Episode 64 Homes Under the Hammer

-Welcome to the programme.

-It's difficult to judge

what's happening in the property market

-and you shouldn't really trust what you read or hear.

-Mmm.

One way to see how the market is performing

is to go along to your local property auction.

A huge amount of properties sell under the hammer

so why not pop to your local auction just to see what's on offer?

You might be surprised by some of the prices.

So here's what got the bidders going on today's programme.

In the Cowgate area of Newcastle,

there are two flats that leave me... Well, quite rarely lost for words.

Mmm-hmm.

In Tooting, South London,

is there or isn't there something to fire my imagination?

Come on.

Oooh! There is.

And in Hanley, Stoke-on-Trent,

this end terrace has made a big impression on me.

But in terms of space, yeah, it really is huge.

All these properties have been sold at auction.

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

when they went under the hammer.

Your lot, sir, well done.

Welcome to Tyneside.

On the south bank of the River Tyne is Gateshead,

whilst across the Millennium Bridge is Newcastle.

Both have undergone major metamorphoses,

becoming famous for their iconic architecture,

reflecting not only their industrial past but also their cultural future.

I'm heading for Cowgate,

which lies three miles west of Newcastle's city centre.

Cowgate has really good transport links,

which is usually good news for developers.

However, there doesn't appear to be a lot of developing going on around here.

I'm here to see a pair of two-bedroom flats guided at £25,000.

Yup, that's right, two flats for 25 grand.

Ah, some fairly serious temporary security measures

have been put in place.

Judging by the damage to the lock and things,

I think there might be a reason for that.

Let's see what the flat has to offer.

Well, the downstairs one, anyway.

Through a little entrance area there into your living room.

But it's not a bad sized space. Clearly in need of some...

Well, repainting, replastering, whatever you want to call it.

But it's half decent in terms of size. This is your main living area.

What on earth is going on with that?

Yeah, the...

Whatever it is that's on the walls coming off in a very strange way.

That's quite an interesting pattern, actually.

But through here into the kitchen area and this space here,

your kitchen, it's not a bad size.

I mean, all in all, it's a reasonable sized property.

But, again, it looks like all the windows, front and back,

have been smashed and the doors and things like...

well, pipes removed and electric cables.

-OK.

-HE CHUCKLES

Well, somebody's done a lot of the work you'd have to do anyway for you.

Mmm-hmm.

# Sometimes silence

# Says it all... #

Down the hall, off the living room, are the bathroom

and two bedrooms - all in need of cosmetic refurbishment.

All the signs are that security is going to be a problem during renovations

so making the place secure would be a priority.

Leaving anything valuable on site will be an issue too,

as you can remove tools overnight but materials not so easily.

Upstairs, the second flat has a similar layout

and, overall, it's in a sad and sorry state.

A plus point is the garden.

Yes, it may be overgrown but with a little work,

it could be a very nice feature

and attract potential purchasers and tenants.

Well, it's clear that this property has been through the wars in recent times

and maybe this isn't the most salubrious of areas,

but that shouldn't necessarily put you off.

You're getting a lot of property for the money and, in some instances,

the local council will actually support the conversion of property

that are in this kind of state back into habitable places.

But you also do need to be realistic

and maybe need to take extra precautions,

particularly when it comes to security.

No-one knows the property market in this area better than a local estate agent.

So let's ask one for his opinion on Cowgate

and these two flats

with their combined guide price of £25,000.

Well, the area itself used to be

quite a thriving area.

Unfortunately, recently, it has got a lot of vacant properties.

It brings the area down. There's a lot of boarded-up properties

and until that issue is addressed, then, you know,

the property market in this area can't actually grow.

Some councils do offer grants and loans to help improve housing stock

which not only makes decent homes available for rent

but can also kick-start the housing market.

How much could this pair of flats achieve if sold?

If I was going to resell the property...

I wouldn't recommend it at this moment in time due to,

unfortunately, there has been quite a few repossessions in the area,

down-valuing this specific location.

So I would recommend an asking price

of around £55,000 to £65,000 for the pair.

-And rental?

-It will be a housing benefit/DSS tenant.

At the end of the day, it's guaranteed money.

Bearing that in mind,

you're looking at around £350 per calendar month per flat.

Well, intrinsically, there's nothing wrong with this property,

however, it obviously does come with some ancillary issues

which you need to factor into your decision-making process.

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

Do I have a bid of 25 anywhere?

20,000? 20,000 bid.

One bid of £20,000.

Do I have 21 anywhere else?

Second row at £20,000. Is that a bid?

Yes? 21 bid. 22?

22 bid. 23?

No? £22,000, the gentleman sitting on the second row at 22,000.

I'll take 500. 22,500 bid. 23?

23 bid. 23,500?

23,500 bid. 24?

24 bid.

24,500? This gentleman here at 24,000. 24,500 bid.

25? 25 bid.

25,500.

I've got the gentleman at £25,000. I'm selling it once.

This is your last chance. I'll take 250.

I'm selling at 25,000.

I'm selling it once at 25,

I'm selling for the second time at £25,000.

The successful bidder was Andrew.

Although the hammer fell on his bid of 25,000, after the auction,

he ended up paying £30,000 for both flats,

due to a misunderstanding between the auction house and the vendor

over the reserve price.

Andrew was offered the chance to withdraw from the purchase

but decided to go ahead.

Andrew is a financial adviser and mortgage broker.

He and a silent partner have purchased both properties

and hope it will be the beginning of a burgeoning portfolio.

-Andrew, great to meet you.

-Hi, Martin.

-Congratulations.

-Sort of.

No, it's good. I mean, yeah, I needs a bit of work, but, hey.

-Tell me why you wanted to buy it.

-Price.

-Just that?

We did a little bit of research. From a council point of view as well,

there's grants available,

and also there's loans available as well on the property to be able to,

obviously, to renovate the property

and there's also a leaseback option to the council,

which could be very favourable in those sort of terms.

Tell me more about the incentives offered by the council.

Yeah, there's an incentive of a low-cost loan

up to ten years, I think it is, on the repayment basis,

which obviously would save borrowing costs, additional borrowing costs.

And obviously a grant on completion and the leaseback option.

If Andrew decides to go down the leaseback road,

that could be a relatively headache-free arrangement.

It would mean the council would house their tenants in the flat

and assume responsibility for the renovated properties.

I'd be foolish not to look at the council option for a five, ten-year lease.

-Yeah.

-I think it makes sense.

And it's also providing housing to somebody who needs it so...

-And their worry as well.

-Council's worry, yeah.

We're not thinking six months down the line, "It's wrecked again,"

new tenants, more money out.

If they wreck it, then the council look after it

and everyone's a winner.

It seems as though Andrew has done plenty of research

and the council incentives certainly seem impressive

for enticing property developers into the local market.

What do you do? What's your background?

-I'm a financial adviser, predominantly a mortgage broker.

-Ah.

-Right.

-It's very quiet at the moment.

-You're kidding?

Banks not lending, that sort of thing.

So we thought, "Well, why not? "We'll give it a go."

So what you going to do, then, to sort it out?

Phew. The question is what AREN'T we going to do to sort it out, I think, Martin.

-I've been in worse, honestly.

-Seriously?

-Yeah, really.

Well, I bought it, in effect, blind.

Fatal mistake I know, but for the price, I thought worth the risk.

Um... We're going to gut it, we're going to basically...

Doorframes out...

..what's left of the kitchen out.

But, yeah, start from scratch,

replaster where it needs replastering,

all-new woodwork, new kitchen, new bathroom, floor and carpets,

decor, windows, door...

I think that's the whole house apart from building it.

Andrew will employ a team of tradesmen to carry out the work

and has a combined budget of £16,000 for both flats.

He's keen to get the properties ready for tenants as quickly as possible.

-So what's the timescale?

-Five weeks, maximum.

-Oooh, gosh.

-Five weeks.

-That's what we're going to try and achieve.

-And after this, the plans?

Well, if this one goes well... There's a few worries.

I think firstly the main worry is,

whilst we're doing the renovation works,

that we're going to get broken into, things stolen.

I think the shutters being on the windows and the doors,

I think they will stay on until literally as late as possible,

just to stop people obviously coming in

and ruining the works that have been carried out.

And it sounds like you're being very stoical about it all

-and quite realistic about the challenges ahead, if you like.

-Yeah.

Which are unfortunate challenges,

because you've got enough on your plate

without having to worry about people coming in and taking stuff once you've done the work.

It's like anything - there's pros and cons in everything you do in life

and I think the pros of this project far outweigh the possibilities

of any dangers or any problems that may occur.

-Well, listen, congratulations.

-Thank you.

-Good luck with it.

Luck might be a good thing!

-And we look forward to seeing how you get on.

-Thank you, Martin. Pleasure.

Well, it seems that Andrew is fully aware of the challenges that lie ahead.

How is he going to get on? You can find out later in the show.

Sometimes up-and-coming areas are really a long way from it,

but sometimes they really do live up to expectations,

and, in my opinion, Tooting is one of them.

Sitting comfortably between beautiful Balham and wonderfully wealthy Wimbledon,

Tooting has got excellent transport, nice housing stock

and since it's in Wandsworth, the cheapest council tax in the country.

So save those pennies in tax and spend them on property, I say.

The neighbouring areas are pricing a lot of purchasers out of the market

so Tooting suddenly becomes a desirable but, more importantly,

financially viable option.

The property I'm here to see is a short stroll from the main transport links.

"How short?" I hear you ask.

Well, three minutes.

How is that for a commute from the station?

OK, so it's Tooting rail station rather than the tube, but,

come on, that is not bad.

And considering it's less than a 30-minute journey

into the centre of London, in theory,

you could get from bed to desk in around an hour.

Anyway, this is the property that makes that dream possible.

It's a ground floor flat which had a guide price of 170,000.

So far, not just a promising location -

the flat still has its original front door, which can be a good sign.

It might mean loads of original features.

Wow, fantastic ceiling height.

Gives you the illusion of so much space

and look at this funny little doorway here.

When these were originally built,

they were put in in case you wanted to link to the next-door property

for extended family, perhaps.

But cover that up, block that over and you'll never know it's there.

A great reception room. That really is a wonderful size.

This property is described as a three-roomed flat,

not including the kitchen and bathroom.

If all the rooms are as well-proportioned as this,

it's going to be great.

Now, I'm guessing this is the bedroom.

Once you've taken all these cupboards out - and there are loads of them -

you'd have a room that's a really good size.

But what do you think is behind here? Oh, I can't wait.

There might be another fireplace, the same as next door.

Shall we have a little look? Come on.

Oh, there is. Look at that!

Absolutely stunning.

Years and years of dust, but that is beautiful. What a treat.

That has probably been boarded up for many years.

Whoever takes this on is going to love finding that.

But a great property and a really, really good start.

Next door to the bedroom is the bathroom.

Well, shower room, actually. And its charms are bit more well hidden.

Not having a bath can be a deal breaker

so I'd think about fitting a bath with a shower over it.

Now, they do say third time lucky, but I'm not sure that holds here.

At the back of the flat is the third room in this property,

but what is it?

It could be either a dining room or second bedroom

and certainly needs some redecoration.

Every ceiling seems to have those polystyrene tiles

and they just have to go.

But tantalisingly, there could be another great fireplace

hidden behind that storage heater.

I suppose this might be a dining room as it leads to the kitchen,

but that would mean there's just one bedroom. Hmm.

However, there's one last hidden charm - a garden.

Fantastic.

This garden could be a real asset once tidied up.

It also opens up another possibility -

putting a French window at the back or on the side return,

subject to freeholder consent, of course.

As a developer, though,

I'd think about how to use the space already there,

without needlessly spending cash.

It's possibly the back room off the kitchen could become the living room

and the two rooms at the front of the house could be spacious bedrooms.

That would keep any costly structural changes to a minimum.

So with two-bed flats around here going for about 280,000 -

ker-ching!

You don't have to be a genius to work out that this flat,

it really adds up.

Say you bought it for around the guide price of 170,000,

spent 30,000 doing it up, you'd walk away, before tax and expenses,

with 80 grand in profit.

If only they were all that easy.

We invited a local estate agent along to see

if he agreed about the potential profits here.

First impressions of the flat -

obviously it needs quite a bit of work to the property.

I'd say the layout is very good, just needs to be updated.

I think you'd be looking at quite a good sale

once the property is done up.

Once renovated, how much could this property sell on for?

With the property being fully refurbished,

I'd say you'd probably be looking at putting it on the market for about 300,000.

You're likely to receive offers of about £10,000 to £15,000

beneath the asking price.

And rental?

With it being refurbished, you'd more than likely be looking at

putting the property on for about £1,200 to £1,300 per calendar month.

Tooting is a top place to put your pennies, if you ask me,

and this flat, it adds up in every which way.

Let's see who agreed at the auction.

Who'd like to kick off on this?

I don't know - 175?

175 down here.

180.

185. 190. 195.

200, sir. 196, 197.

198. 199. 200.

201. 202. 203.

204. 203, back to here.

204. 204. 205.

Well, this is certainly a hot property.

The bidding is fast and furious.

We pick it up again at 230,000.

230. 231.

232. 233.

234.

235. 236.

237. 238.

239. 240.

239, first time, second time,

third and last time, if you're all done...

That successful bid of 239,000 -

69 grand over the guide price -

came from husband and wife Gary and Pam.

Both used to work in banking but as they've now retired

they've decided the place to put their cash is property.

So if anyone knows about financial dealings, it should be them.

Lovely to meet you both today.

Interestingly, you went a fair bit over the guide price on auction day, didn't you?

Yeah, we'd actually set an upper limit that we were prepared to go to

-and we were just under it...

-Brilliant.

..so literally another thousand or two

and we would have counted ourselves out.

Are you guys currently working as well as doing this or is this your main job now?

No, this is our main job.

We both used to work in the finance sector

but we took retirement at different times in the last five years

so this is now more of a hobby for us.

So your reason for buying this property?

Well, it was really because we had some money that was not doing

very much in the bank and it was a project

we have been looking for for the last nine or ten months,

and so we decided that this was the better place to put the money and...

Keep me out of the pub.

LAUGHTER I like it!

# They're calling out Last orders at the bar... #

It's last orders for Gary.

I wonder if that was under orders from Pam.

Will she be the boss when it comes to this renovation?

So, how does it work with you two? Is it perfect, harmonious teamwork?

-If we are in separate rooms.

-SHE LAUGHS

It's teamwork. It's not always harmonious, because sometimes we'll have

disagreements about what we want to do or what job needs to be done

next, but generally it all works out and there's not too many

slammed doors or tools thrown down in frustration.

Only by me, occasionally.

I think at the end of the day Gary usually realises that I'm right in what I'm saying, so...

-THEY LAUGH

-Yes.

Save the arguments, and just do it my way.

So what about the internal space in the flat?

-It does sort of go on and on forever, doesn't it?

-It does rather.

Yes, it's a nice large flat,

and clearly there is a lot of work that needs to be done,

but we're not looking to change the room layouts at all,

except maybe block up the door into the garden

and put French windows in place of the door there.

What about the bathroom, are you going to change that?

Thinking about that, to be honest,

I think we could probably leave it as is. It's not that old.

With a good cleanup I think it will come up quite nice, actually.

These days, most people are not that bothered about a bath,

they are quite happy with a shower anyhow.

Would you like to live somewhere without a bath?

-I'm a bath person, so the answer to that is no.

-Me too.

-What about you, Gary?

-I'm a shower person.

-Not a bath?

Would you not ever fancy laying in a bath?

-No.

-And what about the fireplaces?

They are a fabulous find, they really are.

How exciting to find that other fireplace behind that piece of old board.

-It's fantastic, isn't it?

-It is, exactly.

So, quite looking forward to sort of sprucing all that up and seeing

how that comes up, but it's quite surprising for a property like this

to find such an elaborate fireplace, so I'm quite pleased about that. Usually they are little bit plainer.

Well, I can't wait to see what you do there.

My big question to you is, do you think... SHE KNOCKS ON WALL

there might be one behind there?

I suspect it's the old hearth, the open hearth,

and it's just been boarded over, so I'm afraid if there is

a fireplace there, it's just going to be very utilitarian

and kind of brick or block, so we'll have to wait and see.

The couple have a four-month timescale,

and once the renovations are complete,

depending on the market they'll decide whether to sell or let it.

So, am I right in saying you're going to be on the money, you two?

We are looking at probably a budget of about around the 15,000 mark.

I think the work that needs to be done here,

certainly the windows need replacing, need to look at the electrics.

Also central heating. At the moment it's storage heaters.

And obviously a new kitchen. So they are the main expenditure areas.

The rest of it hopefully is just decor.

Of course, we just need to be wary that

once we take all those off exactly what might be lurking underneath.

They are everywhere! Everywhere!

So, that's Gary's first job, is to take all those down.

Oh, you're going to get neck ache, Gary. You really are!

Well, guys, I'm really looking forward to seeing the outcome here.

I can't wait to see what it's like. Good luck with this project.

-Thank you.

-We'll be back to check up on you.

-Thanks very much.

-Thank you.

-Well done.

Even for the price they paid, this is still a good buy for Pamela and Gary.

I'm looking forward to seeing this flat brought back to life,

and find out if there is going to be another fireplace, will they keep or sell, and will there be a bath?

I do hope so. You can find out how it all goes later on in the show.

Coming up in Stoke-on-Trent,

what you see is not necessarily all you get.

It's a very small garden, but all is not lost.

In Tooting, South London,

we find out if this husband-and-wife team turned the air blue.

Some debate about colours

but I think that we've struck the right tone.

But first it's back to Newcastle to see

if property development means a change is as good as a rest.

-HE SIGHS

-I'm considering having a break for a while, I know that.

Welcome back to Newcastle, and the area of Cowgate.

The auction lot I viewed was boarded up on the outside

and broken down on the inside.

The property consisted of a pair of two-bedroomed flats, and it was

purchased for £30,000 by financial adviser and mortgage broker, Andrew.

With the backing of a silent partner,

Andrew was diversifying by building a rental property portfolio.

Financial adviser and mortgage broker -

must have been tough few years for you.

Very tough. So, hanging on by a thread I think is the term.

We are returning just over two months later to find out

if his first step on the buy-to-let property ladder has been a success.

Well, that lawnmower has been busy all right -

what an incredible transformation.

Never mind first steps, it looks like Andrew has taken giant leaps.

But will I be as impressed by the transformation inside?

Let's take a look at the ground floor flat.

# Take the first step The hardest to take

# Breaking away

# Take the first step Whatever it takes

# All the way

# You're already there... #

Although there are a few finishing touches still to be applied,

an amazing amount of work has been done.

It's been a bigger job than I thought.

There's been a bit of a culture shock from sitting behind a desk and organising mortgages,

and obviously the challenges that go with that.

A totally and utterly different set of challenges with doing this type of work.

His greatest challenge was organising the tradespeople

to carry out the work, including plastering all the walls and ceilings,

fitting new architrave and skirting,

electrical rewiring and installing the new plumbing and central heating system.

We've tried to make it look as high-spec is possible,

and there is high-spec stuff that's actually gone into the project,

but a little bit of bargaining and a little bit of shopping around,

and we've managed to get basically some really high-spec stuff at a fraction of the cost.

The back garden was under-tended and overgrown.

It is now a safe and secure place for perhaps either children to play

or adults to enjoy a barbecue.

But it was no easy task.

Underneath the tumultuous amount of nettles and everything else

there was a half-demolished pond,

there was asbestos tiles, there was plenty of unsavoury things,

which I don't really want to go into.

But there was a lot of things there which,

let's say shouldn't be in a garden.

Which meant that there was a big clearing up job to do,

which obviously took a lot longer than we anticipated.

Let's take a peek at the flat upstairs.

Andrew's bargain-hunting has reaped rewards in the kitchen.

And also in the bathroom,

where he's fitted an integrated spa shower and bath,

purchased for just £150 from a website,

which he feels adds a touch of luxury.

These flats are destined for the rental market,

and Andrew has been taking advantage of council incentives

to regenerate properties which have been abandoned such as this.

The council have been fantastic.

I'm making use of their tenant finding service as well.

They also offer a grant. Well, that's been approved, that's the good news.

And £2,000 each property will be coming back.

Soon, hopefully!

Andrew has gone a couple of weeks over his five-week schedule.

He had hoped to spend £16,000 renovating both flats,

but he has spent just under 25,000, which, when added to

the purchase price of 30,000, makes his total investment £55,000.

So, was it money well spent?

We asked to local estate agents to give us their opinion on the flats.

The flats have been refurbished to a very high standard,

and they've both got modern bathroom suites.

The upstairs is particularly nice with the spa shower in it,

which will appeal to both buyers and people looking to rent.

It could be said that the purchaser of the property has put

a lot of money into the property for tenanting purposes.

It's brought the standard of the property up a lot.

This one is brilliant. Absolutely brilliant.

Bearing in mind Andrew's total investment so far of 55,000,

how much could these flats achieve if sold?

I would market the ground floor flat at £35,000,

and the upstairs flat at £40,000.

If I was to put these flats on the market,

I would value each flat at a valuation of £35,000 to £40,000.

Those valuations, if achieved, would give Andrew and his silent partner

a potential pre-tax profit of between 15 and £25,000

minus the usual selling expenses, of course.

But his first preference is to let the properties.

I would expect to achieve £350 per calendar month per each flat.

Potentially with the high specification, though,

there could be a possibility that £375 per calendar month could be achieved.

The rental market within the Cowgate area is very strong.

These flats have been done to such a high standard that you could

achieve between £375 per calendar month to £400 per calendar month.

By working with the local council,

Andrew believes he can do better than those figures.

I've been advised that £450 per calendar month for each flat would be achievable.

And at that sort of yield for that sort of money,

you'd be hard pressed to find a better investment anywhere.

Since filming, Andrew has in fact sold the ground floor flat

for £58,500.

The upper flat is under offer at the same amount,

so is he considering a return to the auctions?

-HE SIGHS

-I'm considering having a break for a while, I know that!

Yeah, I'd take maybe another one or two on,

and hopefully achieve a similar sort of goal.

Today I'm in Hanley in Stoke-on-Trent.

Amongst other things, this was the home of Reginald Mitchell,

whose statue is here outside the Potteries Museum And Art Gallery.

In case you don't know, Reginald Mitchell was the man who designed one of the most

significant and important aircraft in the history of the world ever -

The Spitfire.

And so, will today's property be a high flyer?

# Straighten up and fly right

# Cool down, papa Don't you blow your top... #

There's only one way to find out.

Well, just a short walk from the centre is the property I'm here to see.

It's a two-bedroomed end of terrace, which had a guide price of 35,000 quid.

Now, for that, you are going to expect something pretty modest, aren't you?

Well, you'd be wrong.

Because, it is huge.

# It's not my imagination I got a big, big love for you... #

This end-of-terrace certainly seems fantastic value from the outside.

This is a lot of property for not a lot of money.

The fact the house is in this elevated position is a really

nice start, because it gives some nice views out of the window

and quite big windows they are, too.

But through the front door into this, your first room,

your living room. It looks like in half decent condition.

Open fire there which is a bit of a feature.

And then through to your rear living room area.

Again, it looks like it's been relatively recently decorated.

Flooring needs sorting out, but the space is good,

and it gets better, because continuing back, you come to the kitchen.

This is tired and dated and needs to be replaced,

but at least you've got a reasonable amount of space.

I would consider taking out some of these walls, though,

because it makes it a little bit cramped, because it just carries on going back and back.

You've got this utility area here, and then right at the very rear of the property, your bathroom and loo.

It's the only one in the house,

and it's quite a trek from anywhere to get to it.

But in terms of space, yeah, it really is huge.

# Well, there's a great big moon above

# Well, honey, I got A big, big love. #

Yes, I'm very taken with the proportions here, but not quite

so keen on the Artex, which seems to cover every wall and ceiling.

Up some fairly narrow stairs there are two good-sized double bedrooms.

One overlooks the front of the property,

and the other overlooks the back.

But remember, there is no bathroom up here, and unfortunately

the space diminishes the minute you step outside the back door.

Well, at the rear of the property, there is this area here.

Now, it's largely taken up with this extension,

so, as a result, it's a very small garden.

But all is not lost, because...

Just opposite the house is a really lovely park.

# I'm in a wide open space I'm staring

# There's something quite bizarre I cannot see... #

With its great location, plenty of inside space

and guide price of 35,000, it's time to hear what a local

estate agent thinks about this place.

First impressions of the property, general modernisation is required.

The kitchen, the bathroom, the windows.

Depending on whether it's going to be a rental property or resale

property, will have an impact on the type of works that are carried out.

There's quite a large extension to the rear,

which is slightly unusual for this type of property.

With this much space, it sounds like this could be a good buy.

After renovation, I would anticipate a resale value in the region of £70,000.

So, if you're careful with your pennies in the renovation,

there's definitely money to be made here.

The rental income would be in the region of £400 to £450 per calendar month.

Based on those figures, that rental income could give you a very healthy yield of around 10%.

Well, back to the park for a bit of contemplation,

and I think this is a really good property to go for.

Solid house, good rental yield - it's a no-brainer.

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

Lot 76 is an end terrace house convenient for the city centre.

What's this? 25,000 to start on this one. 25 bid.

Thank you, at £25,000 looking for 26 now.

£26,000. £27,000.

28? £28,000.

£29,000.

500 you're saying. 29-and-a-half. 30.

New bidder, 30-and-a-half.

31. 31-and-a-half.

32. 32-and-a-half.

33. 33-and-a-half.

34? 34.

34-and-a-half. 35.

35-and-a-half.

36. 36-and-a-half.

37. 37-and-a-half.

38. 38-and-a-half.

39. 39-and-a-half.

£39,500, then, first time. 39,500, second time.

Third and final time, 39,500, your lot, sir. Well done.

Along with his business partner David,

financial adviser Neil made that winning bid of 39,500,

£4,500 over the guide price.

David and Neil are not just business partners,

they are related through marriage, too. But more of that later.

They have combined forces with Neil's wife, Trisha, in this,

their fifth property together.

-Neil, David, great to meet you both.

-Nice to meet you.

-Morning.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

-Er, it was a good price.

That's always a good start. Nice area, lovely views over the park.

Close to Hanley town centre,

so everything a young family is probably likely to need.

Right. Are you from the area?

-No, I'm from Birmingham.

-I'm from mid-Wales.

Right, so, what attracted you into the Stoke-on-Trent area?

It's really the rental value in relation to the property value.

How do you get on with the long-distance managing of property?

-It's easy, I don't do any of it.

-LAUGHER

I just seem to spend a lot of time in the car, that's all.

And who's going to do the work?

-Er, I shall be doing various bits and pieces.

-THEY LAUGH

I've got various contractors coming in to look at things.

As you say, technical side will be left to the people that know.

The simple stuff will be left to myself.

So, tell me about your partnership. What do you both do? Is this your full-time jobs?

-It's his full-time job, and not me.

-Right.

-I'm a financial adviser.

-OK.

So, I do research for the properties we buy at weekends and evenings.

My wife runs the administration of the business,

and David is project manager looking after the specific properties that we buy.

Right. And how does it work financially between you?

-Is it a joint venture between you all?

-It's a joint venture.

We share the profits. We bought five houses in the last two months now.

-Oh, my goodness!

-So those are in various stages of being ready.

They'll go on the market and hopefully they'll sell some and keep some.

-You seem to be doing most of the work, David.

-Yes.

It's nice to get your hands dirty now and again, yes.

And how does it work financially?

Well, I'm on salary, and as you say I get remunerated each month, so that sorts me out.

And your background? Do you have much skills in this kind of field?

Well, basically I've done a lot of house renovation in the past,

various different types, and also previously I was a quantity surveyor.

A quantity surveyor and a financial adviser -

there can't be many problems too big for this pair to tackle.

So, how did the relationship begin, the business relationship?

Well, basically, my wife and Neil's wife, they are both sisters.

Oh, right! So, does that make you brothers-in-law, then?

Trisha, Neil's wife, is my sister-in-law,

but that can't make Neil my brother-in-law through marriage.

-So, what does that make your relationship, actually?

-Friends.

-I'm friends with his wife.

-THEY LAUGH

Well, that's, umm, sorted then... sort of.

But, whatever the family connections,

these two are well-equipped with the skills to get this job done.

So, what are the plans for it, then?

What are you going to do to sort it out?

Basically, it's going to be new kitchen, new bathroom,

check the electrics, check the damp.

Redecorate inside and basically bring it up to 21st century.

So, what's the budget for the work?

We're looking somewhere between £10,000 and £11,000,

maybe 1,000 for contingency.

And timescale?

Roughly around about eight to ten weeks.

So, what's the plan for this one? Is it to sell it or to rent it out?

We're hoping to sell it.

We're looking for an investor to take it over as soon as

we've finished with it, have it already tenanted,

so it's a nice investment property.

Are you not tempted to keep it?

We are tempted,

and it really depends on if we get an offer at the right price,

then we'll sell it, and if we're not happy with any offers we get

then we're quite comfortable renting it out and keeping it.

-Well, congratulations. Good luck with it.

-Thank you.

-Look forward to seeing how you get on.

-Thanks.

Well, it can often be a good idea to go into any property venture

as some kind of a partnership.

It helps mitigate the risk and you've got somebody to go through the whole experience with you.

In this case, though, are they right to be considering selling

when they could get around a 10% yield on this place?

I'm not so sure.

You can find out what they eventually decide to do later in the show.

The seasons have changed, but have the properties changed as well?

Or have they stayed exactly the same?

It's time to go back and find out.

Back in Tooting, South London,

I viewed this two-bedroom ground floor flat.

Now, to the untrained eye, this place was in a right old state.

But if you knew where to look,

this Victorian period property had hidden charm.

Look at that! Absolutely stunning.

It was purchased at auction for 239,000,

by husband and wife, Gary and Pam.

They'd both retired from jobs in finance

and had decided that property was the place to invest their cash.

This renovation was their third project.

So, how does it work with you two?

Is it perfect, harmonious teamwork?

If we're in separate rooms.

THEY LAUGH

It's teamwork, it's not always harmonious,

cos someone times we'll have disagreements about what

we want to do or what job needs to be done next.

But generally it all works out and there's not too many

slammed doors or tools thrown down in frustration.

Just under six months later, we're back.

So, has working hand in hand led to argy-bargy?

I hope not.

I'm sure it's all been lovey-dovey.

Let's take a look inside.

# Oh

# Baby, let me hold your hand

# Baby, let me hold your hand

# Let me hold you real tight

# And I'll love you all right

# Oh, baby, if you hold my hand... #

Have there been temper tantrums or kisses and cuddles?

Actually, we got on quite well working together.

I don't think there's been any arguments at all, this time.

So, yeah,

Generally, we discuss what we're planning for each room

and how we're going to do things and then got on with it, really.

Yes, some debates about colours, about shades,

but I think that we've struck the right tone of nothing too bold

but something slightly different in each room.

Pam and Gary have created two bedrooms at the front of the

property and turned the back room next to the kitchen

into a living room.

And what about those fireplaces?

Well, they've been lovingly restored

and add character to this lovely house.

And I'm delighted to see that Gary's managed to have

a night on the tiles after all.

The couple's clever interior design choices can be seen in the kitchen.

The selection of feature tiles, splashback,

chrome tap and modern sink add style to a somewhat small kitchen.

Well, the kitchen needed a complete refurbishment,

because it was very dated, so we stripped it all out

and then we put a new floor in, because the old floor was uneven.

We also blocked up the door into the garden

and had it all re-plastered and resurfaced and then chose the units

because we wanted something that was rather bright but modern as well

and we put up the kitchen ourselves, apart from putting in the sink

and the hob.

I think most people would like it.

It's bright, it's airy, there's storage space,

but also there's a washing machine in the corner.

It's got all the mod cons that people would expect to see in a flat.

What about that shower room?

Did Gary and Pam change their minds about the bath

in this rather cramped space?

Yes, I'm so glad to see they've managed to get

a bath in as well as a shower.

The overall look is very cool and contemporary.

Well, in the bathroom, originally, there was just a corner shower

and behind it was a cupboard which had the water system.

So, we decided to remove those and move the shower backwards,

which gave a sufficient space, then, to put in a full sized bath.

Finally, following re-plastering in here,

I re-tiled it

and I think it looks rather good.

The couple are just about on schedule, but have exceeded

their £15,000 budget

as they expect to spend 23,000 in total.

This includes a full electrical rewire,

new boiler and central heating system,

new internal doors,

windows and a new doorway leading to the now landscaped garden.

Adding their £23,000 spend

to their £239,000 purchase price,

gives them a total investment of 262,000.

I think Gary and Pam have done a great job.

They have yet to finish, but can be proud of all they've achieved.

Are there any parts they're particularly pleased with?

Pam's work on tidying up the fireplaces,

particularly the one hidden in the bedroom.

That's come up really well and we were keen to keep it

if we could tidy it up and paint it up well

and we had a bit of fun and games with some of the paint,

but eventually we've got the right mix and the right colours,

so I'm really pleased

that we've been able to retain those as original features.

We invited two local estate agents to give us

their opinions on this property.

My first thoughts are, the property's finished pretty well.

I think the kitchen's very impressive.

The items used in the kitchen, for example,

the worktop and general fittings are pretty good.

Likewise, in the bathroom, as well. They're to a high standard.

I think the changes to the property are really good.

They've made good uses of the space, created two double bedrooms,

given the place lots of light.

The garden is also a very good size

and in very good condition, as well.

So, it seems the experts are impressed.

How much could the property achieve on the rental market?

If this property went on the rental market, we would hopefully

achieve between £1,300 per calendar month

to £1,400 per calendar month.

In terms of rental, you'd probably be looking at about

£1,200 to £1,300 per calendar month.

Those figures, if achieved, could give Gary and Pam

a rental yield of between 5% and 6.5%.

But they would prefer to sell the flat.

Bearing in mind their £262,000 investment,

how much do the estate agents reckon it could sell for?

We would value this property between £290,000-£300,000.

If the property were to be marketed for sales,

I would recommend putting a place on the market for £330,000.

Quite a difference in valuations, but those figures could

generate a gross profit of between 28,000 and 68,000.

I have to say, I think 330's over the top.

-We were thinking probably 290, 300...

-300, yeah.

..that we thought the value was.

-So I'm quite pleased...

-We'd be happy with that.

Yeah, very happy with that.

Gary and Pam have spent their summer months toiling over fitting

kitchens and tiling bathrooms.

So, are they happy that their hard work has all paid off?

Yeah, very pleased about it,

but I think ready for a holiday, somewhere on the beach.

Indeed, I haven't had a summer yet.

We're back in Hanley, Stoke-on-Trent, Staffordshire,

to see how family business partners,

Neil and David, got on with that cheap,

though not particularly cheerful, end of terrace house.

I thought this property was a big opportunity

when it sold for only £39,500.

Of course, the two bedroom house was in need of big love.

There were plenty of Artex-removal opportunities

and despite being a decent size,

the only bathroom was downstairs,

through three other rooms

at the very back of the property.

And outside, there was no real garden space to speak of,

although that beautiful park across the road

more than made up for it.

New and enthusiastic property developers, Neil and David,

plan to spend around eight weeks and £10,000 renovating the house.

The only question was, what would they do with it

when it was finished?

So, what's the plan for this one?

Is it to sell it or to rent it out?

We're hoping to sell it.

We're looking for an investor to take it over as soon as

we've finish with it, have it already tenanted,

so it's a nice investment property.

But because of the price we've paid for it,

we can also keep it and rent it out for ourselves.

So we've got two options.

We came back 12 weeks later to find out if it's ready to let

or if it's up for sale.

The tired old windows are now watertight and sparkling

and that old front door has been replaced with a brand-new one.

This house has gone from curbing your enthusiasm

to curb appeal.

And that sad, green sitting room is now

a warm and welcoming living room.

The second sitting room has also been freshened up and carpeted.

But there's much more going on than just plaster and paint on the walls.

Towards the back of the house,

the kitchen has been made much more user-friendly.

Right, well, in here,

the first major job was to take the old units out.

We then decided to leave reconfigure the kitchen,

cutting down the old utility room, so we took down the chimney breast

that was here, partitioned it up,

put the new utility room in.

We then came in, left the sink here,

put the full range of kitchen cupboards in,

retiled and that was it, basically.

Yes, I think it all looks pretty good now.

I couldn't agree more.

The kitchen is now a much more attractive environment to be in.

Even though the bathroom is still at the far end of the house,

it, too, is now a much more inviting space.

Although the cosmetic changes are obvious,

David and Neil have also paid close attention

to the fabric of the building.

Starting at the beginning, we had new damp-proof course inserted and

of course we had new windows, new doors,

all new PVC double glazed.

And, throughout, those textured walls are a distant memory.

Effectively, the whole house was covered in Artex,

so that's walls, ceilings, stairways, bedrooms.

They'd obviously had a job lot of Artex very cheaply

when it was done originally.

Huge problem to take that off.

Not that I know that much about it,

because David was responsible for it.

But it was a question of covering the Artex up and re-plastering,

so that the walls are smooth.

We've left it on the ceilings cos if you try and take it down

from the ceilings you're going to create a bigger problem.

So we've left that up, but it's been repainted and it looks fine.

The secret of successful property developing is to do

what you need to, remembering that if it isn't your own home,

you don't need to reflect your own personal taste.

Anyhow, up the now Artex-free stairs, both double bedrooms are

warm, neutral and welcoming.

And, outside, David and Neil have just one more surprise.

Well, when we first came here, the whole garden was a complete mess,

there was an old kennel there, this was all debris, there was

bushes overgrown in the whole area,

and the tree was absolutely massive, it covered

about five of the neighbours' gardens, so we've trimmed

that back, we have raised the canopy to try and let in more light,

we've pushed the shrubs back, and we tidied the area up,

put one or two new shrubs in, laid some decking,

so that just brightens the area, and as you can see now it catches

the sunlight, so, it's a nice little area just to sit and have an

afternoon cup of tea, or maybe even a glass of wine in the evening.

From top to tail, both inside and outside, newbie property

developers, David and Neil, have turned this house into a home.

They bought it for £39,500, and have spent £14,000 on the

refurbishment, bringing their total outlay to £53,000.

But, was it money well spent?

We asked two local estate agents for their opinions.

The property has been refurbished to a good standard, it's fresh,

clean inside, everything's new, and it's ready to move straight into.

I particularly like the fact that there is a usable outside area,

which, for this type of property isn't particularly normal, and

also there's now a good-sized kitchen,

with a separate utility area.

I like the way that the kitchen

and bathroom have both been done to an immaculate standard,

and I like the way that they have been done to a neutral

standard, as well, which means it'll appeal to a wide range

of buyers, which hopefully will help them on the market side of things.

Speaking of markets,

what do the local property experts think this place is now worth?

I would anticipate a resale value in the region of £75,000.

I'd say achieving sort of £75,000.

Those valuations would give Neil and David a very healthy

profit of 21,500, minus the usual taxes and expenses, of course.

A house just up the road has sold quite recently for a fairly

similar kind of price, so that's what we were hoping for.

I would anticipate a rental income

in the region of £425 per calendar month.

Optimistically, you'd be looking at £450 per calendar month,

but I think you'd be looking more in the region of 425, though.

We're quite happy with that,

our research showed it was going to be something similar,

and we'd based all of our calculations on that,

so yes, we're quite pleased.

Those rental figures would give the team

a very healthy yield of between eight and 10%.

Their keen eye for detail and figures mean these fledgling

property developers are well on their way to success.

But, have this canny pair decided to keep the property, or sell it on?

We like the house, the area, it should rent out easily,

so we want to keep it.

And, brimming with confidence,

they're off on their next development already.

We bought another property fairly recently,

that completed only yesterday, so we will be starting to work

on that quite soon, and yes, we'll be back at auction, next month.

Well, that's it for today's show, we'll have more news

from the auction rooms up and down the country for you next time.

-So, make sure you join us then.

-Goodbye for now.

-Goodbye.

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