Episode 6 Homes Under the Hammer

Despite the credit crunch people want to grab some property action.

And if you want to take the plunge,

auctions are a great place to start.

Yes, it's fast, it's frantic,

but it can be great fun buying your home under the hammer.

Some properties are very popular at auction, others go unsold.

So the auction room can be a difficult place to conquer.

Let's take a look at the lots that won

the hearts of our buyers on today's programme.

In Cornwall I find a property

where it's difficult to hide things behind closed doors.

What do you suppose that's all about?

This terraced house in Kent could well be a difficult proposition.

And you are still only left with just a two-bedroom house.

In County Durham, I take a look at this ex-holiday home

in search of a diamond in the coal dust.

That's got to be worth a look.

All these properties are being sold at auction.

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

when they went under the hammer.

Well done, good bid.

Well, this glorious spot is Mousehole in Cornwall.

A former fishing port, it's now more a popular tourist destination.

And you can see why!

It's also a sought-after place for people owning holiday lets

and second homes.

In fact, over half the houses in Mousehole are used in that way.

Well, just a mile from Mousehole

and two miles from Penzance is the village of Paul.

It's unclear who or what the village was named after,

but who cares anyway.

The property I'm here to see sounds very interesting,

had a guide price of 150,000 quid.

Let's take a look.

# Back to front Front to back

# Will you come backwards with me?

# Backwards with me? #

Well, it's an interesting set-up.

There are rows of cottages and some of their front doors

are on this side but the front door I want is on the other side.

So does that make this the front or the back garden?

So what's on offer?

Oh, wow!

Well, you hope you might find something like that

when you come into a property like this, but THAT is extraordinary!

What an amazing inglenook fireplace

and just that single piece of granite on the top there -

really want to make a feature of that, obviously.

But here's a feature that isn't quite so appealing.

What do you suppose that's all about?!

Don't worry,

I don't think that's going to be too much of an issue to take that out.

Basically, you've got your front living room here

with that amazing fireplace, then through to

what was I imagine the kitchen at one point,

though it's lacking in units.

There is this sink unit but that's it, basically,

apart from that.

Not a bad space though and the nice thing is, straight away,

not a head height problem, cos often with cottages like this

you might find it's a little bit cramped but the fact that

you've got lots of windows, not too low a ceiling

and that amazing fireplace - I'm already liking it.

# I like it

# I like it!

# I like it... #

Well, that was until I saw the bathroom.

It's downstairs which is never ideal and is also on the tight side

with that wooden cladding making it feel even smaller.

So, what's in store as I venture upstairs?

Upstairs a bit of a surprise!

This cottage is turning out to be quite unusual

cos you're expecting small, cramped rooms.

That bedroom certainly is, that bedroom - not so bad.

But wait until you see the master.

It really is quite spectacular!

Look at this!

This is the top end of that inglenook fireplace,

but what a feature.

And all this stonework that's been revealed.

I wonder if you can even take off the ceiling

to make that completely vaulted.

What a fantastic room.

It's also benefiting from the views out to the sea.

So, all in all, what a surprise this place is!

# I like it, I like it! #

What would you want to do with this place?

Well, you could move the bathroom upstairs

but of course you'd lose a bedroom.

I think the most important thing here is to keep the character,

and it's certainly got plenty of that.

Well, at the front of the property a real surprise -

a huge garden with views out to the sea,

and it gets better because there's also this half-built garage.

Actually it's more than a garage, it's a HUGE space,

more than a double garage even, so if you're into collecting junk

or restoring cars or motorbikes - fantastic thing to have.

Though you clearly need to check that planning permission

was obtained to have this built but on the assumption that it was,

it needs a bit of finishing off

then you've got yourself a great added thing here.

So, cottage itself not that huge,

space around it...phwoa...wonderful!

# Space... Give me some space...#

So a small property but lots of potential outside,

all for a guide price

of £150,000 at auction.

We asked a local estate agent

for his opinion of this lovely Cornwall cottage.

'This probably was a farm worker's cottage at one stage

'and to be fair, it is quite common'

to have gardens front and back

where neighbours sort of have a right of way, etc.

'It is unusual for a cottage of this size to have such a big garden

'and it really will be an added benefit to the property.'

Would it be worth relocating that downstairs bathroom?

Personally, I would lose one of the bedrooms upstairs

and take the bathroom upstairs.

OK, you will lose a bedroom, but I think it will be easier to sell

in the future and also it would give you more space downstairs.

What could the resale value of the place be once renovated?

When the property's been renovated to a decent standard, I feel

the value of this property will be in the region of £220-£230,000.

And the potential rental income?

I feel the rental value will be £700-£750 per calendar month.

Well, if it's character you're after,

you can't go far wrong with this place.

The only problem I see is that this kind of property

does tend to attract a lot of interest at the auctions

and that pushes up the price.

So let's see what happened when it went under the hammer.

This is a cottage in a glorious position,

great views from the first floor to the coast.

May I say 120? 120 yes, I'm bid.

May I say 130?

130? £130,000, I'm bid.

Is there 140?

Yes, £140,000 I'm bid.

150 I'm bid.

May I say 160?

I'll take five if it helps. At £150,000.

May I say 155?

£155,000, I'm bid.

£155,000. May I say 160?

I'll take £2,500 if it helps?

Got £155,000. Is there £157,500 in the room?

157,500. 157,500. 160? Is that 159? 159, I'm bid.

£159,000. 160, madam, thank you.

At £160,000 right at the back of the room.

The property's on the market and going to be sold at 160. At £160,000 for the first time,

£160,000 for the second time.

£160,000, is there a one anywhere in the room?

At £160,000...

Thank you, madam, it's yours at £160,000.

It was Leanne who made the successful bid of £160,000.

She's a scientist with a PhD in stem cell research.

Originally from Cornwall, she's purchased the cottage

with her partner Ben, and the couple plan to make this their new home.

I met Leanne back there to find out more.

Leanne, lovely to meet you. Congratulations.

Tell me why you wanted to buy this lovely place.

Um, well, myself and my partner have been looking for a long time.

Both grew up in the area, been away to study and work.

We've gone to a couple of auctions

and done a couple of other sales and not been quite successful.

We just love the stone cottage, the older style rather than the new,

so we saw this one, it came up at auction and we just went for it

and obviously it all worked out and meant to be so, yeah!

Just all the features and the general appeal,

plus the outside space is great for us cos we've got a few additions!

We've got two dogs and we've got chickens and ducks

so we need a bit of space!

Plus my partner is very much into car restoration so that garage

is a big bonus for him.

He likes his work.

So, where are you living at the moment?

We are living with Ben's parents at the moment,

we've lived with them for about 3½ years

since we moved down from Leicester,

since I finished work up there and study,

and we're living in a caravan in the garden so...

A caravan(?)

So we're quite excited to have our own property, so yeah,

we can't wait.

What was it then about this place that you loved so much?

Initially, it was obviously the price,

the fact that it had quite a low guide price,

and just looking at that, really.

And just the views, the area - we're both local, we love the area,

we definitely just wanted to be in Cornwall.

Leanne and Ben have found just what they're looking for -

an old stone cottage with sea views and a large garden.

So they've accomplished the first stage of their plan

by being successful at auction but now comes the hard work.

OK, so tell me what you're going to do to sort this place out.

Initially, the thing that we'll be starting straight away

will be to completely gut the property,

the walls upstairs are all stud walls - those will all come out.

This area will all be gutted, the kitchen area

and once we've got the bare skin we'll actually work out a layout.

So you're going to take everything out and then decide what to do.

Yeah, once we can say, "This is where the kitchen will go,

"this is how much space we've got,"

and just kind of walk it out in our heads.

So what about if you have to put walls back that you've take out?

Well, they're only partition walls upstairs

and I think we'd like to change the layout so the whole point

is that, I mean, down here there's not too much that we can change,

there's an RSJ above us supporting so there's not too much we can change,

but upstairs it's quite a blank canvas if we take the walls out.

What about down here then with this AMAZING fireplace?

Yeah, it's certainly one of the best features.

I mean, it has got a lot of really nice features, this property,

so we're really excited about

probably uncovering more of them as we go along

and this fireplace is the major one.

So definitely the first thing this week

is we're going to get a log burning stove in here.

We've already ordered the flue liner and we'll do the chimney,

then literally what we can do is, as were demolishing,

we can burn at the same time and dry the place out and get it all sorted.

-That's a good idea!

-Keep us warm while we're working! Yes.

# By the fireside

# With you... #

It's certainly a practical idea and I think a log burner

will sit really well in that great fireplace.

So who's going to do the work?

90% of it will be myself and my partner Ben.

His background is IT but he is sort of...

In Cornwall you have to multi-task

so he's done a lot of building, started off as a labourer

and then he actually project-managed a really big bungalow renovation

last year and done contract work for a conservatory company

so he's really got a building background so he'll do most of it.

I'll be doing as I'm told!

And we have got a really good support network of friends

who are builders, quantity surveyors, etc.

So it will be a little bit of extra labour as and when needed

-but on the whole it'll be us.

-And what's your background?

My background is that I have a degree in animal science

and then a PhD in cancer studies and molecular medicine.

Wow!

Depending on what they decide to do,

Leanne and Ben have set a budget of between £35 and £50,000

to get the place up and running.

Obviously there's a lot to do outside

so it's quite a project they've taken on here.

So what's the timescale for the work?

I think the inside will definitely be six months

and it'll all be fine, but I think for the outside as well,

for everything to be finished we're looking at a nine-month project.

Well, listen, congratulations, I'm glad you found your great home.

-Thank you.

-I look forward to seeing how you get on.

-Yeah, thank you.

-Well done.

-Thanks.

Well, it sounds like Leanne and partner Ben

have found their ideal property here

and it's certainly better than the caravan they've been living in.

Somewhere for the ducks and the chickens,

and of course, somewhere for Ben to do his car repairs.

Still, lots of work to do to sort the house out,

how are they going to get on?

You can find out later in the show.

MUSIC: "Thriller" by Michael Jackson

Today I'm in Gravesend, Kent,

just 25 minutes from Central London by high speed train.

The name Gravesend may sound rather spooky,

so will the next auction lot be a thriller or a shocker?

Under a mile from the Gravesend town centre

and the train station is the property I'm here to see today.

It's a two-bedroom mid-terrace.

It had a guide of £95-£105,000.

It looks quite nice from the outside,

but I've noticed one negative already,

parking around here is a nightmare!

The road is noisy, it's all restricted

and there's not EVEN enough room to have any off-street parking.

I'm going to have a look around.

So it's traffic wardens on the prowl round here

rather than ghosts and ghouls,

but from the outside this mid-terrace look pretty promising.

So, not too bad.

First impressions, it's typically laid out as you'd expect

a terraced house to be.

Good little lounge there, stairs, second reception room.

It's a bit of a cappuccino colour scheme going on - beige everywhere.

It's a bit tired, it's got wallpapered ceilings here,

you've got a sort of stipple effect over there,

no features to shout about.

The kitchen through here, again,

really old-fashioned, it needs a complete modern overhaul.

So you're going to need to spend money here.

The kitchen needs to be turned right around

and dragged into the 21st century from the 1980s.

# I said upside down you're turning me

# You're giving love instinctively

# Round and round you're turning me... #

The good news is that so far all the work needed

appears to be cosmetic

as the building itself seems to be in good nick.

What about upstairs?

Upstairs you've got two bedrooms,

but the big downside is the bathroom.

Great it's upstairs, but the only access is through this bedroom.

The bathroom also looks as if it's stuck in a bygone era.

# That's just the way it is... #

But does the awkward layout here have to be like this?

Well, I've seen this done so many times before and it can work.

You put a corridor along here,

which means the stairs would need to be moved

so the access will be this way.

It's a lot of expense, it's a lot of work,

you may need an RSJ to support the walls downstairs.

And you are still only left with just a two-bedroom house.

# That's just the way it is... #

As it stands the configuration of this mid-terrace house

is seriously limiting.

You couldn't really rent it out to individuals, for example.

But I think there may be another option out back.

Well, this is the little garden you get with the lot,

and this is an outbuilding and, of course, there's the old outside loo!

So anther option is to make this into a proper working toilet,

accessed off the kitchen.

But again, that's going to cost you.

My concern is these properties have a ceiling price.

If you spend too much money, the danger is you will not get it back.

You must do your research.

Think about what the local market dictates,

rather than developing to your own personal tastes.

There may be issues with the layout

but I really quite like this two-bedroom terrace.

It went to auction at a guide price of 95-105,000.

We asked a local estate agent to look around

and give us her thoughts.

The property's a very standard mid-terrace, two-bedroom property.

There's a lot of these in the Gravesend area.

However, they're very popular.

So far, so good, but what are the pros and cons

of this particular property?

The pros for this property, I would say,

it's only a short walk to the Gravesend town centre.

However, a big no-no is the parking issue along this road.

The parking situation may put some people off,

but what could the place rent out for

if the purchaser renovates it as a two-bedroom house?

Once this property had been refurbished to a suitable standard,

being a two-bedroom property

you should achieve between £650-£700 per calendar month.

And if they extend and make it three beds?

If it was a three-bedroom property, possibly up to

775 per calendar month, not a great deal of difference, really.

Food for thought there.

Is it really worth moving the bathroom?

How would it affect the resale value?

If this property was refurbished as a two-bedroom property,

you would achieve around about £130,000.

However, if it was made into a three-bedroom property,

you'd probably achieve up to £150,000.

Well, this is a nice little Victorian terrace.

It needs a complete overhaul, but the big question is,

what do you do about that bathroom?

Well, that's up to the new buyer, let's meet them at the auction.

Good-looking house 95-105 guide start me at 95,000.

95 I've got, at the back. 95 I'm on the way.

At 98. And 100. And 100. And 2?

102 I've got in the middle. And 5. 105. 105 I've got.

And 7 now, if you like. At 107. 107 is sitting. You're both sitting.

Are you together or...? You're going to have a punch-up afterwards.

I've got you first, sir, at 107. 108 with you.

109? 109. And 10 to either of you sitting down. 110. It's 110 and 11.

111. 111. And 12. 112. And 14, 114. And 16. 116.

£118,000 to the gentleman sitting on the end of the aisle,

make no mistake. 120 it's against you sitting and you standing.

120 I've got. And 2. 122.

122. 122 I've got. 124. 124 I've got.

He was very reluctant though, make 126 and he might not come back again.

126? 125 I've got, 125. 126, it's up to you.

126, he says, "Yes." 127? 127.

127,000, one more go.

127, good man.

127. And 128 now. It's against both of you standing and sitting again.

For the first time then at £127,000 sitting at the end of the aisle,

make no mistake.

For the second time at 127,000, your last chance.

Third and final time at 127,000.

If you're sure, you've got it, sitting down, well done.

Good bid, £127,000. Well done.

That final winning bid, 22,000 over the upper guide price,

came from Peter who was at the auction with his wife Sophie.

He runs his own company fitting and servicing fire sprinklers.

# Rain drops keep falling on my head

# And just... #

I met Peter back at the property to find out his plans.

Peter, I loved the auction.

Your wife looked SO relieved when the bidding stopped at 127.

-Yeah, she certainly did.

-She didn't want you to go any further did she?

-No, I already went more than I should've.

-Come on, spill the beans,

-how much were you supposed to spend on that day?

-About 120.

Did your wife go mad?!

She didn't speak to me for a little while so...

She's going to forgive you when it's all looking beautiful, I'm sure.

Yeah, hopefully. Peter and Sophie have three young children.

This is the third property that Peter's bought, one for each kid

as a long-term investment to pay for their university tuition fees.

Forward thinking or what?

So, how many kids do you want to have? Hopefully you'll stop there.

No, no, that's a debateable question!

Before I proposed to my wife, I told her I wanted as many as my nan had.

-My nan had 12 children.

-What?!

Erm, so we had a little bit of a haggle and we got down to seven.

So you're going to buy half a street?

Yeah, that's right. I might need to get a larger street.

Peter, I got to say, you are ambitious.

At the moment I see life's like a game of Monopoly.

If you want to win a game of Monopoly,

buy as many properties as you can and stretch yourself at the beginning,

and towards the end of the game sit back and collect the rents.

I sort of look at life like that.

Now, I wouldn't want to imply

that Peter was PLAYING at this, not at all.

But I reckon he may be taking a bit of a chance in his strategy

for this particular renovation.

Tell me the story, Peter,

why did you want to buy this house in Gravesend?

I'm actually buying it for a tenant in mind.

They was looking for either Gravesend or Dartford.

It just so happened.

I've tried to buy through estate agents for three or four months

and they kept falling through, so when the auction came up,

this was just the only one really that suited the needs for it, so.

There is clearly a risk involved

in providing a rental property for a specific tenant.

What happens if their circumstances change?

But Peter's sticking to his game plan.

So, firstly, what's your budget?

-15,000.

-So you've got 15,000. What are you going to do with that?

Put an extension the back behind the kitchen to house a bathroom.

The bathroom that's upstairs then becomes a third bedroom,

so we'll have a bedroom off of a bedroom as opposed to

a bathroom off of a bedroom.

New windows, hopefully,

and then the rest of it should be just a paint job.

So, why have you decided to go down that route?

There's so many options with a property like this.

Does it suit your tenant to have the bedroom off of the bedroom.

Yeah, it certainly does. They've got a newborn baby, it would be like

they could have the nursery off of the bedroom for the shorter term,

and he's got a computer room wherever he lives anyway

so that'll be his computer room

and house everything and keep it separate from the house.

So do you really think that within that budget of 15 grand you can build,

you can put a new bathroom in, a new kitchen?

-New kitchen, yeah.

-New kitchen, new windows?

Yeah...

I'll do a lot of work myself, a lot of friends,

a lot of my staff at work will do bits and pieces.

What about the parking?

This is just not an ideal road for parking.

No, it's not the greatest,

but at present the tenants don't actually drive.

He's actually timed the walk himself down to the train station,

five minutes, so at present it won't be a problem

but we'll see after that.

So how long do you think it's going to take you?

Having watched the show before,

I'll err on the side of caution and say three months

but it should be quicker.

I'll expect you to be quicker than that! Three months is a long time,

you'll be able to knock this out before then.

-What are you thinking, realistically?

-Six to eight weeks,

-I would've thought.

-Brilliant.

Peter, it's been lovely meeting you.

It'll be exciting seeing what you do and how you do it.

-OK, thanks very much.

-Well done.

-Cheers.

I'm not convinced about Peter's plans for the extension

and the bathroom.

He is going to spend a lot of cash

and he's already paid top dollar for this!

But if you view life like a board game,

if you want to pass GO you're going to have to take a CHANCE.

Find out how he gets on later in the programme.

Coming up there's a mine of a different kind in this former

colliery house in County Durham.

This place is actually a bit of a gold mine!

In Kent, numbers aren't just financial for Peter.

Realistically, probably end up with more houses than children,

but quite what the numbers are is to be discussed.

But first, Leanne appears to be taking everything in her stride

in Cornwall.

So I can just relax, I don't need to worry!

Time now to return to the beautiful Cornish hamlet of Paul,

where this three-bedroom cottage sold at auction for 160,000.

The successful bidder was Leanne

who purchased the property with her partner Ben.

Leanne and Ben both grew up in the area and returned home over three years ago.

They've been looking for a new project since renovating their previous house in Leicester.

I think it's fair to say they're very keen to have a place of their own.

We are living with Ben's parents at the moment,

but we've lived with them for about 3½ years, since we moved down from Leicester,

since I finished work up there and study. We're living in a caravan in the garden. So, yeah...!

We're quite excited to have our own property. So, yeah, we can't wait.

The property did benefit from a large garden,

fantastic sea views and a partially-built workshop.

However, internally it did require some modernisation and possible restructuring of the living area.

Well, one year later, we're back to find out whether Leanne and Ben

have managed to ditch the caravan and create their dream home.

On the outside, the brickwork has been re-rendered and new skylights and a front door have been added.

The ground floor, which was the living area and kitchen,

has now become two bedrooms, one which doubles as a snug with a foldaway bed.

The second, where the kitchen used to be, is now the master bedroom.

And although the bathroom has not changed location, it has been thoroughly updated.

With the downstairs becoming bedrooms, the living area is now on the floor above.

Where once there were three bedrooms, now there is one large open-plan living area.

Gone are the low ceilings and stud walls

and the kitchen has been brought upstairs.

With such a transformation, there must've been a lot of hard work involved.

The main thing to the property that we've done was to completely gut the house and property to start with.

There was no damp proofing in the floors, so that all came out.

We had to obviously screed the floor. Then we put underfloor heating all downstairs.

Upstairs, all of the A-frames went back in, full insulation in all of the roof.

All of the joists came out and they were all replaced on the floor upstairs.

Then all of the render left some quoins exposed.

Then it was all sort of the finishing touches, really -

new kitchen, new staircase, new bathroom.

So, yeah, quite a lot of work's gone on.

I love everything about the property.

I really can't say enough how proud I am of Ben

and all of the work he's done, all of the ideas he's had.

He's just made it a fantastic space to be and to live for us.

He's chosen everything. I helped with the design of the kitchen,

but it was all really in his head already.

The paint colours, he chose everything.

He was just, yeah, he's got a really good eye so I can just relax, I don't need to worry.

Leanne and Ben had hoped to have the project complete in around nine months.

So were they able to stay on course for that?

I think we're just coming on for a year now.

I think we weren't 100% sure. We thought there'd be a lot of work. We didn't underestimate that.

But we weren't sure exactly how much we'd have to rip out.

So the extra couple of months has just purely been down to that

and also the fact that since you last came down, I'm now working full-time.

So it's been kind of left to Ben to sort of carry on.

The couple had a budget of between £35,000 and £50,000. Did they manage to stick to that?

I think we've done pretty well with the budget, actually.

We've still got some work to do outside,

and I think when we have completely finished that,

we should be at around the 55 mark by the time we've finished everything.

So, whilst the timescale and budget have gone slightly over, overall they've done a great job.

Leanne and Ben paid £160,000 for the property

and have spent a further £55,000 on the renovations, giving them a total outlay of around 215,000.

We asked two local property experts for their opinion.

First impressions of the property are that it's been renovated to an exceptionally high standard.

The space downstairs,

the bedroom obviously doubling up as another reception room

downstairs here is a very good idea.

The idea of making upstairs open plan with the vaulted ceilings is just very unique.

I think the open-plan living area upstairs

has been utilised very well - the space has been used

but yet it retains that certain cosiness as well.

If the property were to be rented out,

what could the monthly income be?

If I was to put this property up for rent,

I would expect it to achieve £750 to £850 per calendar month.

I think if I was to put this up for rent, I would expect to achieve

between £750 and £800 per calendar month.

I haven't even thought about rental at all, and I don't think Ben has,

so that's actually not something I'd considered.

But that's higher than I think I probably would have valued it myself, so that's really good.

What could its value be if the house were put up for resale?

If this property was to come on to the market to sell,

I'd expect it to achieve £240,000.

If I was to put this on the open market today

I would expect to achieve a figure somewhere between £235,000 and £240,000.

I think it reaffirms that we've done a good job, and that if

we wanted to do something again there is a profit in what we're doing,

so we could do it again.

It would be really hard to leave this place,

so it would definitely need us to really consider all of the options.

Those valuations would give Leanne and Ben a tidy profit pre-tax

of between £20,000 and £25,000, after the usual selling expenses.

Whilst they're in no hurry to move,

are they tempted to renovate more properties in the future?

Next time, if we were to look at properties,

I know that Ben's already looking at things like barn conversions,

so I think it would be a bigger project.

And it would just be lovely to do something

where we could again put our own stamp on it,

and perhaps next time it would be a home that we could stay in

for a longer time - the foreseeable future if not indefinitely -

a real family home.

Today, I'm in the former coal-mining village of Blackhall.

The rows of terraced houses were once

full of miners from Blackhall Colliery.

But the village has now become a bit of a commuter area for workers

at the nearby call centres in Hartlepool and Peterlee.

Tourism also boosts the economy,

as it's right on the North Sea coast of County Durham.

Well, this nearby beach was once strewn with coal.

But its claim to fame is that it was the setting

for the climactic chase scene in the 1971 film Get Carter,

starring Michael Caine.

Well, in that film this beach was black from the coal spoilings

transported here by the colliery conveyor belt.

Well, it's taken the closure of the mines

and a £10 million refurbishment programme

to return the beach to its pristine condition.

The beach really has been transformed.

It's lovely. Especially if you remember the mess it was at the end of that film!

And the beautiful beaches go on as far as the eye can see.

Well, right in the heart of Blackhall

is the property I'm here to see.

It's one of these terraced houses,

probably built for the miners around the 1900s.

Guide price was £29,950 -

for a two-bed?! That's got to be worth a look.

There's a large front garden, which is unusual for a terraced property.

From the outside, the place is showing its age,

and I'd say that the roof looks in need of some attention.

So, what have we got? Well, quite an interesting layout.

Through the front door, and the stairs go off there

and up to your two bedrooms and a bathroom.

I think that's quite a good use of space,

because it creates a really nice room here which is your living room.

Now, originally this would have been your classic two-up two-down -

two rooms down here, two upstairs -

but as I said, there has been the addition of a bathroom upstairs,

which is good news. In here, lots of light coming in through the windows.

I'd like to see an open fire in that fire breast there,

that would really give a focal point to the room,

but then through to the second room downstairs, your kitchen...

Again, there aren't many rooms,

but they're a good size. There's nice high ceilings,

enough room in here to have maybe a kitchen table

to create a bit more of a sort of family space.

The units - well, judge for yourself.

If you were renting this place out, they might be OK.

I think I'd want to spend a bit of money in here, especially by putting

some nicer flooring down.

It is pretty much doing what it said it was going to do

and I like what there is.

KATIE MELUA: # Everything you are

# Is just what it says on the tin... #

That narrow staircase looks a little daunting.

It's steep but it is functional.

And up here, the two bedrooms look in pretty good condition,

although I'm not sure the same could be said of the bathroom.

But either way it would not be a bad buy

at around the guide price of £29,950.

Well, the bathroom is a little bit dated and it would definitely benefit from a new bathroom suite.

But the main thing is it is upstairs, which is a real bonus.

You have got two bedrooms. That one not so big.

The front one, yeah, a fairly decent size. It's a great little house.

But let's just look at the numbers for a second. If you could get this for anything like that guide price,

and rent this out for say, round here, £400 a month perhaps,

you're looking at a round about a 20% yield on your investment.

Where are you going to get that kind of return these days?

This place is actually a bit of a gold mine.

# There's a gold mine in the sky

# Far away... #

There really is very little to do upstairs, so I think

it would be worth investing some money in the bathroom.

Looking out from the back room window,

it looks as if there may be some extra toilet facilities, too.

A real bonus to the house, something you wouldn't expect necessarily from a terrace like this,

is that you've actually got quite a lot of outdoor space.

At the front, a decent sized garden.

And at the back, a really useful little, well, rear courtyard area.

A couple of sheds. Probably at some stage these were the original outdoor loos!

Um, but useful space.

And glancing up at the back again, a few bits and pieces to sort out. But in general,

nothing that's got me worried at all.

So this mid-terrace that was guided at 29,950 quid, gets a tick from me.

Let's see how a local property expert rates it.

I think the property is in quite good condition.

It does need some updating. It's only partially double glazed.

It's already got a combi boiler, which is a great addition as well.

I would probably change the kitchen,

although it depends if you want to live in it or rent it out.

Get a re-skim, get it carpeted and get it decorated.

How much rental income could the house achieve?

I predict around about £400 per calendar month.

So the yield on this house could be impressive,

if it was bought near to the guide price of just under £30,000.

But what could it re-sell for?

Once renovated, if put on the market,

there is a ceiling price with these properties.

I think probably between 60 and 65,000.

Well it might not be particularly glamorous,

but can you see why this property is a really amazing investment?

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

We're going to start with lot number one.

We'll start at 20. If I don't get 20 we won't go anywhere.

I need 20,000, thank you. One bid of 20,000.

22,000. 24,000.

26? No. I'll take one if it helps. At 25?

25,000 bid.

26? I am selling it at £25,000. 26,000.

27?

I'll take 500. 26½ bid. 27. And a half?

£27,000. Anything further?

I'll take 500 anywhere else. I'm selling at once at 27,000.

I'm selling it for the second time at £27,000... Sold.

That successful bidder who paid £27,000

was property developer Kami.

He lives in Newcastle and has just added this mid-terrace to his expanding property portfolio.

To find out what attracted him to the place

and what his plans are, I went to meet him there.

-Kami, good to meet you.

-Nice to meet you.

-Congratulations.

-Thank you very much.

So it's still possible to get a decent house for 27 grand?

It's a bargain, isn't it? A proper bargain.

-So how was the auction?

-The auction was OK. On the auction day I went to the wrong hotel.

You went to the wrong hotel?

Yeah, they both have the same name, I went to the hotel in Gateshead.

So I travelled from Gateshead to Gosforth in 10 minutes.

-Wow!

-Crazy.

-Why are you focusing on this area?

-Nice people, the people are nice.

There's always a market for housing. Houses are cheap.

Once people move in the houses, they never move.

Not like the city, where they're always moving around.

They tend to move all the time. But in a village like this,

once they get a nice house, they tend to just stay.

-Do you know the area?

-Yeah, I've been here for about 20 years.

-You've lived here.

-And what about owning property?

-About 10 years.

-So have you got property similar to this one?

-Yeah.

-And how do they work

-as a rental property?

-Straight away.

-I've got somebody for this straightaway.

-You have already got somebody?

-Aye.

-Willing to pay you how much?

-99% of my tenants are all on DHSS.

So I get money directly from housing benefits.

-£110 a week.

-£110 a week.

-440 a month.

-Wow!

Bargain.

If you wanted, you could pay this off with the rent in five years.

-I could, aye. But I won't.

-Right.

-I'll just buy more.

So Kami has a masterplan. But he almost missed the auction.

Luckily he got there in time to bid.

He's been tracking house prices around here

and reckons he's got a bit of a bargain.

This one sold about four or five years ago for £56,000.

-Woah!

-Aye. It was dropped back to 27. I bought it for 27.

But rental income has always been the same.

Your yield is doubled. You basically paid half the cost of the house but the rent is the same?

Yes. The rent always stays the same. Property prices go up and down all the time.

And how do you finance it? Is it just...

Banks. I phone my bank manager up.

So, you're lucky to have such nice bank managers?

Aye, he's good. I ring him up and he sorts us out.

# Going to the bank... #

So tell me what you are going to do to sort this place out?

The floor needs changing. The walls have a few holes in. It doesn't need re-skim.

The upstairs, the bathroom needs done out.

The windows and doors.

I've got to look at the electrics, check the gas boiler.

First of all, I check the roof first. I'm sure there's damp in the house.

I've seen a leak in one of the ceilings. Start from the top, work my way to the bottom.

-What's the budget for the work?

-Windows and doors about two,

the bathroom's about five.

I mean, luckily, the rewiring's already done, so I have saved money.

It's already got gas in, which is a bonus.

So, about seven or eight grand, I think.

Kami doesn't do the work himself.

He has a team of local tradesmen and selects the skills he needs

depending on the work each property requires.

What's the timescale for sorting it out?

This one, I think if I get the lads together, four or five weeks max.

-And you've already got somebody lined up to rent it?

-Aye.

It's a small village. Everyone knows everyone.

They'll be thinking who's going to get it.

Traditionally, I would put Blackhallers in, people from Blackhall. Give them the first knock.

-Just local villagers.

-Oh, great.

So you're providing a good service?

-Congratulations.

-Thank you.

-Good luck with it.

-Cheers.

I'm sure you'll do an absolutely splendid job,

and look forward to seeing you again.

There are a lot of doom mongers in the property world

at the moment.

But, as Kami proves with this property,

if you know what you buy, there is still so much money to be made out of buying houses.

You can find out how Kami gets on restoring this place later in the show.

Did our fearless developers emerge victorious?

Or did they flounder in the shallow end?

Let's go back and find out.

Back now, to Gravesend in Kent,

to check up on progress at this two-bed mid-terrace house,

which Peter bought at auction for £127,000.

This is the third investment property that he's bought,

one for each of his three young kids,

to help pay for their future education.

MUSIC: " Kids" by Robbie Williams & Kylie Minogue

# Don't mind doing it for the kids.#

Peter was keen to buy more property, and have more children.

Before I proposed to my wife, I told her I wanted as many as my nan had.

-My nan had 12 children.

-What?!

-We had a bit of a haggle,

and we got down to seven.

So you're going to buy half a street?

Yeah, that's right. I might need to get a larger street.

Peter gave himself six to eight weeks,

and a budget of £15,000,

to rip out the kitchen, move the bathroom into the old outside loo,

and then create a third bedroom upstairs.

We're back, ten months after our first visit,

to see if this build has reached its final destination.

MUSIC: "Incomplete" by The Backstreet Boys

So, there's a bit still to do.

Maybe Peter can explain what happened to his three-month timescale.

Quite naive, actually.

It was nearly eight weeks to three months

before we actually done anything.

There was concern whether we had to have planning permission.

Although quite a small extension, we've got a manhole out the back,

and the proximity to the property caused a concern.

In the end, we didn't actually need planning permission,

but that was three months down the line before we even realised that,

and could get started.

So the time frame totally went out the window.

# Incomplete. #

Then the tenant Peter had lined up, moved in, and Peter put the renovation on the backburner,

while he carried out a contract for his fire protection company.

So, progress has been much slower than he hoped,

but the lion's share has been done.

First thing we got done was all the windows replaced, new double-glazing.

New kitchen, new bathroom.

Re-located the access to the back garden,

moving the door into the living room.

and started the decorating throughout, really.

Moving the bathroom to the rear of the kitchen

was a bigger job than Peter anticipated.

I wasn't sure it was the right thing to do,

but is he happy with the result?

Oh, certainly. Moving the bathroom has been more than successful.

It's quite surprising how large the existing bathroom upstairs was.

Indeed, I thought the bathroom downstairs was quite small,

until the sanitary ware went in.

Then it looks quite large again. So, yeah, very well.

More importantly, two of Peter's three children

seem pretty taken with it, too.

# The kids are all right. #

What about the plan to get more properties,

and more kids?

Um, we'll have both. We're going to have more of each.

Realistically, probably end up with more houses than children.

But quite what the numbers are, is to be discussed.

I'm sure Peter's wife Sophie will have quite a lot to say about that.

We know that the timescale has slipped,

but what about the £15,000 budget.

Has that gone out of the window, too?

About £19,000 in total, on the end. We are pleased with that, really.

£19,000, on top of a purchase price of £127,000

makes a total outlay of £146,000.

We asked two local experts to look around

and give us their thoughts.

I think moving the bathroom downstairs is a good idea.

It's created extra space upstairs,

meaning an extra bedroom, which should lead to more money.

If this was my own personal property, for me to live in,

I probably wouldn't have moved the bathroom downstairs.

However it is good, for both renting and sales, to increase the value.

So, if Peter were to consider selling in the future, what could it be worth,

bearing in mind his £146,000 investment here.

When this property is completely finished, I would say

this property should fetch in the region of £140 to £145,000.

Once this property's been fully renovated,

I would expect to achieve somewhere in the region

of £150,000 to £160,000.

The higher one's about what I expected, really. The £160,000 mark.

I do feel that, in the condition it's in,

it's quite difficult to value.

When it's totally presentable for market,

it would achieve the £160,000 relatively easily.

Let's hope Peter's right,

because if he had been thinking of selling it on, there's the chance

he would make a loss. Thankfully, this was bought as a long-term investment,

so what kind of rental income would he get, once the work's completed?

If I were to put this property on the market on a rental basis,

I would expect to achieve in the region of £750 per calendar month.

Putting this property on the rental market would achieve

around about £750 per calendar month.

That's interesting.

That's more than what I've currently let it out for.

But I've got a long-term tenant who'll be here for five years,

so I'm more than happy with that.

MUSIC: "Sweet Child O' Mine" by Guns'N'Roses.

Those rental valuations would mean a yield

of around six percent for Peter, which is not bad at all.

But surely this is all about the warm glow you get,

knowing that you're feathering the nest for your nearest and dearest?

Oh, definitely. Keeps them smiling.

They don't really realise it yet.

They wander around, calling it their houses, and what they've got.

But certainly when they get older, it'll be well worthwhile.

We've returned now to the Northeast village of Blackhall,

where earlier in the programme, local property developer Kami

bought this mid-terrace for £27,000.

He has a sizable portfolio of buy-to-let properties,

and was going to refurbish this house

and let it out to local tenants.

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

The floor needs changing. Upstairs, the bathroom needs done out.

First, I'll check the roof. I'm sure there's damp in the house. I'll start from the top

and work my way to the bottom.

He'd set a budget of £7,000 to £8,000,

and was looking for a quick turnaround

from his team of tradesmen to compete the job.

Well, it's now two months later, and the house is finished!

The garden's been cleared, and Kami's keen to show us around.

The windows and doors have been replaced, front and back.

And, through the back door, a great new kitchen has been installed.

At the front, the living room now has a new feature wall,

and has been decorated throughout.

The refurbishment continues upstairs.

In the bathroom, the colour scheme has been muted,

and a new suite has been installed, with a shower.

So the two most important rooms in the house now look great.

In here, we've done a brand-new kitchen, all the way round. Brand-new sink.

We've done the hob, extractor, the oven as well.

Put new windows in, new doors.

Kept the layout the same way as it was and we've done new floors, as well.

And brand-new switches all the way round, as you see. So it's good.

VERY good.

But it hasn't all been plain sailing,

because Kami had a major legal problem,

just as he was about to compete on his auction purchase.

The day I was going to get the house,

the day before that, my solicitor went bust.

I didn't think it was a problem, then I realised I couldn't buy it without a solicitor.

I ended up getting another solicitor, and bought the house in seven weeks.

It should have been four weeks. I ended up getting fined, as well.

So Kami was hit with a penalty payment by the auction house, because he couldn't complete

within the stipulated 28 days.

Not because he didn't have the money, but because he didn't have a solicitor.

That delay meant Kami's team had to work flat-out.

From start to finish, it took us 11 days.

11 days non-stop. Had everybody in at the same time.

He's already got tenants lined up.

So, upstairs, while the two bedrooms were being decorated,

he also laid the new carpets that they'd requested.

His team made sure the roof was watertight,

and checked the electrics throughout the house.

A new fuse box has been installed, but the boiler had only recently been put in.

And the work continued outside.

What we done, we got the tiles, took the tiles off,

cos they were causing loads of damp.

So we brought the tiles out, and then we concreted.

Solved the problem, so we had that down.

The former outside loo and storeroom now have new doors,

and provide extra valuable storage.

So what effect did the delayed start

and the auction house's penalty payment of £600

have on Kami's budget?

I think the budget was £8,000, I said originally.

I think I've gone to £8,400.

I think the only reason why it's gone over by £400,

cos I'd never considered the garden to be in there.

I ended up doing the garden, which I normally don't do.

Kami always project manages his team of builders,

letting them do the hard physical work, while he finds the tenants.

I've got the tenants moving in in a couple of hours' time. Good pal of mine.

Husband and wife, and a daughter.

I think they should be here for ever, hopefully.

Time to see what two local estate agents will make of the house.

First impressions of the property are quite nice.

It's got a little bit of a "wow" factor.

They've done it to a particularly good standard, but not overspent.

My first impressions are

that they have refurbished it to a high standard,

and it is just ready for somebody to move into.

It's clean, it's tidy it's neutral, and it works.

I particularly like the bathroom and kitchen.

They've refurbished the kitchen to a good standard.

And it will be suitable for rental purposes.

Kami's has got tenants lined up, so how much rental income

would the agents expect this house to generate?

I would expect the house to rent for £425 a calendar month.

In the rental market, I think it would probably achieve around £400 per calendar month.

How much is Kami charging his tenants?

I'll be getting £440 for this. That's what I'll be getting.

I get that for the rest of them so I'll get the same.

That's going to produce a yield of over 14 percent.

No wonder Kami's smiling.

But what is the house now worth? He paid £27,000 at auction,

and, with his budget of £8,400, that's a total outlay of £35,400.

For re-sale, we'd expect it to reach £60,000.

Re-sale for this property, I'd look at putting it on the market for offers around £65,000.

So, that's a gross profit of between £24,600,

and £29,600, before the usual expenses.

That's bang on what I thought. £65,000, top end.

So, it's not bad, is it?

Not bad at all.

Kami's got a great income coming in, and if he was to sell,

he could pocket a gross profit of up to 30 grand.

And he knows who to thank for all the hard work.

I don't do nothing, me, to be honest.

I just make phone calls. I go to the auction,

or sometimes just over the phone. And that's my job, that's it.

Get the house, and I phone the lads in. They do all the work.

So, I can't get the credit for nothing, really, can I?

Not enough for you? Well, there's plenty more where that came from.

Yes. Join us next time for more Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.

Subtitles by Red Bee Media Ltd