

on the finished result.

I absolutely can't believe it.

The changes are phenomenal in this house. It's unbelievable.

Quite a stylish house. Very nicely done.

Yes. Should appeal to first-time buyers, I think.

I think the colours work really, really well in this house.

It does bring it together a little bit more. It's lovely.

The kitchen and the bathroom are the two key things.

And they've done a nice modern finish with both the kitchen and the bathroom

and easy maintenance, so good.

The only thing I could say is that the downstairs bathroom

is always a bit of an issue with people.

If there'd been a way to put the bathroom upstairs it would have been superb,

but obviously she's done what she could with what she has, and it's worked really, really well.

Keeping the downstairs bathroom isn't ideal, but I think with

the layout of the house, it's going to be very difficult to change that.

Pamela hasn't decided yet if she wants to let or sell the property.

Will some valuations help her make up her mind?

I think this property would rent very easily,

and at this standard, I would expect to achieve approximately £400,

perhaps £425 per calendar month.

In the rental market at the moment,

I would think she'd be looking at around £450 per calendar month.

The rental figures - I would be quite happy with £450 plus.

I don't really want to be renting it out at less than the 450.

I think it is worth that and I know of other people in this street

who pay 450 and it's not to the standard of what this house is.

Including the work, she's spent just under £57,000 here.

So that £450 rental figure would give her a 9.5 per cent yield.

Pretty impressive. How much could she hope for if she resold?

I would value this property at £65,000.

I think this would sell very, very well.

First-time buyers would be very interested,

particularly because of the finish and I would expect to achieve about £70,000.

Very happy with the £70,000.

If I could get £70,000 I would probably go on the sale side of things.

I still haven't come to the decision whether I want to rent or sell yet.

I'll take a bit of consideration over that over the next day or so,

then I'll make a decision ad I'll either have a "to let" sign up or I'll have a "for sale" sign up.

Pamela isn't being quite as impulsive

when it comes to this decision.

But since filming, she's opted for rental

and is getting £450 a calendar month.

I'm visiting a village in the Rhondda Valley, south Wales,

an area once known for its coal mining.

# I'm a coal-mining man I am who I am

# And I wouldn't have it any other way. #

This is Tylorstown, named after Alfred Tylor, who had a mine

here in the 19th century.

So what am I here to see? Well, interesting one, this.

It's a former shop which has planning permission

for conversion into two flats. This is it.

Now, the auction catalogue does say that some work has commenced.

That's not the most interesting thing.

The most interesting thing is the guide price,

which was 15 - that's one five - £15,000!

So upstairs to one of the flats,

and the larger of the two flats is through here.

On two levels - this level here, and then downstairs to whatever's down there.

This has been converted into some kind of open-plan living area.

You've got the kitchen at this end.

Well, sort of! Oh, my goodness, what a mess!

But yes, it's obviously a partly-completed project.

Now, you've got this area at the back here which again

has had a bit of plastering on the walls

but I'm a bit concerned about the amount of damp which is still coming through up here

and in fact, that wall there is absolutely sopping wet.

Now, if somebody started to work on this,

I would not have expected that to be in that condition

if the job had been done to a reasonable standard,

and that's the problem with taking on a half-completed

or partly-completed restoration project.

You never quite know how good the work that's been done

so far has been done,

and in some cases it's almost better to rip it all out and start again.

Unsurprisingly, the lower ground floor of this bottom flat

is also a work in progress with three rooms and nothing in them.

Which at least leaves your options on how to arrange it open!

# Baby I'm in heaven So I'd like to start it over again. #

Anyway, onwards and upwards to the smaller one-bedroom flat on the top floor.

So up here, and a little rear area there

which I think is going to be the bathroom.

But looking up, there's a lintel going across there,

and it just does not look like it's been done correctly.

Not happy with that at all.

But you've got your bedroom there

and then through to your kitchen/living room.

As I said, this is a much smaller flat.

Again, half finished, half done.

Again, don't know quite to what standard.

But the big question is, what are you going to do with this place?

Are you going to keep it as two flats?

Or are you going to think about converting it back into one property?

That all comes down to economics - how much it's going to cost

to do either of those options and what that property,

either a flat or a house, would be worth after you'd done it.

It strikes me that this is one of those ones where you're going

to have to be really, really, really careful with the budget,

because what you don't to do is overspend

and not be able to recoup your money.

With every property purchase, finances are of course

a major factor to consider and this property proves it in spades -

something you'll need when it comes to tackling what's out back!

Well, here at the rear of the property it does not get any better.

In fact, in some ways it gets even worse.

But it just goes to show you should always view both sides of a property.

It might sound like an obvious thing to say, but it isn't.

There's a sort of alleyway to come through

and then this rear-access road to get to the back,

and what happened is that when they applied for planning permission,

one of the stipulations was that there had to be parking for two cars,

which is why this has actually been dug out.

The problem is, you would have expected some kind of retaining wall to stop

all that soil and all the foundations of the property

itself slipping this way.

Well, that retaining wall hasn't been put in, so literally there is a danger

of this whole property collapsing towards the rear here.

But when you are at the back, you stare up and you can see all sorts of problems.

I mean, exposed brickwork - that's where the damp's coming in, there.

This extension doesn't look like it's been put on properly.

It's got some kind of a wonky bit at the top.

All in all, it's really bad!

# I'm bad, I'm bad, you know it You know

# And the whole world has to answer right now

# Just to tell you once again Who's bad? #

This place might appear to go from bad to worse, but with that

low guide price of just £15,000, could it really be a bad buy?

We asked a local estate agent

to take a look and give us his thoughts.

This is going to be very challenging.

I would suspect several previous owners have attempted to

renovate this building and failed.

But hopefully, whoever bought this will make it a success this time

and the potential profit will make it worthwhile.

Let's begin with rental.

One-bedroom fully-modernised flats in this area

are achieving in the region of £250 per calendar month to £275 per calendar month.

A two-bedroom flat probably wouldn't achieve much more.

You'd still be looking in the £275 per calendar month.

But that would have to be finished to a very high standard.

What if it was converted from two flats into one house?

A three-bedroom house would achieve in the region of £375 per calendar month.

Perhaps selling would be the more attractive option.

A one-bedroom flat, I would expect to achieve in the region of £20,000

and a two-bedroom flat in the region of £25,000.

Three-bedroom house could be in the region of £35,000.

# And the whole world has to answer right now

# Just to tell you once again Who's bad? #

Well, there's no denying that guide price is incredibly low,

but does it make this property good value for money?

Well, not necessarily.

It all depends how much it's going to cost to sort it out

and how much it's going to be worth as flats or one house.

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

Who's going to get me started at £10,000?

This is pocket money to most of you property people in here,

isn't it, surely?

OK, who's going to start me at 8? Thank you! Here's one.

Thank you - £8,000 I have. 8. Who's going to give me half? Sir? 9?

Thank you. 9,000 I have.

9 and a half. 10 I'm looking for. Thank you, sir. 10,000 I have.

Thank you, 10 and a half. There we are. 10,500 is bid. Any advance?

Sir, are you going to come back in? No?

OK, I'm going to sell it to you, sir, at £10,500.

That winning bid of just £10,500 was made by criminal lawyer Steven.

He purchased it with Mark who runs a building company.

Friends for years, this was their first property project together.

# Welcome to the cheap seats Welcome to the cheap seats

# Welcome to the cheap seats. #

Well, the house may have been cheap, but are these two cheerful!

-Mark, Steve. Great to meet you both.

-Hi there.

-Congratulations.

-Or commiserations!

-Well... I don't know.

£10,500 in 2012 for a house - it's still a bit, whoa! Isn't it?

Definitely!

-Is that what attracted you to it?

-Yes, definitely.

-Yes.

I think we were sat at the auction, and we'd gone there

to purchase something else, and when the auctioneer said

"£8,000, we'll start at", we thought well, we'll give it a go.

-What did you go for originally?

-We went for a property which was roughly £250,000.

-What?!

-We budgeted for about 250, 255 for that.

-255,000?

-Yes.

-And you bought something for 10,500?

-Bought for 10,500Q!

The chap who was bidding, you could see that he really wanted it,

so, you know, we ended up with this!

That's just brilliant!

This duo are certainly upbeat about their unplanned purchase!

But the downside of that is that they haven't viewed either

the property or even the all-important legal pack prior to the auction.

And as a general Homes Under The Hammer rule,

that's a definite no-no.

As a lawyer, you'd think I would look at the legal pack before

I went to auction, which I did in respect of the other property,

so I knew everything about the other property.

We hadn't even looked at the legal pack on this. We just bought it,

which as a lawyer, is not the thing to do, really.

It's not the thing to do if you're not a lawyer,

but as a lawyer, it was criminal!

A least you can see the funny side of it!

Well, or even the irony of it! It could turn out very badly!

But you know, we took the gamble and here we are.

We pulled up outside for the first time,

and we saw the front and were pleasantly pleased, weren't we?

Yes.

We went around the back and I wanted to weep!

-What did you expect for £10,500?

-We didn't expect much.

-When we actually came inside...

-Which was last Saturday...

..we were pleasantly surprised with the inside.

I think it was the outside that is quite daunting.

OK, so here you are. You've got your house.

What are you going to do with it?

I think it would be better off turning it

back into a three-bedroom.

So I think I'd have the downstairs as a living room,

this as a kitchen/diner and the bedrooms upstairs on the third floor. That's my plan.

They both live in Cardiff

and have no interest in being long-distance landlords.

So, rather than letting, they plan to sell it once it's finished.

Ditching the idea of continuing to convert this into two flats,

and making it into one house will keep costs lower,

as they will have to spend less on fixtures and fittings.

How much do you think it's going to cost to get it sorted?

-I think 20,000 won't be far off.

-What's the timescale?

-From start to finish, eight weeks.

-Oh, wow! So a team of how many people doing that?

It'll be about eight.

-It's going to have to be fairly labour intensive to get it done in that time.

-About eight people.

Do you regret what's happened here, or are you just sort of taking it...?

I don't think so, I mean, Mark's confident, so if he's confident...

-There's a lot of weight on your shoulders!

-There is.

He's putting more and more weight on my shoulders as we go along.

Great. Well, it's a really funny story.

Thank you for entering into the spirit of it. Good luck!

-Thanks very much - we'll need it!

-I look forward to seeing how you get on.

-OK. Thanks very much.

Well, Mark and Steve breaking all the rules,

and Steve, a lawyer, not reading the legal pack! Can you believe it?

Now on the face of it, £10,500 - can it possibly go wrong?

Well, in this instance... I think it might!

The property is going to need a heck of a lot of work and I don't

think the local market necessarily supports the amount of effort

and money it's going to take to sort it out,

especially basically just doing it from a resale point of view.

So...

..you'll have to join them later in the show to find out what happens!

Making the correct decisions when it comes to design

isn't just about say, living with the wrong paint colour for a few years.

It can seriously affect your profits.

Yes, turning your ideas into a reality can be a thrill,

but have our buyers got it right?

Let's see what they're up to.

London's calling, and we're back in Lewisham

where Barry had bought this four-bed terraced house at auction for £291,000.

Now there's a man who has the work-life balance sorted.

What is the grand plan for you? Do a house up, off you go?

-Is that how you're doing it?

-That's exactly it.

Do a house up, and hopefully with some of the profits,

go travelling, come back, buy another one, do it up. Do that for as long as I can, really.

He wanted to be travelling again ASAP

so aimed to get the work completed in under three months.

We returned after eight months.

The property's almost finished, so how does it look now?

Simply stunning! So much has been done here.

Barry's put in new central heating, carpets, windows, doors -

and decorated the whole place both inside and out!

The supposed master bedroom upstairs

and the fourth bedroom, which you couldn't even fit

a single bed into, have been knocked together to make a master suite.

And that wasn't the only place that Barry used a sledgehammer!

The kitchen was probably the biggest challenge.

Initially there was a wall here separating the kitchen

from the dining room, which made it a very small kitchen indeed.

So we decided to knock that down and we decided to take out the old recess

and put a range cooker in there.

It's been transformed, really, compared to before.

It's got new furniture, new units, a range cooker,

the floor's been redone, the walls have all been skimmed

and decorated, the windows have been put in,

so I think it would be difficult to recognise it from how it was before.

The kitchen alone cost between £8,000 and £9,000.

Barry had set himself a total budget of £20,000,

which was ambitious enough, but to get the place looking like this?

Once all the bills are in I reckon it'll be very close to 30 grand - a couple of pounds either side,

so 10,000 over - which is 50 per cent over, which is quite a lot.

But we thought it was worth spending the extra money

on getting a nice finish rather than trying to cut corners.

I think he's absolutely right.

Whenever you're renovating a property, of course you want to keep a beady eye on the numbers,

but often you get what you pay for, and spending a little more up front

can mean you reap financial rewards further down the line.

Although he originally wanted to get cracking on the work pronto,

in this instance Barry put his other pastime first.

My partner decided to take some time out - her contract came

to a natural conclusion, so it was more ideal for us to leave

and travel then, then come back and sort ourselves out when we returned.

It's benefited me being away because the market's gone up

in the last two or three months just in this area.

It's very good in terms of transport links, it's got great schools,

a nice park and it's a nice residential area

on the borders of Blackheath and Hither Green and Lewisham.

It's an ideal place to be.

It may have started later than planned, but the project was done

pretty much within his timescale once under way.

And when he did return, he had no hesitation in getting stuck

into the work, especially on the outside, where all was not as it seemed.

If there were any surprises, it was in the garden. We knew there was Astroturf

and there was a shed that was blocking out the window.

I assumed that underneath the Astroturf there was earth and I could just cut it and lawn it.

Unfortunately, there was actually a yard, so I ended up spending about

three days with a sledgehammer breaking that up and getting it

skipped out and getting topsoil in and putting a new lawn in.

So instead of plastic grass, it's now got real grass!

Keeping it real extended to the inside of the property as well.

And it's great that Barry's maintained

many of the property's beautiful period features.

He did think about reinstating a wall between the two reception rooms

but decided it was better to have a large, light space.

Now that it's had a cosmetic overhaul, I think it looks fantastic!

We invited two local estate agents to view the house

and see if they agreed.

My first impressions of the property are very good.

The owner seems to have finished the property to a high standard.

It's finished in neutral colours.

The property's still got some period features

which will appeal to its target

marketplace and I think it will be well received on the market.

It's a lovely Victorian property, nice and airy. Beautiful.

I think it'll lend itself to a nice family home.

With the £291,000 purchase price added to

the £30,000 spent on the work Barry's grand total is £321,000.

If he decided to let the property, what returns could he be looking at?

If I was to rent this property, I think it would achieve round about £1,350 per month.

If the property was to go up for rental,

I would expect it to achieve in the region of £1,400 per calendar month.

I haven't looked into rental, but if we don't manage to sell it, that's something we'll consider.

So they're decent figures, yes.

But letting isn't part of the grand plan,

which is to sell this to fund his next trip abroad.

So what do the estate agents estimate it could sell for?

If the vendor was to put this property for sale, I would expect him to achieve in the region of £400,000.

If I was to put the property up for sale,

I think it would achieve between £400,000 and £410,000.

Yes, I think maybe a couple of months ago

I would have agreed with that, but the market's moved on recently

so perhaps we'll get a bit more than that, but we'll see.

A pre-tax profit of £79,000 - £89,000 is pretty impressive,

but not as impressive as the sale price he did achieve.

The very first couple who viewed the property actually bought it

for £485,000!

Surely making a mint £164,000 pre-tax profit will give him

enough to travel for a while yet!

Yes I'd like to renovate a couple of houses a year and spend the

in-between parts travelling around and seeing the rest of the world.

# Holiday, holiday. #

What a life! Sounds like heaven!

We've returned to Tylorstown, South Wales,

where criminal lawyer Steven and builder Mark made an unplanned

purchase of this, a two-flat property spread over three floors.

It was miles from being finished

but came at the astonishingly low price of £10,500.

That was a whole lot less than they'd planned to spend on auction day.

What did you go for originally?

We went for a property which was roughly £250,000.

-We budgeted for about 250, 255 for that.

-£255,000?

-Yes.

-And you bought somewhere for 10,500?

-Bought it for 10,500!

That's just brilliant!

Well, it's now three months later

and I've just about managed to compose myself.

And now we're back to see if they've managed to do a brilliant job here.

Their plan was to ditch the two-flat idea,

and make the property into a three-bedroom house in just eight weeks.

So what have we got here?

The lower ground floor was three dirty, empty rooms,

but now houses a bedroom, bathroom, and a kitchen.

With that relocated downstairs on the ground floor, there's a

huge open-plan living area with an additional small room at the back.

And on the top floor, which was going to be a self-contained flat,

are two more good-sized bedrooms and a family bathroom.

No more debris, dust or dirt,

which had certainly been a big problem outside, to be seen.

As you can see, we've put a decking area out the back

and formed a car port underneath.

I think we took away about 50 tons of earth, so it was major job.

And on the rear of the house,

we had to do a big retaining wall at the bottom.

I think it'll be really good for the summer, for barbecues,

and I think it will be a good selling point for the house.

So the outside mess is sorted and all decked-out now.

It's certainly a far cry from the property that was here

just 12 weeks ago.

And we're not the only ones who think so.

I came for the first time when you were here previously

and I came back Saturday for only the second time

and I was amazed to see the difference in the property.

I was expecting it to look different, obviously,

but I think Mark's done an excellent job.

I was genuinely surprised by the way that it looked.

Well, we're agreed then. It's looking impressive.

But was it possible to stick to their original £20,000 budget?

I think we've gone about £10,000 over-budget.

It was the rear of the garden.

The plumbing went over more than what we expected,

so we're up to about £30,000.

To sort out all those problems

and get it looking like this for £30,000 is pretty good going.

Especially as turning it from two flats into one house

required a substantial layout re-jig.

We decided to move the kitchen from upstairs down to this level,

because it gives better access to the decking and the balcony.

We thought it was just a better place, really. It was a bit of a dead area down here.

Really, the main reason was to make sure we have a spacious lounge upstairs.

It's turned out really well.

And with builder Mark taking charge of the project, it sounds like their

first joint venture into renovation has gone relatively smoothly.

I don't think we can call it working together. Mark's done all the work.

All I've done really is moan quite a lot

when he's rang up to tell me how much he's spending.

So that's really been my input.

But we both now realise how much is involved in a job in this area.

But also I think from the boys' point of view who have worked for Mark,

it's meant that they've all been working for three months in what is a very quiet time

in the building industry. So from that point of view, I think everybody's turned out happy.

-So everybody's happy.

-Happy enough to do another one together?

We've been looking for other properties, but nothing's come up

that we've thought we're in the market for.

But if this sells quickly, obviously we'll move on as quickly as we can.

They purchased this property for £10,500

and spent around £30,000 on the work.

That makes their total outlay £40,500.

We invited two local estate agents along to hear

what they make of the house now.

I am very impressed with the quality of the work

and the refurbishment that they have carried out.

I can't find any faults with it.

I think the additional downstairs bathroom,

possibly because there was nothing else they could do with that area,

has also added to the value of the property.

I think they've done a very good job on the refurbishments.

They've got nice-sized bedrooms, a good-sized kitchen and bathroom,

and you've got the additional shower room on the lower ground floor.

So their first impressions are favourable.

But how about those all-important numbers?

The boys are set on selling, but if they did let,

these estate agents suggest they could fall between £375

and £395 per calendar month, giving a yield of over 11 per cent.

That would be a fantastic return.

But with the focus purely on selling, what could they get for that?

This property, due to its location, I believe will only achieve in the region of £55,000.

If I was to sell this property, I would market it at £60,000.

I thought it would have been a little bit higher, to be honest.

I know it's not in the best location, but realistically

if you put this on the market for around £70,000, I think it would get 60, definitely.

-I think 55 is too low, personally.

-Yes, I think so.

I think 60 for a quick sale - I think that would be about right.

-I'd accept that.

-Yes, I would as well.

If they sold for £60,000 they'd make a pre-tax profit

of £19,500 between them.

We just bought this just for fun, almost.

It was an impulse buy, but it's worked out well really.

-Yes, definitely.

-If Mark's happy, I'm happy.

I didn't do too much, so if he's happy, so be it.

It's been a challenge, but it's all been good fun.

We hope you've enjoyed our insight into the world of auctions.

Make sure you join us next time for more Homes Under the Hammer.

-We'll see you then.

-Goodbye.

-Goodbye.

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