Episode 59 Homes Under the Hammer

Hello. Well, even when the property market is suffering hard times,

many of us are still hooked on buying it.

None more so than Martin and me.

Yeah, and we're especially fascinated by the auction rooms

where every year thousands of people buy their home under the hammer.

We are constantly amazed by the stories that come out of the auction rooms.

Some real-life dramas, some real-life successes.

Yes, so here are some real-life properties that have all been bought

and here are the tales they've come to tell.

'I'm in Lincolnshire where there's an old tradition

'that front doors are only used to bring in babies, a bride or a coffin.'

So I think we'll go in the back way.

'This terrace in Surrey has plenty of potential.'

And, of course, you've got something very nice to look out onto.

'You might even say it's coming up roses.

'From outside, this house in Wolverhampton looks in reasonable nick.

'But what's in store behind the front door?'

On the inside, look at all this space!

'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.'

-HAMMER BANGS

Lincolnshire is one of the most sparsely-populated counties in the country,

characterised by open countryside dotted with little villages.

Well, the lot that was up for auction gave somebody the chance to buy a little bit of the landscape.

# Among the fields of gold #

'Nestling between the fields is the rural hamlet of Kexby

'and the auction lot I'm here to see.'

So, what was on offer? Well, it's a detached former farmhouse

set in large grounds with outbuildings.

It had a guide price of 300,000 quid. Can't wait to see it.

Now, there is a tradition in Lincolnshire that front doors are only used for three things.

Bringing in a new baby, a bride or a coffin.

So I think we'll go in the back way.

'The front of the property exudes country charm

'and the back is no different.

'First impressions - fantastic!

'Let's take a look inside.'

So, what kind of condition are we going to find inside?

Well, I tell you what, if the kitchen's anything to go by, it's looking pretty good.

Lots of white goods still left here. Obviously, the units are quite old,

but perfectly serviceable, and it's a nice size space.

Lots of windows, lots of light.

So, setting a very, very good scene.

And it continues in here. Lovely kind of entrance area.

Sort of winding staircase up to the bedrooms.

Then down towards the unused front door.

Front sitting room on that side with a nice-looking log burner.

A good size space. And then another sitting room on this side.

Bay windows. And, in terms of a space, it's a good one.

Another open fire there. And then through to a little conservatory.

'So far, so good. I'm starting to be just a teeny bit smitten by this house.

'Let's continue our nosy around.'

So, upstairs, and you've got this funny little landing area here

with the bathroom on that side. Doesn't look to be too bad size or condition.

In fact, to be honest, the whole house, you could almost move into it as it is.

But up onto the main landing area.

Three bedrooms. Decent size one there. Then two big ones at the front of the property.

And then that, which is described as a study. It certainly isn't a forth bedroom.

What it is is potentially... an en suite in waiting.

# I am waiting

# I am waiting

# Oh, yeah, oh, yeah #

'I keep waiting for this property to disappoint my expectations somehow,

'and yet, it doesn't.

'The decoration may not be to everyone's taste,

'but that's a problem with an easy solution.

'Now, you may remember that I said the auction lot came with spacious grounds.

'Let's find out exactly how large by exploring this glorious garden.

# Such a pretty house

# In such a pretty garden

'Well, if I was only a tiny bit smitten previously,

'I'm full-blown in love with this auction lot now.

'There's also a delightful apple orchard and a whopping seven acres of land.

'And there's more. On top of all that, there are these extraordinary outbuildings.'

Now, what are your options? Well, you could just keep them like this and store things,

have an old car that you're restoring, whatever.

Or you could look at applying for planning permission to convert into, say, residential.

A granny annex or something like that.

Live/work space, that's really encouraged in rural communities. So lots of options.

Or a ruthless developer could just come in here and say,

"Knock it all down and build a house here."

Ooh. What's going to happen?

'As far as this rural idyll is concerned,

'I'm inclined to let my romantic heart overrule my developer's head.

'We invited a local estate agent to give us his opinion on this lot,

'which had a guide price of £300,000.'

To improve the house, I'd certainly look to extend.

It needs a bigger kitchen. It needs a glazed element,

probably a sun room on from the kitchen,

to look out across this fantastic land.

'Well, that would be wonderful, but would require a substantial budget.

'What about the barn and outbuildings?'

You could simply use them as stables.

You could use them as holiday lets. Obviously, you need consent for that.

You could use them as offices, and again, you'll need consent.

Or the obvious choice is to go for residential.

'How much does the estate agent believe this auction lot is worth in its current condition?'

I would've thought that the value as it stands is just over £300,000.

But if you actually improved what's there now

and just did a decorative refurbishment,

well, you'd be getting on for £400,000.

However, if you extended it,

added one or two bedrooms

and a bigger kitchen and get more light into the place,

I think you're looking at an entirely different set of values.

You could be £500,000 to £600,000.

So there's real value to be added, as well.

'Wow. Those are some impressive figures.

'Rental-wise, the estate agent believes the house

'could be let for as much as £1,200 per calendar month once renovated.'

Well, who wouldn't completely fall in love with this place?

The house is charming, you've got loads of land

and a garden that you could just lose yourself in.

Will it end up being somebody's rural retreat

or will a developer see the potential of the outbuildings?

Let's go to the auction and find out who bought it.

Who'll start me at 280 for the property and let's move on?

280 I start. At 280.

282. 285.

288. At 288.

290. 292.

295. This is real, real value for money here.

At £295,000.

If you are here to buy this property, I suggest you make your move

because otherwise I shall sell it.

At 295. 298.

It's against you, sir. Lady's bid at the back of the room at £298,000.

Once.

£298,000 twice.

Third and last time of asking. I cannot help but linger.

All done at £298,000?

HAMMER BANGS

'Well, "wow" is exactly what I was thinking.

'The successful bid of £298,000, two grand under the guide price,

'came from Julie who'd brought family member Richard along

'to her first ever auction for moral support.

'Julie's an auxiliary teacher and her husband Neil's a mechanical engineer.

'It seems that we were all bowled over by this property.'

Neil, Julie, lovely to meet you both.

Congratulations. What a gorgeous place!

-Thank you. We like it, yeah.

-No kidding.

Tell me why, if it's not obvious, why you wanted to buy it.

We decided... I came home from work and he said, "We're on the move"

so I said, "What we going to move to?" and he said, "I fancy keeping some sheep."

I said, "Well, I'm having some pigs, then." As we looked around,

he said, "I'd like an orchard, I want a stable door, I fancy some ponds."

I said, "I fancy a wood."

-And this place just ticked, ticked, ticked all the way along.

-We searched the internet for months.

And this place was on the internet.

So it was ideally what we'd been looking for.

-So this is a place for you to live in, is it?

-Yes.

-Yeah.

-Wow.

-We didn't think we'd get a chance, but we did, didn't we?

-Mm.

-Why didn't you think you'd get a chance?

-Well, it went to auction

-and there was that figure there...

-We were umming and ahhing whether we could afford it.

We thought it was just going to go out of our reach,

but the gods were smiling on us or whatever that day and I was lucky. We were lucky.

# Oh, lucky me

# Hey, lucky you

'And I for one couldn't be happier for them.

'They have the home of their dreams.

'The couple have a budget of around £15,000 to carry out the renovation.'

So tell me what your plans for it are.

I've got a lot of work to do on the external walls, cos it's a Victorian house, there's no cavity.

So I've got to insulate all the external walls

and generally tidy everything up and make it habitable.

I'm not sure what we're going to do with the windows yet

because the glass is the very original glass

which is paper-thin

-and we don't like the idea of freezing cold... You don't like it, do you?

-No.

-THEY LAUGH

-And the kitchen?

Well, it's not displeasing at the minute.

-No! It's fine!

-It's quite pleasant, so...

-I think that'll stay for a bit until we get everything else sorted.

-And see what we want to do with that.

Go through a room at a time and redecorate and whatever needs doing.

-Who's going to do the work?

-I'm afraid it's going to be me.

And is the idea to stay where you are until the work is done

-or to move in?

-Move in.

-We shall be moving in and doing a room at a time.

-How quickly will you move in?

-Probably this weekend.

-This weekend?

-Maybe, yeah. THEY LAUGH

-Right!

-She's very keen.

-No kidding!

# Ooh, waiting for the weekend

# Ooh, waiting for the weekend to come

'The couple currently live in rented accommodation

'and are funding the purchase and renovation of this place

'from the sale of their old home.

'They plan to settle into their new rural retreat

'before making any major decorating decisions.

'But Julie in particular is looking forward to getting her hands dirty in the garden

'and starting a country kitchen vegetable patch.'

How are you going to manage the grounds? Because they're great

but seven-odd acres, that comes with a certain amount of...

What's the word? ..work.

-Yeah.

-Hard work.

-Yeah, hard work.

We're very fortunate. Neil does shift work, so he's four on, four off.

-So the four off...

-I'll be working here.

-SHE LAUGHS

What about the outbuildings? Cos you've got I don't know how many.

-Numerous.

-We want to actually put them back into action.

Some of the tiles have come off, there's no felt underneath the tiles, so I want to redo the roofs

and get them back into action. We might keep pigs in some of them cos there's pigsties.

-Well, I'm delighted for you both. Congratulations.

-Thank you very much.

-And good luck.

-Can't wait to see how you get on.

-Thank you.

-Thank you.

Well, how fantastic that Neil and Julie have found this place.

It's almost like it's meant to be.

I hope it turns out to be the rural idyll they're hoping for.

But there's a lot of work to do and they'll be living in it while they do it,

and at the same time, trying to maintain those seven-odd acres.

Lots of work. I think they'll love it.

You can find out how they get on later in the show.

I've travelled to a place called Mitcham today.

Now, it's officially located in Surrey,

although it's right on the outskirts of the capital.

Streatham in Southwest London is its next-door neighbour.

Now, buyers and renters are just drawn to this area

because it's a lot more affordable than neighbouring Streatham,

where an average terraced house could easily cost in excess of £350,000.

Here in Mitcham, well, you can pick up a similar property

for under 250 grand. Now, that's more like it!

# I like it, I like it

'And with two mainline train stations to choose from,

'it's easy to get to and from Mitcham.

'The pedestrianised shopping centre is great.

'It's had a makeover recently, as the local council are keen to encourage business into this area.

'In pride of place is the Victoria clock.

'It was erected for Queen Victoria's Golden Jubilee in 1887

'and now I've got a royal engagement with a property nearby.'

The house I'm here to see looks out onto this lovely little green,

so it's off to a great start straight away.

And it feels like a family-friendly spot and I like this area.

This is the house. It's a mid-terrace property.

It's got three bedrooms. And the guide price - £170,000.

Now, that seems rosy.

# I never promised you a rose garden

# Along with the sunshine...

Well, you could be here all year scraping this wallpaper off.

But it's got to be done. It will make a world of difference.

Pull up this old mustard carpet and a modern house emerges.

Now, we've got a good, solid sitting room through there.

And at the back of the property, a kitchen with enough space to create a really lovely, contemporary feel.

I would knock through this here, I think, into this dining area.

Now, this is an ideal space for that family table.

And, of course, you've got something very nice to look out onto.

'Yep, there are even more lovely roses out the back. But more of that later.

'I've got the rest of the house to explore first.'

Upstairs has this lovely open landing space with three bedrooms leading off.

But the big property-developing question is, to go up or not to go up?

Now, I'm usually keen to increase square-footage,

but converting that loft to create an extra bedroom

will cost between 20 and 30 grand.

Now, will you make that money back?

Hm, you'll probably only increase the value by the same amount

and it's not worth doing all that work

unless, of course, you want to make this your home.

'It's good to have the option to convert the attic

'if a large family did move in and needed that extra space,

'but only if they weren't too worried about that ceiling price, of course.

'Luckily, they wouldn't need to worry about space in the garden, though.'

This garden seals the deal for me.

It needs to be tamed, but it's well stocked with these beautiful, pretty roses.

And I think it would suit a family, as there's plenty of space for slides, swings and trampolines

to keep the kids entertained.

'I think a three-bedroom property so close to London is a bargain at £170,000.

'Let's find out what a local property expert reckons.'

My first impressions are that this is a very spacious house

in a good location, overlooking a green.

Yeah, a good size garden, as well.

A good quality refurbishment will really help this property.

'And with the renovation work done, how much does he think that would add to that £170,000 guide price?'

This house, safely we can say it would probably reach £250,000 all day long.

You could perhaps try a little bit more.

'He also estimates it would let for £1,400 per calendar month,

'which would be a great return if the buyer picked this up anywhere near that guide price of £170,000.'

This one could be a great little earner,

but I think whoever takes this on needs to keep the refurbishment simple.

Do that and you can't go far wrong.

So who wanted this? Let's find out.

Let's move on to lot 11, a mid-terraced house.

Three beds. Is that 160 somewhere?

160. 161 anywhere?

161 162.

163. 164. 165.

166. 167. 168.

169. 170.

'Well, bidding was fast and furious.

'This really was a hot property.

'Let's rejoin that auction action.'

191.

191, a new spot. 192. 193.

193. 194.

Yeah? 195. Well done. 195.

Well? 196?

Yeah? 197?

OK, well done. 196 with you, sir.

197? If not, 196, first time.

Second time. Third and last time, if you're all done.

-HAMMER BANGS

-Sold, 196.

'And beating off all competition

'with that final bid of £196,000 was Kesh.

'He's been a manager for a property company for around six years.

'This house is his second purchase for his own private portfolio.

'I met him back there to find out more.'

Kesh, congratulations. Lovely to meet you.

So how desperately did you want this house?

Well, I'd done the research. I'm a local boy.

I've been there over 20 years, in the area. My parents live down the road.

And the station's convenient, the transport links are good and I know what the ceiling prices are.

I know a lot of the agents in the area, so I'd done my research thoroughly.

-Yeah.

-We've done another property just down the road from here

which has completed. The renovations are all finished now.

So we knew what kind of budgets were going to be in place,

I know where to source all the materials. I've done the research on that side, as well.

-So very thorough.

-Yeah.

-And being a born and bred Mitcham boy, do you think that stood you in good stead?

It has done, because that's a starting point for me, on my own patch.

'Kesh has just recently branched out on his own as a property developer,

'so it's not only his local knowledge that'll be useful,

'it's all the experience from his last full-time job.'

So do you think by doing this, Kesh, this allows you to have more of a quality life?

Yeah, definitely. Because I'm in control of my own working hours, as well.

And are you making money from property developing? Are you climbing up the ladder?

Until we sell that first one, I can't really answer that question.

But hopefully, we are on the right game now.

'There's a confidence about Kesh that's hard to ignore.

'He knows the market and the area inside out.

'So I'll be fascinated to learn what his expertise will bring to the renovation of this property.'

Well, this kitchen area downstairs, I think we need to take that wall out,

because we've done that in the previous house

and it's made a major difference.

It's all going to be reskimmed, new lighting, new sockets, total rewire.

The major works upstairs will be putting the bathroom into one.

-What is your budget for the work?

-Well, we're looking at between £30,000 and £35,000.

-Hopefully we don't get nowhere near it.

-So how long do you think the work is going to take you?

Worst-case scenario, I think we're looking at about eight weeks.

-Eight weeks? So you're going to go for it.

-Yep.

-As soon as we're out, you're going to start work.

-It's on the market at the moment,

because we think we may be able to get a buyer that might buy it instantly.

So you've bought the property, and like this, you've put in on the open market.

So if you did get a bid, how much would you sell this for untouched?

-I don't know, about 235, 230.

-That is a nice little profit for a day's work.

-Yep.

-Kesh, lovely to meet you. I can't wait to find out what you actually do

-and if you get that cheeky little buyer before you have to do any work. Well done.

-Thank you.

Will Kesh renovate this place from top to bottom

and push this over the stamp-duty threshold barrier?

Or will he leave it untouched and sell it straight on without any problems?

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

'Coming up, first the bad news.

'This terrace in Wolverhampton has no central heating, but...'

Good, good news. A big old kitchen. Look at this!

'We return to Surrey on a lovely sunny day

'to get the verdict on Kesh's renovation.'

It's looking very good. The sun's shining, the property's shining, too.

'But first, in Lincolnshire, are Neil and Julie happy in their new home?'

-It was just a dream come true in a way.

-Mm.

-Wasn't it?

-Yes.

'Let's return to Lincolnshire and this simply sumptuous rural retreat.

'Not only was there this fantastic farmhouse,

'but also a glorious garden.

'Also, there was an apple orchard. Isn't it wonderful?

'And there was more. A lot more.

'Seven acres of land.

'And a couple of outbuildings ripe for developing.

'Enticed to the auction to bid on this lot was Julie.

'She and her husband Neil were as hooked as I was by this property's obvious attractions.'

-So this is a place for you to live in, is it?

-Yes.

-Yeah.

-Wow.

-We didn't think we'd get a chance, but we did, didn't we?

-Mm.

-Why didn't you think you'd get a chance?

-We were umming and ahhing whether we could afford it.

We thought it was just going to go out of our reach,

but the gods were smiling on us or whatever that day

and I was lucky. We were lucky.

'Neil and Julie paid £298,000 for the property

'and plan to move in straight away and begin the renovations.

'Neil was going to bear the burden of the majority of the work.

'So has he managed to make this house into their new home?

'Just over one year later, we're back.'

# On my own

# This is where I build my home

# This will always be my home

'Neil and Julie have filled this farmhouse with little touches of decoration

'that reflect their personalities and have turned the house into their home.

'From the moment they laid their eyes on this property,

'it was love at first sight.

'So they must have been overjoyed to move in.'

When we got here, we just fell in love with it and didn't want to leave.

-So it's nice!

-It was just so beautiful when we moved in,

it was a nice, sunny day and everything

-and it was just a dream come true in a way.

-Mm.

-Yeah. Wasn't it?

-Yes.

'The couple did the renovation while also living in their new home.

'First job was replacing all the single-glazed windows

'with sash-style double-glazing.

'Very appropriate for this property.

'Then Neil began insulating the exterior walls.'

In this room, we've actually had to insulate the outside walls.

And you can see the depth of the insulation.

We had to baton the wall out, put the insulation between the batons,

plasterboard the wall and then skim it all and decorate it,

which is quite a big job.

'On the landing is the bathroom, which remains the same.

'But upstairs in the three bedrooms,

'Neil and Julie have continued to make this home their own.

'The bedrooms are now clean and fresh and a blank canvas for Julie to decide how to decorate them.

'I'm glad to see they've kept the fireplaces

'which add to the charm of this property.

'As Neil's a mechanical engineer and Julie an auxiliary teacher,

'the couple are fitting the renovation work around their full-time jobs.

-'How are they getting on with that?'

-Tiring, I'm afraid.

We've enjoyed it, which is the main thing. I think if we didn't enjoy it, it would've been very boring

and tiring, but we've enjoyed it very much.

-We tend to work as a team, really.

-Yeah.

-So...

-My super-labourer.

-THEY LAUGH

'And as for the glorious garden,

'well, it's still glorious.

'The couple would've liked to start a vegetable garden, but have been unable due to the weather

'and because their attention has been focused indoors.'

It's been nice to actually get out of the house and into the garden.

I tend to go down every day to the pond, feed the fish

and stand there for five or ten minutes watching them

and then come back up. It's my relaxation period.

'As for the outbuildings, they remain relatively untouched.

'But Neil removed and stored the slate tiles as they were in danger of falling off.

'So, what are the couple's plans for the barns?'

Just to restore them, really. Cos they're old stable buildings,

it'd be nice to keep them back as they originally are.

It's nice to look at them and say, "How did they make that?" and "How did they do this?"

'This is an ongoing project

'and so far Neil and Julie estimate they've spent around £15,000 on the renovation.

'If you add that to their purchase price of £298,000,

'plus stamp duty of just under £9,000,

'that gives them a total outlay so far of around £322,000.

'So, has all the hard work been worthwhile

'and are they happy in their new home?'

-I've enjoyed every bit of it.

-I've enjoyed the project,

but I think after a while, you just long for something really clean

where you're not having to feel dusty all the time and just to have some of your things out

and out of boxes for once, which would be nice.

'We invited two local property experts

'to give us their opinion on Neil and Julie's new home.'

The property's a very nice property, very unique property.

They've obviously gone through a scheme of modernisation

since we last saw the property

and they are about 50 percent through that at the moment.

And it's looking in good order.

Great efforts have been made to refurbish this home.

Continued development would be advisable

to really complement and retain the original character and features.

'Bearing in mind the couple's total spend so far of £322,000,

'how much do the experts believe this property and the seven acres of land it sits upon is now worth?'

The property, in its current state, is in the region of £360,000 to £370,000.

I think this could be pushed up to the £400,000 mark once complete.

In my opinion, in current condition, the property could achieve somewhere in the region of £350,000.

'Well, those valuations could earn the couple a gross profit of between £28,000 and £48,000.

'But the experts also believe that if Neil and Julie

'were to develop the barn into a residential property, it could sell for as much as 250 grand.

'So there is money to be made here.

'Neil and Julie have made, as they said, their dream come true with their new home.

'So, has living through the dirt and grime of the renovation all been worthwhile?'

I think so. At the end, yes.

It was a bit a trauma during the process of the alterations,

but once they're now there, it's worth its weight in gold, I think, now.

# Among the fields of gold

Going to the auction was a good experience, thoroughly enjoyed it.

If you've got a dream, go for it.

Wolverhampton is a metropolitan borough in the West Midlands

and it was granted city status in 2000

as part of the millennium celebrations.

It's also home to lots of affordable property.

The average price of a terraced house in this part of the UK

is just over £100,000.

'Here in this Wolverhampton suburb, you really get a lot of property for not a lot of money.

'The house I'm here to see is a three-bedroom mid-terrace

'with a guide price of between £45,000 and £49,000.

'Now, both Martin and I are always banging on about it,

'but it does always pay to do your research.

'And, as with the rest of the country,

'I've discovered that sales around here are weak.

'There is, however, a very strong rental market,

'so that's ideal if you're looking for a long-term investment.

'From the outside, I can see the windows are double-glazed.

'Overall, it's not in too bad nick. But what's in store behind the front door?'

And on the inside... Wow! Look at all this space!

Look at the area you've got! Fantastic!

This is a great family room.

And good, good news. A big old kitchen. Look at this!

I mean, this is great for a family.

You could easily have a dining area down there.

Obviously, you'd need to think about installing something a lot more attractive,

but I really like it, and there's a fair size garden out there, too.

'Right now, it's overgrown and under-loved.

'But even if you're not green-fingered, get stuck in outside

'and at least make sure the lawn is well maintained.

'Wooden fencing should be in good order, weather-treated with varnish and stained to make it shine.

'Always worth thinking of your garden as another room in the house

'when it comes to selling.

'Let's take a little look upstairs.

'A big bonus is the bathroom suite,

'which is in good condition and salvageable,

'which could help keep costs down.

'There are three bedrooms, one single and two good-size doubles.

'Cosmetically, they require updating with particular attention paid to the quality of the finish.

'But my big worry is the storage heaters.

'Installing a gas central-heating system is a must, I think,

'but requires certified professionals to carry it out.

'With the potential profit margin tight on this terrace,

'whoever bought this property will need to keep a close eye on their budget.

'We invited a local estate agent to cast his expert eye

'over this auction lot, which had a guide price of £45,000 to £49,000.'

It's not a bad little house.

It would benefit greatly from central heating

and probably a new kitchen.

That's really about the only works that I would say is necessary, apart from decoration.

'Would the estate agent recommend selling or renting it out?'

The rental market is quite strong currently,

erm, due to the difficulty of obtaining mortgages.

People still want homes to live in

but can't afford big deposits,

so renting is the next option.

'So how much could this place achieve if let out?'

If it's done up to a reasonable standard,

I would imagine that the rental income on a property like this

would be between £495 and £525 per calendar month.

'What about the sale value?'

If the property's done up to a reasonable standard,

then I think the new owner is likely to achieve

a figure in the region of £75,000 to £80,000.

And so the advice for someone taking this on, renovate it and rent it out.

The rental market is buoyant but the sales market isn't as strong.

I know what I'd be doing. Let's see who fancied this nice little earner when it went under the hammer.

Ought to be 50 to start. 50,000 to start.

40,000 then to get off. Who's going to jump in at 40?

Sir, 40,000. Do I hear 45 anywhere?

At 40. 45, I do. 45.

At £45,000 on my right.

At 45,000 for the first time. Are you all done?

I'll take 2. 47, sir? OK, 47.

Do the same again, sir, 49 if you wish.

At 47, he's in the middle. You're out on the right, sir, at 47.

49, sir? I'll take your two. 49. 51, sir?

50, then? Thank you, sir. 50. 51?

51, sir? Are you sure? You've only had one bid, sir. It's not very good.

Once you start, you shouldn't stop.

Are you absolutely positive?

In that case, 50,000, he's standing at the back.

It's being sold, make no mistake. So everybody seated is out.

Fresh bidder, 51. 52, sir?

52 at the back, sir? 51 is seated.

Fresh bidder knocks you all out. At £51,000 for the first time.

It is being sold, make no mistake. You're in, sir, at 51.

At £51,000 for the second time.

Are you coming back in? Anywhere on the right or at the back, sir?

At £51,000. Being sold, make no mistake.

Are you all done for the third and very last time?

-You're out on the right. It's your bid, sir.

-HAMMER BANGS

'The hammer fell on a bid of £51,000 from James.

'This is his first ever auction purchase,

'and with his first and only ever bid, he bought a house! Brilliant!'

# For I've got beginner's luck

# The first time that I'm in love

# I'm in love with you

'James financed the purchase of this property with money of his own

'and his partner, along with members of his family.

'He currently works as a supply teacher in business and IT studies,

'but he used to work as an estate agent

'so perhaps he has the ideal combination of skills

'to make the move into property developing.

'Let's meet him.'

James, congratulations. Lovely to meet you. So you made one bid and the property was yours.

-That's correct, yes.

-How much research did you do into buying this?

Er, we went to see a number of properties,

er, went to five originally,

whittled it down to three, went to see the other three a second time,

then at the last moment, the property which we were going to go for,

we found there was a mine shaft underneath the living room floor.

-So that was...

-Really?

-So this was the backup,

and, yeah, we managed to get it in the end.

So you've taken this seriously, haven't you? Lots of research, lots of properties, lots of plans.

Yes, yeah. Well, I spent seven years in estate agency,

so I know a little bit about researching properties and prices

-and what to look for, tell-tale signs.

-So tell me your background?

Er, well not an estate agent anymore. I'm currently doing supply teaching,

-I'm a qualified business and IT teacher.

-Yeah.

At the moment, there aren't any jobs that are within the area, that I'm looking for,

so myself and my partner have a little bit of money

which we put into getting this property

and... branching out into a different way.

'James planned to purchase with the help of a mortgage,

'but almost disastrously, it was withdrawn.

'Mortgage companies can refuse to lend on a property

'if a vendor has owned it for less than six months, as was the case here.

'This was introduced to stop speculators flipping properties at inflated prices.

'So James was caught out by not reading the small print.

'Fortunately, members of his family stepped in to cover the shortfall.

'But this does mean that he needs to sell in order to repay the loans.'

What's worrying you most about having bought this at auction?

Erm... That we're able to sell the property, I think. I think that's the key.

I think the key is making sure that we can get some sort of a mark up on what we've originally sold.

The rental side at this stage is not an option.

My only worry would be the market at the moment is very wobbly

-in terms of people getting finance, getting mortgages.

-Yeah.

Is it going to be a first-time buyer looking for something like this?

I'm hoping with the quality of finish that we can get on the property

and the fact that we're not going to over-inflate the value of the property,

that we ideally would get somebody like a first-time buyer

who'd come in and take it straight away.

So what can you do to get that,

to really make the person who buys this want it

and make this the best house out of all the others that are on the market?

I think it's the fine touches that you do around the property.

It's the edgings around kitchen seals,

it's, erm, plastering corners,

it's looking at how, when tiles are put on, that they're level,

and all the grouting is done correctly, that all the fine points are done,

because whenever I've looked at properties previously,

it's those little bits that make the difference, the finishing touches.

-So good quality craftsmanship...

-I'm hoping so.

-..coming your way.

-Watch this space.

-Yeah!

'The wow factor he desires usually requires splashing the cash.

'But with the potential profit margins here already tight,

'how's he going to achieve this?'

So what sort of budget have you got in mind for this house?

At the moment, having another look around,

we're probably going to be looking at somewhere between £5,000 and £7,000.

-That's a fairly low budget. Are you going to be doing quite a lot of the work yourself?

-I am. Yes.

I've worked on a number of other properties previously,

my father also has a number of properties,

so I've worked, done piecemeal stuff for him, I've worked on my own properties.

The idea is that I'll do most of the plastering,

put the kitchen in, the bathroom I shall do myself.

-What's your timeframe?

-Six to eight weeks.

Now, again, six to eight weeks, quite a small budget,

do you think you'll be able to get it done in that time?

-Yeah, I think so. I do.

-James, it's been lovely meeting you.

-Good luck with this.

-Thank you.

And I hope you do get the sale that you guys need.

-Congratulations.

-Cheers. Thank you.

It just goes to show that with all James's knowledge and research,

you can still get your fingers burned.

You literally cannot afford to leave any stone unturned.

Luckily for James, he managed to get the cash together to buy this.

The question is now, will he secure a buyer or will he be forced to rent this?

You can find out later on in the show.

Well, time and tide wait for no-one.

And in the property world, time usually means money.

So let's go back and see if that time and money has been well spent.

'Now back to Mitcham in Surrey to catch up with Kesh.

'He's a property developer who picked up this three-bedroom terraced house for £196,000.'

So how desperately did you want this house?

Well, I'd done the research, I'm a local boy.

Been here over 20 years in the area, my parents live down the road.

The transport links are good. And I know what the ceiling prices are.

I know a lot of the agents in the area, so I've done my research thoroughly.

'Kesh had budgeted up to £35,000

'and had an eight-week schedule to transform this property.

'But he's beaten his own target. So we're back only seven weeks later.

'Has Kesh taken this tired and tatty place

'and given it a modern, sleek and stylish makeover?

'Let's find out.'

# Make me over, make me over, make me over, make me over, make me over

# Totally make me over again

# Make me over

# Make me over

-# I want to be made over

-# I want to be made over

# So make me over, ah-ah

-# Make me over

-# Make me over, yeah

# I want to be made over, so make me over

# Break it down

'As you can see, every room in the house

'has been stripped, skimmed, redecorated and modernised.

'The biggest change is downstairs in the kitchen,

'where Kesh has knocked down the wall and opened it up

'into this great, new, open-plan kitchen-dining area.'

By removing the wall downstairs, I think it's made it feel a lot more spacious.

The kitchen and dining area interact a lot better.

In general, the space, it makes it feel a lot bigger than it actually was,

with the wall being there, which was a non-supporting wall.

It had no bearing on it so it was a simple enough process to remove.

And we were already re-rendering and rewiring,

so it was a simple enough job to do.

'When it came to fixtures and fittings,

'Kesh didn't skimp on expense.'

It's better in the sense of the quality.

We've gone with the minor details like slow closes, nice gloss finish, as opposed to a matt finish.

The gloss finish really gives it the class, as well.

'The other major change has been upstairs in the bathroom.

'Kesh removed the old boiler and put in a modern shower unit.

'He replaced the rest of the bathroom suite too, of course,

'to bring it bang up to date.'

# This is the modern way

# Faking it every day

# This is the modern way

Having a shower and a bath, which is a major must these days,

because, you know, for the general commuter these days

they just want to get into a shower and rush out of the door.

Whereas maybe on the weekends, you want to have a soak.

So in this place, once again, we've had both,

so it doesn't take anyone out of the picture when they're looking for a property.

'Kesh got a team of builders in to do all the work and they've done a fantastic job.

'They've even completed the renovation ahead of the original eight-week target.'

I think we've taken around six and a half weeks from start to finish to complete the job.

'Well within his timescale,then.

'But what about his £35,000 budget?

'The spec on this property is pretty high,

'so what did he spend here?'

I think we will be coming in at around the £32,000 mark,

including closing costs of solicitors and agent fees.

So we should have a good exit and save a few thousand pounds, as well, in the process.

'You really can't ask for more than that.

'Under budget and ahead of schedule? Ooh!

'So it looks like Kesh's meticulous research has paid off

'when it comes to builders and materials.

'The result is certainly impressive.

'But will his high standards mean a high return?

'Bear in mind, any valuation over £250,000

'takes him above the three percent stamp-duty threshold, which may deter buyers.

'We asked two local property experts for their thoughts.'

My first impression on entering the property

is that, yes, they've done very good work in the property,

the finishing is very good, they've used every available space,

they've used quality material. It's a job properly done.

An excellent transformation.

The property has been completely refurbished.

Nice and neutral in white throughout.

Erm, you know, it's looking very good.

The sun is shining, the property is shining, too.

It's got a lovely family bathroom, which is situated upstairs.

The kitchen has been knocked into a massive room,

which is good for a big-sized family.

'So the experts are impressed with the stylish new look.

'Kesh purchased the property for £196,000

'and spent 32 grand on the renovation,

'making his total investment here £228,000.

'He's already put the house up for sale and had viewings.

'So let's find out how much the estate agents believe it's worth,

'and if that matches Kesh's sale price.'

If the property is put on the market for sale, we'd be looking to achieve between £268,000 and £273,000.

We would expect the property to achieve £250,000 and above.

Because in certain circumstances, people are paying above stamp duty.

So we'd market the property around £280,000, £285,000

and then be flexible on the offers one takes.

'Those valuations, if achieved, would give Kesh a gross profit

'of between £40,000 and £57,000.

'But he's actually marketing the property at 284 grand.'

I think that seems like a very big margin, but we've done our research

and we've seen properties in that region

that have sold yards away for around the 275 mark,

so I think we're priced well, because they required work.

This one is ready for a family to move into and get going. There's nothing to do.

'It sounds like Kesh is content to stick to his original selling price.

'And if he does sell for that,

'he'll have certainly made a great little profit here.

'So is he happy to have branched out on his own as a developer,

'after years of working for someone else?'

I enjoy it fully, working with people and seeing the end goal,

and that's what keeps me going.

'Let's make our way back to this three-bedroom mid-terrace in Wolverhampton

'that had a guide price of between £45,000 and £49,000.

'It was bought by supply teacher James

'with his first and only ever bid at auction for 51 grand.

'The profit margins on this development would be tight.

'The local rental market is buoyant, but James has to sell the house on

in order to repay his family, who've invested in this project.

'So how would James ensure the property was snapped up

'when it was put up for sale?'

So what can you do to make this the best house out of all the others that are on the market?

I think it's the fine touches you do around the property,

because whenever I've looked at properties, it's the finishing touches that make the difference.

-So good quality craftsmanship.

-I'm hoping so.

'The pressure was on as James would be doing most of the work by himself.

'So I'm expecting those finishing touches to be fantastic.

'He'd given himself a maximum of eight weeks

'to have the renovation complete.

'Just over four months later, we're back.'

# You say if you try to put the finishing touches on me

'The finishing touches will have to wait,

'but the finish line is fast approaching.

'I can see James has made great progress.

'But maybe just a smidgen slower than he'd hoped.

'Was his eight-week target a misjudgement?'

That's really just a case of first-time blues.

Clearly doing it by myself, that was not going to happen.

In the last few days we've done 12-hour days.

When we first started it was four, five, six hours a day.

So it's a very steep learning curve.

'I can tell the kitchen will look fantastic when it's complete.

'And James had done a great job of fitting it all by himself.

'And upstairs in the bathroom, James has chosen a cool and contemporary look.

'An attractive kitchen and stylish bathroom are real selling points.

'But I do hope James is keeping an eye on costs.'

Ultimately we've got to drive a balance between

looking good but also being cost effective, as well.

I've got a good friend who has done a number of properties like this.

And his utmost, or his key bit of information or advice was

don't get too personal.

And I found myself several times thinking, "I'd just like to do that,"

but then every time you think about that,

it's eating into margins.

'In order to maintain a healthy profit margin,

'James has put his own renovation skills to good use,

'including plastering all the walls and ceilings in the bedrooms.

'But he was able to call in the services of two little helpers,

'his sons Dominic and William, while they were on school holidays.'

# He's a chip off the old block

At times it's been great fun. They've been learning how to paint properly,

they've learnt how to do dry-wall skimming.

They've also frustrated me

and they've been, "Dad, can we have this? Dad, can we do this?"

And I'm sort of stuck up a ladder plastering a ceiling or something like that.

So it's been good fun. It's also been hard work.

'What has William enjoyed the most about helping his dad?'

I like the painting because...

..because it makes the house look nice.

'And big brother Dominic?'

I really like the stripping because when you get a big bit

and it's all watery, you get to peel it off.

'Ooh, yeah! Let's hope the extra pocket money the kids are earning

'hasn't caused James to exceed his budget of between £5,000 and £7,000.'

Budget-wise, we're currently looking at about

just over seven and a half, about £7,600 at the moment.

'Adding that spend of around £7,500 to the purchase price of 51 grand

'gives James a total investment of around £58,500.

'We invited two local estate agents

to give us their opinion on James's,

'and of course, Dominic and William's handiwork.'

Since I last came, he's started to do the refurbishments quite well.

They're not finished, as you can see at the moment,

but what he's done so far is quite good.

The owner has done it to quite a high standard so far,

nice neutral colours throughout, neutral carpets,

and a nice white suite upstairs.

So it is coming along. It looks quite nice at the moment.

'The estate agents believe the local rental market is stronger than the sales market.

'So let's find out how much they believe this property could be let for.'

Once the property has been refurbished and completed,

the local rental market would probably be

somewhere between £400 and £450 per calendar month.

If the owner finishes the property to the same standard he's doing now,

I'd look to achieve between £475 per calendar month

to £495 per calendar month.

'Those figures would give James a rental yield

'of between eight and ten and a half percent. Not too bad at all.

'But he has to sell the property to pay back his investors,

'and, of course, release the equity for his next project.'

I think we have too much money tied up in the property, to be honest.

The rental is not an option at this stage.

'How much do the estate agents believe this place could sell for,

'bearing in mind James's total investment so far

'of around £58,500?'

Once the property has been fully renovated,

I would expect to achieve a figure somewhere between £70,000 and £75,000.

Once the property is finished, I would be looking to market this

at between £75,000 to £80,000.

'If achieved, those valuations would give James a pre-tax profit

'of between £12,000 and £22,000, minus the usual selling expenses.

'But he's done his research and believes he can get a little more.'

I know that a three-bed semi just round the corner on the same estate

recently sold for 95 and needed some work doing to it.

I also know that another terraced property

has recently sold for 85 in the area, as well.

So I think for something like this, that's fully done up...

Who knows, maybe I'm wrong.

'So has James enjoyed his first attempt at property developing?'

Yeah. I think I've learnt a little bit more about what hours to work,

how to not be too personal,

but absolutely, yes. Thoroughly enjoyed it.

Martin and I hope you've enjoyed watching today's property portfolio.

Yes, and join us next time for more brave buyers

-on Homes Under The Hammer.

-Goodbye.

-Goodbye.

Subtitles by Red Bee Media Ltd

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