Episode 60 Homes Under the Hammer

-Welcome to Homes Under The Hammer.

-We know all too well now

that value of houses can go down.

It's important to buy at the right price.

One way to do that is to buy your home under the hammer.

If you're thinking you'd like to have a go at buying at auction,

then now may be the time to start.

The market is always changing, so you have to judge when is the right time to buy?

On today's show, three buyers have already put their money on the line

and here's what they bought.

'This good-looking two-bed semi in Sunnyhill, Derby,

'could be full of surprises.'

This is where it all goes horribly wrong.

'In Charlton Marshall, Dorset, this old clubhouse doesn't throw my kind of party.'

There was no alcohol or tobacco allowed on these premises.

'And in Bousteads Grassing near Carlisle,

'a three-bed semi with a nice guide price, but nasty layout.'

Bit of a design fault.

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

-'when they went under the hammer.'

-Sold.

Derby is a real mixture of old and new.

Victorian architecture rubs shoulders with concrete and glass constructions.

It was one of the birthplaces of the Industrial Revolution

and is the home of the first ever factory,

the first powered silk mill.

# Bring me sunshine Bring me love... #

From this sunny spot on the Derwent river

to here, one of the oldest suburbs of Derby.

This is the Sunnyhill area of Derby,

three miles outside the city centre, between Normanton and Littleover.

The property I'm here to see is this, a two-bedroom semi-detached

at a guide price of £68,000-plus.

Love the garden, which is always a good sign. Let's look inside.

One of the first things I notice is it's not double glazed,

which is a bit of a downside,

but the exterior paintwork is in extremely good condition, so it's been looked after.

From the moment you step into the house, you get that impression -

this is a house that someone's taken care of.

So, through into this little area. You've got the kitchen there.

Now, not ideal cos it's quite small.

I can see an easy thing you could do. Take out that wall.

What is now the rear living room area

would create a really nice kitchen/open plan living area,

which is very 2012 and definitely a good thing to do with this property.

Through to the front, and you've got this really nice living room.

Bay window, big fireplace area that you might want to modernise.

But straightaway, I'm thinking, "Yep! This is a goodie!"

MUSIC: "It's Looking Good" by The Rutles

'Although the carpets and fixtures look a little dated,

'they've certainly been well looked after.

'What about upstairs?'

If you were expecting me to come upstairs and say, "Ha-ha!

"This is where it all goes horribly wrong!" you are going to be disappointed.

It just continues to go very well indeed. Two bedrooms.

A really nice one at the front of the property with a bay window.

The loo's where it should be, upstairs. Small bedroom at the back.

You've been in property for a while.

You get suspicious. You're always on the lookout for what's wrong.

Sometimes, you've got to go, "This is a really nice property."

That's exactly what it is.

'It really is a lovely little place.

'You may find yourself less inclined to rip it out and start modernising,

'as it has clearly been loved and cared for, and is charming for it.

'I'm particularly taken with that front garden.

'It's not the only treat in store when I venture outside to explore.'

A real bonus to the property is that it sits on this nice sized plot.

There's two things you could do.

One, think about extending. There's easily room to do that.

That would come down to whether it's financially viable

or just something you wanted.

The second thing you could do

is leave it as it is and use it as an allotment.

People cry out for allotments.

Here's a chance to become self-sufficient,

plant your vegetables, plant your fruit and get back to nature.

An added bonus for sure!

# Oh, the good life

# Full of fun Seems to be the ideal... #

'There's plenty of food for thought.

'Would you extend, or develop the garden?

'Would you change the layout to make a larger kitchen?

'With its £68,000-plus guide price,

'we invited the auctioneer who sold the property to give us his opinion.'

The house has got a nice feel to it.

It's as it was built, very much, so it's not been spoilt.

You've got the ingredient here of quite a sizeable plot,

so the opportunity's here for extensions, for parking,

for conservatories, lovely garden.

It's got the extra ingredient to it, so it appeals to me.

'He likes it as much as I do, and we're agreed on its appeal.

'If a basic renovation were done, what could it be resold for?'

I think that when this was improved, it would have a value of about £105,000.

'How about the rental returns?'

Once renovated, and this came up on the rental market,

it would demand a rent of somewhere around £500 a calendar month.

'If an extension to make it a four-bedroom was done,

'he recommended a sale price of £155,000 to £160,000

'and a rental of £650 per calendar month.

'It certainly seems that either option is viable.'

There is quite a demand,

both from a sale point of view and a rental point of view.

And I would expect that, when this is updated,

it won't stay around for too long.

There are obviously things you could do to this house, if you wanted to update it.

But it is one of those rare finds -

a property that you could literally move into as it is, or rent it out.

So, weigh up whether or not it's worth spending the money to sort it out.

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

Lot number six. Start me where you like on this, ladies and gentlemen.

70,000 to put it into the bidding? Who's got 68?

Thank you. 68, I have.

68 is the starter. 69. 70,000.

71. 72 is bid.

73.

74. 75.

76. It's against you, madam, at 76.

77.

78.

At £78,000. All done?

79 at the back. 80,000.

81, thank you. 82.

83. 84.

85?

At £84,000 for the first time.

For the second time. Third and last opportunity. All done?

Sold. It's yours, sir. 84,000. Thank you.

'The hammer fell at £84,000.

'That winning bid came from Brian, who already has a healthy portfolio.

'I met him at his latest acquisition.'

# Brian

# The babe they call Brian... #

-Brian, great to meet you. Congratulations.

-Thank you.

-Tell me why you wanted to buy this house.

-Mainly because it's got possibilities for planning.

-An extension. So we could turn it into a four-bedroom, two-and-a-half bath.

-Wow.

-Or we could let it as it is.

-Have you made any enquiries

as to values of similar sized properties in this area and if that would work around here?

Good point. Thing is that the houses round here sell for roughly 100,000, thereabouts.

-That's two bedrooms.

-Right.

-With a small piece of land.

This, as you can see, has got a lot more than that.

So, I thought it was...

quite an idea that we could use it as a plot to build another house on,

which, when you look at it, of course, is not possible.

But it certainly would extend very nicely into a four-bedroomed, two-and-a-half baths.

-Right.

-A four-bedroom house round here, and there's two up the road,

done in the same way as I'm describing,

they're around 175,000, 185,000.

The idea is to let it out first, get some money back on it.

'So, Brian's bought this property for the long haul.

'Once he's made some money from letting it, he can research how much that extension would cost.

'Whilst it would mean the place would be worth more,

'the cost of doing the work may be too high to be worth it.

'Speaking of work...'

What do you do? Tell me about you.

-Apprentice press photographer as a kid.

-A press photographer?

-Yeah.

And then I became a freelance, started making real money.

And then I moved on to renting caravans in France.

-An obvious leap(!)

-Yes! Then to a travel agency!

-And then to a tour operation doing villas.

-Oh, golly.

-Now I just own a bit of property.

'By a bunch, Brian means ten.

'He owns two commercial properties

'and this is his eighth residential one.

'He hopes to have it renovated and ready for rental in six weeks.'

-What are you going to do to it?

-We're taking out a wall back there.

The kitchen is a one-person kitchen, or a one-chef kitchen.

That wall's coming out. Brick up round the doorways.

We may or may not change the bathroom.

It's a pleasant little bathroom, although out of date as far as colour's concerned.

Should be white, of course!

And we've got to renew the carpets and put in some quite nice curtains.

Windows?

I'm going to leave them because, if you look at them, they're pretty solid.

-They are. Not double glazed, though.

-No, but this isn't a busy area.

Not a lot of noise. I've checked with the neighbour. It's quiet.

The trouble is the garden, which is too good for rental purposes.

Rental people don't do a lot of gardening. This is fussy garden.

We've got to put a driveway in. MARTIN GASPS

-Fussy but beautiful.

-Yes. It's very pretty.

And the next-door neighbour does the garden. Hopefully, he'll do a bit of work for me.

-For pay, of course.

-Of course.

-So what's the budget for the work?

-About ten grand.

-Congratulations. Good luck. Look forward to seeing how you get on.

-Thank you.

So, this little property's taking former photographer Brian's property portfolio into double figures.

How will the project develop?

-CHUCKLING:

-You can find out later in the show.

'I'm in the conservation village of Charlton Marshall in Dorset,

'home to a vibrant community of over 1,000 residents.

'There's a wonderful blend of the old and new here,

'with a historical reason.'

Most of the village was rebuilt by the local lord of the manor in 1731

after a huge fire destroyed the place.

The property I'm here to see is an older one.

It used to be a clubhouse for labourers.

It was used as that right up until the end of World War II.

So this semi-detached house, like the village,

is fascinating historically.

It's got a guide price of £175,000.

So let's see why.

Wow!

-VOICE ECHOES:

-What a space! Look at that amazing ceiling height.

Somebody's already added a floor to this side.

This has got a lovely feeling to it.

So I want to know, what did they get up to in this club?

Well, this was the main club room, used for refreshment and talking,

with reading reserved for the quieter rooms at the back.

Here's an interesting fact. Women were allowed in as well as men, which is a treat!

But there was no alcohol or tobacco allowed on these premises.

What really interests me is these original features.

You've got these flagstones, which are beautiful.

And that old brick fireplace.

If you could restore these, you've captured a bit of history

and this room would look wonderful.

# Yes, those good, good old days that used to be... #

Are its good days behind it?

It's certainly starting to show its age with crumbling plasterwork,

ancient plumbing and electrics.

There's a functional no-frills kitchen in one of the side rooms,

and a downstairs cloakroom.

There's plenty of scope to change the layout.

It's scary, the amount of work to be done in this property.

But, in a weird way, I love it! I could talk about this for hours!

This room does smell a little bit damp. The paper's peeling off.

There's obviously been some problem upstairs.

I wouldn't be surprised if there's a leaky bathroom.

Look at this! This is the source of heating!

A little fire in the corner.

You've got to take into consideration the amount of money that needs to be spent.

It probably needs rewiring, replumbing, central heating.

You've got lovely, lovely old windows, though.

I think these are old Crittalls.

What I would do in this room would be to turn it into the kitchen.

Although this doesn't sit on a lot of land, there is a little bit of garden.

I think it would be great to be in your kitchen and have instant access

outside to your garden - that would work really well for families.

'The space outside isn't huge,

'so you might as well make the most of what there is.

'There's even a shed - always useful for storage.

'What about the rest of this place?'

Upstairs, you seem to lose your way a bit. It doesn't have great flow.

You've got a bathroom here, which is huge.

A bedroom down the end of the corridor.

This bedroom here and, strangely enough,

another room in the mezzanine.

This is officially classed as a two-bedroom property,

so I don't really know what this is.

But now I'm up here,

I think what you really need to do to maximise the value of this house,

is to create a few more bedrooms,

making this a four or even a fifth-bedroom property

by going across this mezzanine,

taking it across to the other side of the room.

You will lose that wow factor when you walk in the door.

You won't have that unbelievable wonderful ceiling height.

But with this property, it's about more bedrooms,

because, really, it's about the money.

'Sometimes, it's a fine line between refurbishing what's in a property

'and completely revamping the layout with cost versus return to consider.

'In this case, the split mezzanine floor

'doesn't appear to meet building regulations,

'so it's going to need substantial work done on it, anyway.

'You might as well put in a floor across the building

'to get some extra rooms and a chance to rework the entire layout.

'What does a local estate agent make of this old clubhouse

'and its rather quirky mezzanine floor?'

The mezzanine floor is a little unusual.

It would be probably more valuable

to just revert back to an ordinary dwelling,

so that you have a full first floor level.

'With sorting out the mezzanine, there's a lot of work needed.

'So, could a property guided at 175,000 be a good investment?'

Once the property has been thoroughly renovated,

I feel that the asking price on the market would be

in the region of £240,000.

If the first floor extended so that it was a full first floor,

creating four bedrooms, or four rooms of any choice,

I feel that it would go on the market at £260,000.

'So, resale values aren't too bad. What about rental?'

Once the property is renovated,

I consider that £650 per calendar month would be a suitable rental figure.

If the first floor was extended to create further bedrooms,

I consider the rent would be in the region of £750 per calendar month.

'With promising rental values, I think that as a long-term investment, this could be a winner.

'On the resale market, I'm not so sure.'

It's a fascinating property with lots of history attached.

I love it, but it's in need of some serious attention before that damp gets any worse.

It needs some thought over the layout to maximise its value.

Let's see what happened at the auction.

Lot five. Guide here is 175,000.

I do have a proxy bid, which I will execute.

So, 175. It's my bid on behalf of the proxy at 175.

At 180. At 185. 185.

190? 190.

195. 200? I'll go two, on behalf of the proxy.

At 202. Looking for four. At 204. Lady's bid at 204.

206. 206.

208. At 208,000.

Lady at the back there. At 208,000. I'll take one, if it helps you.

209.

Treat you the same. 210.

210, bidding on my right at the back.

All done and sure?

At £210,000...

-BANGS GAVEL

-Congratulations, madam.

'So, for 210,000, the successful bidder was Natalie.

'She bought it in partnership with her friend, Phil,

'who brought his dog, Muddles, to check the place out.

'Natalie's an engineer.

'Phil runs a local quad biking and paintballing site.

'This is to be their first joint venture.'

Guys, congratulations. Phil, you look very happy to have bought this.

Yeah. It's quite exciting.

There's a chance to do so much to it, to change the look so much.

Why have you bought this? Is it purely an investment purchase?

Yeah. We're looking to do it up, use some of the people that work with us

for the labour side, and professionals to do the building and to do up, sell on.

-What do you do for a living?

-Quad biking, clay shooting, paintballing.

Team work and stag type parties.

Natalie, what's your connection with Phil?

I used to work for his mum. We've been friends for a long time.

It's an opportunity to put the capital I had raised into a property

and, hopefully, increase the capital so I have a proper deposit.

'Natalie has invested all her savings into this project

'and sees it as a way for her to get onto the property ladder.

'So, there are clear objectives,

'but do they know how they're going to make their investment work best?'

What do you think you need to do to maximise this space?

It is begging to have a second floor put on it.

The mezzanine floor has got to come down anyway.

Structurally, you feel like you're on the sea, it bounces so much!

We've got to get that sorted.

So you don't limit your market,

you've got to have at least four bedrooms - four big bedrooms.

What are you doing to get your heads together for the plan?

We've invited ten different people and given them a blank sheet

with the structural walls in and said, "What would you do?"

So we've gone through all of those and chosen what we liked and bits we didn't like.

Now it's down to us to come up with different ideas and try to collaborate them.

MUSIC: "All The Plans" by Starsailor

'They're planning on using an architect, once they have a clearer idea of what they want.

'They've allocated themselves a budget of 60,000 to 70,000,

'and hope the project will take no longer than one year.'

Natalie, what part are you going to play?

I'll be picking colours!

-HE LAUGHS

-The interior,

after all the structural stuff's done.

I'll be making sure the costs don't go through the roof.

Do you think this is going to work well as a team effort?

Yeah. It'll be fine.

Yeah. We tend to think quite similarly.

It might not be exactly the same plans, but the ideas that we're trying to achieve are very similar.

On the colour coordination, I'll definitely be backing down!

If you saw my house, you'd know why.

-What colour is your house?

-Dark greens, greys. Orange!

'So, hopefully, the only potential clash here will be over colour.'

MUSIC: "Colourblind" by Darius Danesh

So, will Phil and Natalie work well as a team?

And what on earth are they going to do with this place?

What's worrying me is whether they're going to be able to squeeze a profit from this old clubhouse.

I can't wait to find out. Join me later in the programme and see how they get on.

'Coming up, I may speak too soon at this three-bed house near Carlisle.'

It looks OK.

Haven't seen anything which is worrying me - yet.

'In Dorset, did Natalie and Phil find this project a profitable pastime?'

We'll find out whether that was worthwhile.

If not, we'll find a new hobby!

'But first, how did Brian's Sunnyhill semi tot up?'

I've got the figures exact -

cos my wife did them! LAUGHS

'Time for us to head back to Sunnyhill, Derby,

'where former press photographer Brian purchased this at the auction,

'a charming and well-kept two-bed semi for £84,000.

'He had his plan for this place all mapped out,

'although there was one thing I saw as a pleasure

'that he saw as a potential problem.'

The only trouble is the garden, which is too good for rental purposes.

Rental people don't do a lot of gardening. This is fussy garden.

We've got to put a driveway in. MARTIN GASPS

-Fussy but beautiful.

-It's very pretty.

'Let's hope Brian made a very good job of getting this place the way he wanted.

'His timescale was six weeks.

'We've come back two and a half months after we first met.

'It's all looking good,

'particularly the new open-plan kitchen-diner.

'There's new decor throughout plus a new bathroom upstairs.

'It seems there have been more changes than Brian had planned.

'Unfortunately, some of them have been a necessity.'

It's a bit of a money-pit, this place.

It was well-presented when I came in, but it turned out to be not the case.

We've had drain problems. We've had dry rot, wet rot.

Beams have had to be replaced.

We've just had about the lot.

'At least the end is in sight.

'The only thing left to do is to turn part of the front garden

'into what?'

Well, this may look a mess to you, but in actual fact...

No, it's not a swimming pool. This is supposed to be driveway.

The reality is that we've had continuous rain for two months.

So we're hoping that when it stops, we can actually complete it.

'By "we", Brian means his son, Lee, and grandson, Sam, who both helped.

'After finding it difficult to get builders to start when he wanted,

'he drafted in his family to do the work.'

My son, who is a maintenance builder, he's been as good as gold.

He's been in here just about every weekday for almost three months.

I couldn't and my wife couldn't have done without them.

We have put a bit of our own work into the place, mostly scraping the wallpaper.

Oh, and going up to the tip.

'Well, there's certainly nothing tip-like in here now.

'One thing both Brian and I were keen to do

'was to get that tiny kitchen opened out.'

Well, it was very narrow, and what we've tried to do

it to make it a little bit more modern.

I'm not keen on stoves where you have to crouch to get the turkey out

so we've put the hotplates way over here.

There's plenty of room either direction. Microwave at one end.

The oven at the other. A bit of walking keeps you fit!

'It's all looking present and correct. Well, to me it is.'

Bathrooms need to be a little bit glamorous nowadays,

so we put in something - it's not very rude - called a P-bath.

The letter P, not anything else.

From there, we'll hope people will like it.

I haven't actually seen it, but the vinyl's been put down.

You've seen it. LAUGHS

You cut that bit!

'That's the Homes Under The Hammer team for you!

'Beating Brian to see the finished result.

'Given those unforeseen problems, how did the ten-grand budget hold out?'

The £10,000 has grown to £15,000.

I've got the figures exact -

cos my wife did them! LAUGHS

'Let's hope Brian gets to have the last laugh.

'With that £15,000 spend on the work added to the £84,000 purchase price,

'he's spent a total of £99,000.

'We invited two local estate agents to give us their opinions.'

Overall, the property has been modernised. It's light and airy.

They've opened up the kitchen, making it a kitchen-diner.

We've got the nice big bay window.

The garden's spacious. There's room for development.

They could have a conservatory, an extra drive. The property's lovely.

If there was anything that should have been done differently,

maybe the windows, to paint them in more appealing colours,

a bit more neutral that somebody would expect.

The front of the property needs to reflect the inside.

At the moment, it doesn't.

'Personally, I like the character those green windows add,

'but will the figures have justified Brian's spend?

'Firstly, if he fancied selling.'

Sale value for this in its current, refurbished condition,

would be between £105,000 and £115,000.

If we were to put this on the market, I would suggest asking £110,000.

At that sort of level, you'd achieve £105,000.

It's interesting.

These houses are...quite in demand because they have large gardens,

fairly secluded and it's quiet.

I don't think they're quite right.

'If the estate agents were right, Brian stands to make

'a pre-tax profit of between around £6,000 and £16,000.

'But his plan was always to let it for a while

'before considering extending or selling.

'What sort of a rental return could he see?'

The property as it is, refurbished,

would achieve between £475 to £495 per calendar month.

I would easily achieve £500 per calendar month on it.

I think that's rubbish, because I have a house round the corner, a council house, which fetches 450.

'With the rent the estate agents suggested, Brian's rental yield would be around 6%,

'not bad in this market.

'Hopefully, he'll achieve a figure closer to what he's after

'and then, perhaps, find time for some R&R.'

Yeah, my vacation time will be in September.

The kids are back to school.

Maybe we can get off to somewhere...let's say, in the sun.

Cos there's not much here.

-CHUCKLES

-'You got that right, Brian.'

# We used to walk down by the river... #

Well, I'm just five minutes from the centre of Carlisle

on the fringes of the suburb of Denton Holme.

This used to be a very industrialised area.

In recent times, it has become an extremely popular residential spot.

And with this on your doorstep, you understand why.

'The lot I'm here to see is in beautiful Bousteads Grassing.

'I suppose that, for some, one blot on this Cumbrian landscape

'could be the local gasworks.

'They're at the end of the street on which this auction property sits.

'But in a city, the nearby country aspects are always a bonus.'

There's a lot of local and ex local authority housing round here.

It is big and substantial, as is the property I'm here to see.

A three-bedroom semi-detached,

but it had the guide price of just £30,000.

That is a very low number.

The reason could be that there's something very worrying in the auction details.

But I want to see for myself.

MUSIC: "I'm Worried" by Elmore James

Right, well, that's not the most welcoming of entrances,

having the back of the staircase right in front of you.

I suppose that is where you can store bikes, hats and coats.

You could use it for that, but it doesn't give a very good impression.

Stairs up to the bedrooms there.

The kitchen and some little annexe room there.

This way into the lounge. This is a nice size.

Window at the front, window at the back, so lots of light coming in.

And it's a good size.

Clean up the floorboards. Um... Looks OK.

I haven't seen anything which is worrying me unduly - yet.

The fireplace could do with replacing.

There has to be a reason for that low guide price of 30,000.

The rather tired kitchen offers no clues.

The annexe room could provide useful additional kitchen space.

There's even a downstairs toilet,

but it's here that the body of evidence appears.

# Crack attack!

# Crack attack

# Crack attack #

So, it all starts to become horribly clear.

We're talking about potential subsidence

and the resolution for that would be underpinning,

digging out underneath the property

and putting in something which will support it.

The reason why this has happened -

I've done a bit of digging around, ha ha -

apparently, this whole area is built on a landfill site.

Other properties have gone through the underpinning route, but it's not cheap.

It requires a lot of work. There are some specialist solutions.

You're looking at 5,000 to 10,000 quid to sort this out.

So then it comes down to, is it worth it?

For a start, are those cracks moving? I don't know.

You'd have to monitor them over a period of time.

If they're not moving and you're renting this place out,

would somebody not rent it because it's got a few cracks?

I don't know. Weigh it up. Decide what you need the property for,

how much it costs to do the work, and then it's not necessarily given that you have to do it.

For the attentive buyers who bothered to read the legal pack,

the issue with the subsidence was clearly stated.

The great thing about this house, though, is space.

The garden is huge, although a bit wild.

And the good news on the size front continues -

three well-proportioned bedrooms.

But oh, dear. The cracks are really beginning to show up here.

And then there are the rather peculiar plumbing arrangements.

Bit of a design flaw, this one.

This is the bathroom, but it only contains the bath.

There's no loo. That is downstairs. Simple resolution to that.

This wall, shift it that way to create a bigger room.

On the other side, a cupboard, not as important as improving the bathroom.

A bit of work required getting rid of this wall,

but definitely, the benefits outweigh the effort.

This semi is in serious need of thorough renovation,

structural and cosmetic, but pick it up for the guide price of 30,000

and you could have found yourself a cracking deal.

We asked a local estate agent for her opinions

on this property and the surrounding area.

This is a popular area. It's very popular for rental properties.

You're a short walking distance to the city centre.

Just over the river, you have a well-known primary school,

close to the amenities of Denton Holme.

Maybe one drawback of the property is the approach by car,

through the industrial estate, past the gasworks.

I can't see any negatives. It's a good sized family property.

This style is very popular with families.

Good room sizes, three good bedrooms in an affordable area.

'How much could this place achieve if sold, once renovated?

Renovated to a good standard, including the underpinning work,

I would put the property on the market in the region of £95,000 to £100,000.

'And rental?'

I would expect the property to achieve around £425 to £450 per calendar month.

Well, a nice enough house, this one,

with just that one big potential problem.

So it is important that you don't look at it with rose-tinted specs.

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

Who's going to start me off? First bid of the day. 35?

Get me away at 35, somebody.

One might get it. 30, then. Let's get away.

30 I've got. Thank you, sir. 32, I've got. 34, may I say?

36? Shake of the head.

It's with you at 34, sir. Don't bid against yourself.

At £34,000. Are we done?

At 34. 36, new position.

38, may I say?

40. 42?

Shake of the head at 42.

42, I've got. 44.

46?

45. 46?

Seven? Eight?

Nine? 50?

Shake of the head at 50. It's with you at £49,000.

Are we done? We're selling this at £49,000. Are we all out?

At £49,000 for the first time.

At £49,000 for the second time.

50. 51?

51 I've got. 52, may I say?

Shake of the head at 52.

Back with you at 51. At £51,000 at the front.

First time, then, at £51,000.

Second time.

All done? All out? Selling away, third and final time.

'The hammer fell on a bid of £51,000, made by Martin.

'He and his wife, Diane, have developed eight properties over ten years.

'When not adding to their portfolio, Diane works as a civil servant

'and Martin's an electrician.

'Here's hoping they've done their detective work and are not shocked by the subsidence.'

Martin, Diane, lovely to meet you. Congratulations.

Tell me why you wanted to buy this place.

It's just an investment, really.

We've got a few properties round town that we let out and this just adds to it.

What was it about this particular house that you liked?

First of all, it is the price that attracts you to it. Then we had a look at it.

It's nice views outside, so we thought we'll have a look at it.

Clearly, the caveat and reason was this whole thing

about "did need some fairly major structural remedial works".

We looked at the legal pack prior to it.

The survey said it may need underpinning, it may not.

In the meantime, I've had a firm have a look.

They're saying we need a borehole done to see what the ground's like below.

Based on that, we've had an estimate of about five grand to sort it.

Five grand would buy you what, then?

They'll come down, drill it, and any gaps as such,

they inject with this foam that goes rock hard within a second.

That's what we're hoping for.

Did you contemplate, at all, not bothering with the underpinning?

Yes, I must admit. The advice I'd been give was just to monitor it and see if it's still moving.

If the cracks start getting bigger, it's still moving.

But we don't want to sit on the property for six month waiting for that.

So we thought if we made it right for the cost it's going to be, it'll solve that problem initially.

'It sounds like Martin has a plan of attack to fix the cracks.

'I hope the costs don't spiral when they finally get cracking.'

How did you get into property developing?

About ten years ago, we bought a property, started doing it up,

and then we've done one to two a year?

Maybe one a year from about then.

This is number nine now.

Then we've done two others that we've just bought and sold on.

-So, yeah.

-It's gone well?

-It's going OK.

Going OK, yeah.

-Who does the work?

-Martin does most of the work.

I do the decorating side of it.

We'll get a few people in to do the bits and pieces.

Tell me what you plan to do.

There's walls needing removing in the kitchen, built-in cupboards.

The bathroom upstairs. We need to move a wall to get a toilet in.

Rewire, replumb, new bathroom, new kitchen,

redecorate, recarpet and just make good from there, really.

'That's an extensive programme of work.

'The couple hope they can complete their renovation for only £19,000,

'including the underpinning, within six months.'

What's next on the agenda after you've sorted this place out?

-BOTH LAUGH

-Well, I'm still looking for our own home!

-What?

We sold ours last May, our home.

We're living in rented accommodation at the moment, so we need to find somewhere to live!

-Oh, wow!

-We could do with doing that.

If not, we'll find another one and do it again.

-Congratulations.

-Thank you very much.

-Thank you.

-Look forward to seeing how you get on.

-BOTH LAUGH

So, have Martin and Diane solved the prickly problem

of the subsidence in this property?

Are they making the right decisions? I think they probably are.

Still, once you start digging down, you don't know what you might find.

You can find out later in the show.

They say time is a great healer, but it can also be an enemy if you're up against a deadline.

-What has happened to those properties?

-It's time to find out.

'Back to the Dorset conservation village of Charlton Marshall.

'This semi-detached property used to be a clubhouse for labourers.

'The club room at the front was huge, but housed a bouncy mezzanine.

'Friends Phil and Natalie bought it for £210,000

'as a joint development project.'

Guys, do you think this is going to work well as a team effort?

Yeah. It'll be fine.

Yeah, we tend to think quite similarly.

It might not be exactly the same plans, but the ideas that we're trying to achieve are very similar.

On the colour coordination, I'll definitely be backing down.

LAUGHING: If you saw my house, you'd know why.

'But it's not Phil's house we're here to see.

'One year, ten and a half months later,

'this former labourers' clubhouse has certainly had some hard graft put into it.

'Look at what Natalie and Phil have achieved at the back!

'The former sitting room has been opened up into a beautiful kitchen.

'I love the central island,

'the lighting and quality fittings down both sides.

'The layout change really works, as Natalie explains.'

In here, it was just a sitting room and a toilet and a hallway.

We knocked down all the walls, made it into one big kitchen.

There was a window there that got changed into sliding patio doors.

The kitchen floor will continue outside into a little patio.

The kitchen cabinets and work tops came from different places

to try and get a higher quality kitchen at a cheaper price.

And I'm really pleased with how it's turned out.

'There's a utility room and cloakroom next to the kitchen,

'in what was the original kitchen area.

'At the front, I'm delighted that the former meeting room

'has managed to retain that wonderful open space.

'Natalie and Phil removed the bouncy mezzanine

'and created an entirely new and full first floor.

'There are now three bedrooms at the front of the house,

'two with en suites.

'One of the former rear bedrooms is now this wonderful luxury bathroom.

'The other rear bedroom and former bathroom

'are now this magnificent master bedroom,

'with its own en suite and exposed timbers, as Phil explains.'

This room's the master bedroom,

probably my favourite room in the place.

The old bedroom was only about a third the size

and had built-in cupboards.

We ripped them out.

That revealed a chimney and fireplace,

which we wanted to keep on show.

We used all the floorboards that we found throughout the house

and relaid all that.

We put an en suite to it as well.

When it came together, it's my favourite room in the house.

'This property really has come together well.

'Every bit of space has been utilised.

'There's even another room in the attic,

'although it can't be classified as a bedroom

'as it doesn't meet building regulations.

'They would require a fire door to replace the internal oak door,

'which they prefer to keep, as they've used oak throughout.

'So were there any problems with the planners?'

We had a couple of issues with planning for windows cos it's in the conservation area.

They were just worried about what we were going to do to the house.

I think we've kept as much character as possible.

We spent a lot of time ageing things and trying to make it look older.

I'm hoping that the flagstone floor, when we clean it up,

will epitomise that when we come in.

'Phil wasn't surprised they hit problems with a property this age.

'Part of the kitchen floor was rotten, so had to be replaced.

'And there was woodworm to treat.

'There were jobs for specialists,

'but Phil roped in his paintball centre staff whenever he could.'

We'd find we finished a function at half three, four o'clock,

and four of us coming down for an hour,

it was amazing what we could achieve.

'They've ended up with a fabulous property, but how much has it cost?

'Did Natalie engineer some savings to their 60 to 70-grand budget?

'Or was it splattered, like one of Phil's paintballs?'

I think, by the time we finish, we'll have spent 115.

We'll find out whether that was worthwhile and, if not, we'll find a new hobby.

'That £115,000 spend on top of the 210 grand they paid at auction

'makes their total investment 325,000.

'Are they still looking to sell?'

There's a good chance we may rent it now.

Some of the lads that work for us are interested in renting it.

Having been involved in it, they've fallen for it.

'Time to hear what two local estate agents think of the conversion

'of this former working men's clubhouse.'

What I particularly like is the size of the kitchen.

It's a large family kitchen-diner. You've got space to eat in there.

I think it's stunning. It really is very impressive.

They've done an amazing conversion of it.

The standard and the quality of the bathroom and the en suite facilities

is particularly high.

'So, positive reactions, there.

'How much could the property let for?'

You'd be looking at about £1,200 to £1,500 per calendar month

on a property like this.

The rental that this would achieve would be between £1,200 and £1,600 per calendar month.

'That's a potential yeild of around 4.5% to 6%.'

That's in the region that we were thinking of.

And the people that were interested in renting

were expecting about 1,600, so, seems to tie up.

'What about the resale value?

'Could it be more than the £325,000 invested here?'

A property of this calibre

should achieve a price of around £395,000.

I would recommend a marketing figure between £375,000 up to £400,000.

'That valuation range would generate a gross profit

'of between 50,000 and 75,000, before taxes and expenses.

'Is that in line with their expectations?'

Er, yes, that will have made it financially worthwhile, wouldn't it?

Yeah, it's again pretty much in the region we were hoping for.

'Well, friends Natalie and Phil have given this property a magical refurbishment.

'Remember, it's their first joint investment project

'and they've made it look pretty easy.'

MUSIC: "Easy" by the Commodores

'Can they see themselves working together again?'

Yeah, I'm sure we'll do another one and I'm sure it'll be just as successful.

-LAUGHING: I'm sure it'll be just as easy.

-Yeah.

'Earlier, we were in Bousteads Grassing near Carlisle,

'where couple Martin and Diane nabbed this three-bed semi

'at the auction for £51,000.

'This is their ninth development,

'so they weren't wearing rose-coloured spectacles when it came to the task ahead.'

Tell me what you plan to do.

There's walls needing removing in the kitchen, built-in cupboards.

The bathroom upstairs, we'll need to move a wall to get a toilet in.

Rewire, replumb, new bathroom, new kitchen.

Redecorate, recarpet and just make good from there.

'They had aimed for a six-month timescale.

'It's eight and a half months on and they've just finished the work.

'We've come back to see what they managed to make of this messy place.

'It looks better the second you step inside,

'especially as a wall is no longer the first thing you're faced with.

'Elsewhere, the living room has been spruced up nicely.

'As for the old dilapidated kitchen and ante or storage room?'

This room has seen quite a lot of work, to be honest.

There used to be a corridor along there, leading outside.

This was a little store cupboard. We knocked these walls through.

Back in the kitchen area, there were built-in cupboards.

Knocked them out. Replastered and replaced plumbing and wiring.

Put the French doors in. Really pleased with it. Looks good.

'That goodness extends to the back garden,

'which was overgrown and under-loved,

'but now boasts a lovely lawn of fresh green grass.

'Martin and Diane have made clever use of the size,

'by making the rear area suitable for parking a couple of cars.

'The main issue was that there was a potential problem with subsidence.'

First of all, we got the guys down to do the borehole, find out what the ground was like.

From that onwards, we contacted a builder.

He got his structural engineer to have a look.

He seemed to be pretty keen that he could concrete them back in. So that's what they've done.

They dug around the foundations, poured in the concrete

and that sorted the subsidence out.

'Subsidence sorted with minimal stress.

'If only the same could be said for the rest of the project!'

-The biggest problem was...

-The whole thing!

-Yeah.

To be honest, we did discover it was one thing after another.

There was no damp course in the concrete floor so we had to do that.

The concrete paths outside were lying on the damp course.

We had to knock them up and redo them.

These walls are load-bearing so, basically, putting lintels in,

we had to take the joists out above, which meant we had to take the upstairs walls out as well.

'Ah! The upstairs! Three bedrooms and one peculiarly plumbed bathroom.

'I really do mean a BATHroom, as it had a sink, a bath and no loo.

'But now!'

MUSIC: "Make It Good" by A1

There's been a lot of changes.

All the internal walls have been moved.

For the main reason, there was no toilet in the bathroom.

We had to put a toilet in, obviously.

We stole a bit off the back bedroom and the front bedroom to make the bathroom the size it is.

We're really pleased with it all. It looks really good.

End result's fantastic.

'They've done a great job, but with the volume of work

'added to the volume of problems they've had to deal with,

'were they able to keep within their £19,000 budget?'

Moneywise, it's just been very tight.

Um... Obviously, we had...

I don't know. Did we...? Sorry. Did we have a budget?

'You sure did. Martin?'

We're looking in the region of about 27,000.

It has cost us more, but we've done more than we anticipated.

We spent a lot more in the garden.

We did spend more, but we've got a lot better house than we anticipated.

'And not just here.

'The couple have also, at last, purchased a property for themselves

'and their two girls.'

If we do another one, it'll be a long time away!

Yeah. It'll be a flat, something easy!

We'll concentrate on our own and the girls, then maybe think about doing another one.

'They can't focus on their own house until they decide what to do with this one, though.

'They tend to opt for rental, but are torn between that and selling this one.

'Adding the £51,000 they paid for the property

'to the £27,000 outlay on the work, they've spent a total of £78,000.

'We invited two local estate agents to look around

'and give us their thoughts.'

My first thoughts are that it's a really good finish throughout.

Nice layout with the dining-kitchen, the downstairs toilet,

which is great for families, so it would suit lots of buyers.

It's a very high-quality finish. There's literally nothing to do.

People can walk in, put their sofa in and make a cup of tea.

'But before we start putting the kettle on and feet up,

'we've got to talk prices.

'If Martin and Diane chose to let it, as they usually prefer,

'what would be their estimated rental returns?'

The property would let well, especially with three bedrooms.

Three bedrooms are more in demand and you would expect to achieve around £450 per calendar month.

For a property like this in this area, you'd be looking in the region of £450 per calendar month.

We'd expect a little bit more. We'd be marketing at 495, at least.

'With the total outlay here being 78,000,

'a £450 per calendar month rental

'would mean a healthy yield of nearly 7%.

'But what if they decide to sell instead?'

I would value this property at £110,000.

I would market this property at around £129,000.

-Yeah.

-Values are really good. Bit of a discrepancy between the two.

But, yeah, it's kind of what we were expecting.

'A pre-tax profit of between £32,000 and £51,000 could be very tempting.

'But with this one costing more and taking longer than expected,

'has this put them off, or will they be tempted to renovate in future?'

We'll keep looking, but... LAUGHS

-At the moment, you know, we'll have a bit of a rest.

-Yeah.

That's it for now. We'll be back next time with more action from auction rooms around the country.

-Make sure you're watching Homes Under The Hammer.

-See you then.

-Goodbye.

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