Episode 65 Homes Under the Hammer

-Hello and welcome.

-Auctions are very interesting places to buy property.

-Maybe that's why they've become so popular.

-Thousands of lots are sold each year under the hammer.

People who buy regularly at auction know all the tricks of the trade.

One way to make sure you're not inheriting a whole load of problems is to read the legal pack.

Yes, it is better to be safe than sorry, so what got the buyers going on today's programme?

In Staffordshire, I come across something a little different.

It could be a money pit, but it'll be a really interesting property.

In Upminster, Essex, this house is almost ready to rent out.

How often do I say that on this programme? Not often.

Whereas in Barrow-in-Furness in Cumbria, you could make so much more of this bungalow.

Is it worth doing? Up to you.

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

when they went under the hammer.

This is Newcastle-under-Lyme in Staffordshire, home to North Staffordshire University Hospital,

which these days also houses the Keele University Medical School.

That means this is a good location to think about investing in property

as where there are medical students, there's a wealth of tenants.

Well, the property I'm here to see does not disappoint from the outside at all. Just look at it.

Fantastic sort of Gothic style. It's very Addams Family, isn't it?

What could possibly be wrong?

Well, it's an ex-council property, but not in the way you might think.

Yes...it's the cemetery lodge.

# It's so quiet in here

# It's so peaceful in here

# It's so quiet in here It's so peaceful... #

This certainly meets the criteria for those looking for peace and quiet.

Undoubtedly, its position by the cemetery will put some people off, but guided at £100,000 plus,

this is an opportunity to acquire a rather splendid-looking property with a large plot - garden plot!

# It's so quiet in here

# It's so peaceful in here

# It's so quiet in here... #

Despite its quiet location, it's a short walk to the town centre.

Now this building was previously the cemetery administration offices,

so when you walk through the front door, you get that office feeling.

What have we got? Through here a hatchway,

rooms, it all feels very solid. The brick's exposed in certain places.

All these doorways with their mullions, it's all really solid.

But the biggest issue straight away is the fact that it was offices, so it has planning permission for that.

The good news is that it has been applied to be changed and this can now be used as residential.

That's a really good starting point.

The next job...

is just converting it into something you'd want to live in.

It does feel a bit, well, municipal.

The council-style colours and office look does make it feel rather unwelcoming. On the other hand,

you could really use your imagination with this one.

It's not just office space. There's also a kitchen and toilet,

but as the lodge has been unoccupied for a while and there's a defunct boiler, the place has got cold

and it's starting to show signs of damp.

So up a fairly narrow staircase to your three bedrooms.

They're all good sizes. That one there, another through this dogleg, and another one here.

What you haven't got is a toilet or a bathroom,

so clearly that is a) a bit of a surprise and b) a bit of a disappointment,

but it comes back to this not being a house someone was living in.

It's more commercial premises, so maybe it isn't so surprising,

but it has to be addressed. The rooms have really nice, high ceilings.

Small windows. Adds character, doesn't bring in a lot of light. A few nice fireplaces left.

It's... It's going to need work. It could potentially be a money pit,

but it would be a really interesting property when it's done.

# I'm special, so special

# I gotta have some of your attention Give it to me... #

This is a special and unique property and deserves some attention.

I think it needs to be viewed as not just a blank canvas,

but as a blank shell, because it will need a lot of rejigging and moving of internal walls

to make the most of the space here. It's going to cost, but if you've got the brass in your pocket,

I think the end result could be well worth it.

It's not just the house. There's also the land it sits on.

Well, as you might have imagined, the property comes with a really nice plot of land.

This is it. Lots of trees, mature shrubs. It'd be lovely cleared up.

You might actually think perhaps this also does have the potential to be possibly a building plot.

This is where you must read the legal pack. There is a covenant that says specifically

that you can't turn this into anything other than a garden,

so forget about building something. It's not going to happen.

One person likely to have an inkling of what to do with this property given its unusual location

is a local estate agent.

We asked for an opinion on this place,

guided at £100,000 plus.

Sitting on the entrance to the local cemetery, any redevelopment to the property

needs to be in keeping with the setting.

Subject to planning permission, I'd recommend redeveloping the property into a unique

detached family home, keeping the character and original features.

What could it be worth once you've done all that work?

Obviously dependent on the finish and the conversion taken,

I'd be looking to achieve in the region of £225,000 to £275,000.

What about renting it out?

On the rental market, you can look between £750 and £900 per calendar month.

Well, all sorts of properties end up at the auction

and this is certainly one of the more unusual ones.

It's not quite as simple as it seems and a solicitor should check out the legal pack,

but apart from that, I'm sure it got them going when it went under the hammer.

Lot number one. Attractive, Gothic-style detached property.

90,000. Start me at 90.

90 bid. Thank you. At £90,000.

At 100, can I say now? £100,000, seated. 110. Do you want to go 115, sir?

115 standing now.

120. 125.

130. 135 at the front.

Standing. Took it. At the front, 135.

140.

145. 150?

150.

155.

160?

New bidder. 160. At 160. Do you want to go one, sir? 161?

162.

No. Shaking your head. 162, still with you, sir. Seated.

At £162,000 the first time.

At £162,000 for the second time. Third and final time, bid's there.

£162,000. Are we all done? You've bought it, sir. Well done.

So for £162,000, the successful bidders were Jill and Alan.

They're both retired teachers and live 30 minutes away.

I met them at the cemetery lodge to find out their plans for this rather unusual property.

-Jill, Alan, great to meet you both.

-Thank you.

-Congratulations. Interesting property!

-Glad you think so!

-Tell me why you wanted to buy it.

Its location, mainly. When I came to the property for the first time, I just loved the building.

It's certainly unusual. Very grand. So what did you buy it for? What was the driving force?

We are student landlords in the area and we look after a number of students, so we decided

-to expand.

-What got you into student lets?

Many years ago, when our son was going to university, we went to Nottingham to look for property

and some of the ones we saw were just so horrible, you know, that when time came

for us to think about this, we thought, "We'll go for high end.

"We'll go for really nice home from home properties."

They started doing student lets five years ago.

Since then, they've built up a successful business with four other properties

which they maintain and let on 11-month short leases.

The plan is to do the same with this building.

-Why this place?

-It's near to Newcastle. It's literally a 10-15 minute walk to the hospital.

And even if we don't attract medical students, which are the main type of student we have,

it's about a 10-minute bus ride to Keele itself.

Right. But it's a cemetery lodge.

-It's a very quiet location, yes.

-We're going to change the name!

Drop the word "cemetery".

-Call it The Lodge!

-Yes!

-But it's still by the cemetery.

-I think its quirkiness will give it an added attraction.

-OK.

-So what are you planning to do to it, then?

-It's going to be six bedrooms, two en suite.

There will be two main bathrooms, one upstairs, one downstairs,

-and one communal area and a fully-fitted kitchen.

-Right.

-And a utility area.

-What's the kind of budget?

-We've got a figure in mind of £30,000-£40,000.

-Seems realistic.

You know the auction price. We purchased it at 162.

Overall, we're looking around £200,000.

In order to achieve their six student rooms, two en suite,

along with two bathrooms and a fully-fitted kitchen,

they'll gut the house. They'll employ a building team to do the work.

They hope to get it ready for the student rental market in 5 months

and hope for a total monthly rental income of around £2,300.

-Were there any nasty clauses in the purchase contract?

-We had one little bit that was unusual,

in terms of the actual legal document itself that we questioned.

-Really? What was that about?

-It was the wording about the property itself, that if it was resold,

the council had the right to rebuy it at the selling price.

-Which is the price we paid at auction.

-What?!

-20 years' time, how could you possibly have that right?

-So they had to rejig the wording so it was the land itself outside.

-OK.

-The property is different.

-You spotted it and got it changed?

-Oh, yes.

Well done for spotting it.

-So are you excited about it?

-Yes, I am.

-Absolutely.

-Yes, I'm really, really enthused.

I hope it comes to meet your expectations. Good luck with it.

-I look forward to seeing how you get on.

-Thank you.

-Thank you.

Well, clearly Alan and Jill are delighted to have got this place

and they certainly seem to have a potentially lucrative plan for it,

but there's lots of conversion to be done and any more nasties in terms of the legal pack?

Hopefully not. Find out how they get on later in the show.

When buying property, everyone has their own tick list,

the things that are vitally important to them. Each person will have a unique wish list,

a criteria that their chosen property must meet.

Here in Upminster, Essex, transport links are fantastic, there's an Underground and train station,

property values aren't sky high and it's home to a windmill.

Not something on most people's checklist, but it's certainly a local attraction.

Built in 1803, flour was produced here until 1910.

The question is will today's auction lot get me in a spin or just, well, grind me down?

With wind in my sales, I set off in search of today's auction property.

A 20-minute walk or a 10-minute bus ride from the Tube station

and I'm here to see today's auction lot. It's a semi-detached house.

It has three bedrooms and a guide price was set at £240,000.

What I can see of the outside looks promising, but you'll need to get busy with the strimmer and shears

to improve its kerb appeal. ..It's quite overgrown out there,

but neat and tidy in here. What a contrast!

This is a lovely hallway. Look, somewhere to put a console table, hang your coats,

put a nice mirror up there. It's got a very welcoming feeling the minute you walk through the door.

Nice sitting room. A second reception room is bright and sunny.

And this is the kitchen at the back of the property. Look at it!

You wouldn't have to do much in here at all. The units are in good condition, this is tiled.

Maybe I would change the lino for nice, big tiles.

Get rid of the strip lighting. But this house is the sort of property you could move into straight away

and how often do I say that on this programme? Not often.

# How often have I told you that I love you

# How often have I told you that I care? #

I know what this property is saying to me - rental opportunity.

I can see many buy to let investors falling over themselves for this.

Buy it and let it. There doesn't appear to be any major work required so far.

With a guide price of £240,000, this house looks very interesting.

Let's hope I'm not in for a big shock up on the first floor.

Well, I am just as excited upstairs as I was downstairs.

Much of the same. Two fabulous rooms there for bedrooms.

A little box room there and through here is the bathroom.

But look at all this space. You could get rid of that and have a really nice L-shaped bathroom.

This house is just a bit too good to be true, really.

# Too good to be true... #

This three-bed semi doesn't seem to need much work. If you were short on funds,

the water tank could stay where it is and my viewing isn't finished.

There could be even more accommodation to rent out.

Another bedroom? Maybe in central London. Not here in Essex.

So a walk-in wardrobe, perhaps? Now you're talking.

Outside, and the good times show no sign of abating.

OK, like the front it's a tad overgrown, but this garden is truly fabulous.

Many buyers have on their wish list a garage and, yes, you guessed it, this house has its own garage!

However, experience has taught me that people do like one more thing to seal the deal.

If you're looking around a property and you're feeling uninspired,

just do what I do - take a peek next door to see what's possible.

Now this is what it could look like. Fantastic!

And it's a great way to just pinch ideas. After all, imitation is the highest form of flattery.

How about some off-road parking? That's what I'm talking about.

It's a super way of adding value and making a property much, much more saleable.

We invited a local estate agent along to ask for his thoughts.

This property is guided at £240,000.

I'd stick with the existing layout,

purely because for long-term saleability, there isn't much to be gained by extending.

So leave the layout as it is, but how much could it sell for after a full refurbishment?

Once renovated, I believe we could sell it on for something in the region of £300,000-£315,000?

The all-important figure for a buy to let investor is the rent,

so how much could it generate?

Once renovated, we could rent this out for somewhere in the region of £1,100-£1,150 per calendar month.

There's money to be made here so this is a great one to go for, in my opinion.

Pay the right price, carry out a simple refurbishment and you could sell on for a profit

or rent this out and achieve a good yield. It's win/win.

Let's see who else thought so when it went under the hammer.

Right, move on to Lot 54. A three-bed, semi-detached house.

Who'd like to kick off on this? 230?

230. 235, sitting down.

235.

240?

240. 245.

250. 250. 255.

260.

265?

261.

262.

263, yeah?

264?

264, elsewhere? 264? If not, 263.

First time. Second time. Third and last time.

Have you all done? 263.

The new owner of this three-bed semi in Upminster is Keith.

The hammer fell at £263,000. He was at the auction with his son, Justin.

Keith lives in Billericay, Essex, and runs a chain of tanning salons.

# I'm Billericay Dickie and I'm doing very well... #

Congratulations, guys. What's the story behind wanting to buy this?

Well, we develop properties. I've been buying properties for the last 10 years on a buy to let basis

and Justin said to me last year that he'd like to be refurbing and developing.

-So here we are.

-Your dad's given you the opportunity for a taster. Dipping your toe in the water.

-Yeah.

-Is he ready for this?

-Yeah. Basically, my life's quite easy.

-I write the cheques and he has all the aggravation.

-Exactly how it should be!

After 10 years of developing, Keith has earned the right to relax, take things easy

and hand the stress down to his son, Justin.

He's already had to put his trust in his son because he hadn't viewed the house before the auction

and Justin only had time to see it from the outside. So Keith took a punt on this one.

Tell me what it was like when you came inside and saw this.

Really pleased seeing the good condition. There's not too much that needs doing.

Basically, it needs a bit of modernisation, good decoration.

There's things we might change - the kitchen and the bathroom.

But basically I think it's a pretty bog standard refurb.

Yes, I agree. Keep it simple, guys. But I'm not sure about replacing the kitchen.

They plan to sell the house. ..Why do you want to sell this on?

This is obviously the venture for Justin. It's to turn it round, make a profit and move on to the next.

-Justin, are you nervous? It all rests on your head.

-To be honest, I'm all right. We've done stuff,

maybe not down this road, but other things with him in business before.

So I'm not too nervous about it.

-Do you work with your dad a lot?

-Yeah, we work together quite a bit.

-So you are a father/son team.

What else do you two do?

My main business, which I've been in since 1984, is tanning salons.

I've got a chain of salons through Essex, London and Hertfordshire.

About 10 years ago, I diversified and went into property and now I work with Justin on developing.

They also produce their own tanning products and it's a business that keeps Keith busy,

but property has also proved to be lucrative. Did they know what it would cost to get this in order?

What sort of budget have you got to change things here?

We're looking probably about £15,000, £20,000 on this one.

-So how long's it going to take?

-I would say maximum 8 weeks.

-Can you stick to that?

I'd say hopefully a month.

You're saying a month, you say double that. It's going to be interesting to see who's right!

It might be in the middle!

-Guys, it's been fantastic meeting you. Good luck with this.

-Thank you.

-I hope it really does work out.

The pressure is on for Justin!

Keith has decided to take a very hands-off approach here.

He wants this to be a learning experience for his son and with very little work to do,

it's a great one to start with. Having said that, houses can throw up all sorts of problems

when you start the work. Is it going to take Justin's optimistic four weeks to do?

Or realistic Dad's eight weeks?

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

Coming up: in Barrow-in-Furness, Cumbria, this bungalow could be changed in, oh, so many ways.

Options to consider.

We return to Upminster in Essex to get dad Keith's verdict on his son's work.

Justin's done fantastically well. He's overlooked the whole project.

But first it's back to Staffordshire to see Alan and Jill's unusual student digs.

The actual restoration worked well.

In Newcastle-under-Lyme, Staffordshire, I came across a remarkable building

with Gothic towers, quirky windows and a slate roof.

This 1860s detached property was anything but the norm.

Along with a decent-sized garden and plenty of parking, it was also in a great location

for the nearby hospital and university. Yet it was in very quiet surroundings

where the neighbours were unlikely to cause too many problems.

For a start, it's an ex-council property, but not how you might think.

Yes, it's the cemetery lodge.

And if its position in the cemetery grounds didn't put some people off,

the amount of internal work might.

This former council office building had lain empty for a couple of years. There were signs of damp

and with a layout that was perhaps fine for office work, but not so great for a residential building,

this was going to be a tricky refurbishment.

But for retired teachers Jill and Alan, this looked ideal for their student let business.

So they paid £162,000 to buy this rather quirky lot.

What got you into student lets?

Many years ago, when our son was going to university, we looked for property for him to stay in.

Some of the ones we saw were so horrible, we thought we'd go for high-end, home from home properties.

So with a budget of £30,000-£40,000, Alan and Jill were hoping to turn this

into student accommodation by creating six bedrooms with a shared common area, kitchen and bathrooms.

But the clock was ticking and they needed to get the work done in five months for the student year.

So having employed a local building team, they cracked on with the work.

Now, just four months later, we're back.

Perhaps not surprisingly, the outside hasn't changed much, though there is a new front door.

But what lies behind?

Well, it's certainly a more welcoming hallway.

No more hatches, just smooth plastered walls.

And those old office rooms? They're now three downstairs bedrooms.

One at the front and one behind it.

Then there's a third en suite bedroom also at the front.

This is one of the original rooms in the property, dating back to 1860.

It was then latterly used as an office for the council.

It had an open doorway through into the room next door.

We wanted to block it off to make an independent room for students, as well as having an en suite.

It's bigger than some rooms, but smaller than others. We're pleased with the outcome.

Putting in a dividing wall has allowed them to create a communal lounge out of the back office area.

And off this communal lounge there's now a shared bathroom and kitchen.

Originally in here there was very little you'd call a kitchen.

We started increasing the space by knocking down the pantry wall to enlarge the space available.

We then rebuilt it with all the new units and new appliances to make a lovely kitchen area.

And with a nice colour scheme, too. I'm sure they'll enjoy cooking here.

So the kitchen's greatly improved. And with the old toilet area converted into a utility space

and a new boiler fitted, the downstairs area is ready to go.

Upstairs, the three main rooms have been converted into three more bedrooms,

one with a fantastic en suite.

And two other good-sized, fully-furnished rooms.

So with six bedrooms and high quality communal spaces,

this former office building looks as though it has a lot to offer as student accommodation.

And it seems the internal work wasn't finished a minute too soon.

Absolutely staggered.

When we took it to market, it was in a back-to-brick state

and we had three sets of students around within 24 hours.

-We had promised it would be ready in time.

-They took a leap of faith and believed us and signed up.

# Take a leap of faith

# Take a leap of faith... #

They certainly did take a leap of faith, but Alan and Jill have also delivered.

It's fantastic. They've managed to rent out all the rooms.

But did they have to throw more money at it to get everything done in time?

Originally, we suggested a budget of 35,000 to 40,000.

We then made the decision to upgrade on top of that,

so the bathroom fitments, we decided to move away from just a plain, standard fitment.

The lights above, the Velux windows above, we wanted more light in the house as you enter it,

so we changed those,

which has taken us up to 43,000.

A £43,000 spend on top of a £162,000 purchase price

takes their total outlay without costs or fees to 205,000.

Having dug deep to make this a great place for students,

have they also made a solid investment?

What do two local estate agents think?

They've done a fantastic renovation to this property, inside and out.

It's a lovely character building and they've restored it very nicely.

It will stand out as a student residence.

This is definitely high quality student accommodation,

but as a resale property, have the couple added any value to their £205,000 investment?

In the current market, we would hope to achieve in the region of £250,000.

In its current condition, this property would fetch in the region of £240,000.

-That's on the low side of our expectations.

-That's a bit low.

-But we're not selling.

That's a potential pre-tax profit of between £35,000 and £45,000,

but as Alan said, this is a rental vehicle,

so having already let the lodge to a group of students,

what total monthly income are they getting for the six rooms?

This year, we're going to have just under two-one,

but we've made it a loss leader this year because we came to the market late

and as I said, the students took it in good faith. They saw it as a back-to-brick restoration.

So, in subsequent years, they may aim for a higher figure.

But for now, they're happy with their £2,100 a month rental income.

Alan and Jill work on 11-month short-term leases,

so £2,100 per calendar month will bring in £23,100 a year

or a yield of around 11%,

so it certainly seems that reviving the lodge has paid dividends.

What next?

-Have a holiday.

-Yeah.

-Maintain and manage all the properties we do have.

-Yeah.

And possibly look at doing a project again. We've enjoyed it.

The actual restoration has worked well.

I'm in Barrow-in-Furness, Cumbria, often referred to as the Gateway to the Lake District.

This industrial town thrived on its coastal location and the steel and shipbuilding industry.

The property I'm here to see is pretty well located.

Not far from the town centre, schools, a hospital and shops nearby,

it's looking good, this nice estate.

I'm here to see a bungalow. It went up for auction with a guide price of £100,000-plus. Let's take a look.

So, useful little entrance porch here, keeps the draughts out, then into the main body of the bungalow.

Fairly traditional layout - one large area in the middle off which all the rooms go.

You've got a bedroom at the front, a fairly decent-sized lounge there with a reasonably modern fireplace,

and in fact, the whole bungalow seems to be in reasonable nick.

Toilet and bathroom, bit of a dated suite - you'd want to change that.

Through to the kitchen, then through to the second bedroom, but what on earth is this?

It's almost like it's an upside-down dormer and then below it, the window.

Obviously, out there, there's another room, but that, clearly, was an extension.

It's left you with this window between rooms which always doesn't work.

So either take that wall out completely to make one huge room

or maybe there's other things we can do with the layout.

# Upside down you're turning me You're giving love instinctively

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

Not only is this all back to front, upside down and a bit odd,

the extension room doesn't even have an exit out into the back garden,

so I think I'd knock down the dividing wall, stick in a couple of French or patio doors

and hey, presto, you'd have one decent-sized room instead of two slightly odd ones.

Well, through to the kitchen and your first impression might be to just rip it out and start again.

That's certainly one option, but if you're renting this place out,

maybe with a few bits of...I don't know, bits of titillation, maybe you could just live with this as it is.

So what could you do, rather than just ripping the whole thing out?

Just replacing the work surface with something more modern would give a lift to the whole thing.

Maybe painting the tiles, similarly.

Over here, a very dated and old-looking gas hob. Replace that with a halogen perhaps?

Again it would give a lift to the whole place. You could rip out all of these units, take them all out.

But why not just keep the carcasses and replace the doors with something a bit more modern?

Changing the lighting from this, which isn't to everyone's taste,

to halogen downlighters, that's quite a sexy thing to do.

All options to consider.

# We can think about it

# Think about it

# Think about it, baby

# Come on, sit down here Think about it... #

If there are things to consider about inside the property,

there are also a few to think about outside.

Well, at the rear of the property, a decent-sized garage, a small shed,

an area largely laid to flagstones

and it's clear now that is an extension, as you can see.

The other thing you might want to consider is going up into the roof

to create a proper dormer, as opposed to the thing which is there.

Is it worth doing? It will come down to how much it will cost and how much value it will add

and also what it will add to the quality of life of living here.

It's possible. Is it worth doing? That's up to you if you bought it.

# It's all up to you now

# It's all up to you now... #

There are a number of things you could do here

from a loft conversion to losing the carport and garage and building a side extension,

but it all boils down to what you want the bungalow for.

If it's as an investment, it's weighing up the costs versus the returns.

# It's all up to you now... #

So what does a local estate agent think about what's on offer here

and what kinds of returns it could generate?

You could go into the loft to make a third bedroom.

There is an extension already at the back which could be used as a dining room or a bedroom also.

How much more value could extending add to this bungalow, guided at £100,000-plus?

Once renovated, I'd see this propert achieving £135,000 to £140,000.

Once extended, a three-bedroom property, this back room as a dining room,

I'd expect it to achieve round about £175,000.

With bill costs to do an extension, that's not a massive mark-up.

What about as a rental?

I can see it achieving about £550 to £600 per calendar month.

With all the extensions and into a three-bedroom, I'd expect it to achieve £700 to £750 per month.

Well, a bit of modernisation required and certainly the internal layout needs to be sorted,

but it's a nice little bungalow in a good location,

so who was steely enough to buy it when it went under the hammer?

Lot number 13 is an extended, two-bedroom bungalow

in the sought-after area of Barrow.

95 I've got on the phone and we're away. At £95,000.

I'm looking for 100. I'll take it in fives. Can I say...? 100 I've got

Looking for 105 on the phone.

105. 110.

112.

114? 114.

May I say 116, sir?

Yes, 116.

May I say 118 behind...? 120 in front.

120. At £120,000 I'm bid.

122? 122 I have.

124?

124 I've got. 126.

I'll take one off you, sir. 127. 128.

129.

At £129,000.

130 behind? 130 I've got.

131? 131 behind.

At £131,000 for the first time.

At 131,000 for the second time.

At £131,000 then, selling away, all done, all out... Sold.

Well done, sir.

'That successful bid of £131,000 was made by Martin.

'His partner Lorna couldn't make it to the auction.

'Martin is retired now, having worked in IT, while Lorna is a client service manager at a gym.

'I met them back at the bungalow to find out what they planned for their purchase.'

-Lorna, Martin, lovely to meet you both.

-And you.

-Congratulations.

-Thank you.

Tell me why you wanted to buy the bungalow.

An investment, really. As simple as that.

And we had a legacy to spend, so...

-Right. So decided to put it into property?

-Yeah.

Even in these times when people down the pub say, "Whoa, property..."

Well, actually, I heard about the property in a pub.

-Oh, did you?

-LAUGHTER

A friend mentioned that it was up for auction, so I thought I'd give it a go.

'Getting local information on the grapevine is always useful.

'Martin has previously renovated one other property,

'so they're not complete beginners,

'but even so, they've now got to turn this pub dream into a sound investment.'

So tell me what you're going to do to transform it.

Well, a new bathroom, new kitchen,

take the wall down in the kitchen,

make it a kitchen-diner.

-Oh, right.

-Block up that rather silly-looking window in the...

That's about it, really, and re-decorate.

-Possibly a loft conversion if we can?

-Possibly, if we can afford it.

-Who's going to do the work?

-Martin will do a lot, unless it gets a bit complicated for him,

then we'll just get contractors in.

So what's your background, Martin? Is this something you've done before?

I've done this before, but it's not my background at all.

I was a finance IT director for a pharmaceutical company.

-Right.

-So it's a bit of a difference.

But I retired a few years ago and this is just something to do, really

So when he's not doing my cooking and ironing, he can be up here decorating.

-That works quite well then?

-Yeah, definitely.

'Martin has given himself a £10,000 budget

'and a relaxed timescale of six months to get the job done.'

So is there anything that might sort of delay the process at all?

-Football?

-Yeah, probably.

-Football?

-Football.

-Why?

-I'm just mad about football. I go all over sort of watching teams play.

-Any particular team you support?

-Motherwell.

-The odd Saturday here and there might be out of the equation?

-Could be.

And any football that's on the telly, any game, any team, Martin will watch.

-That much of a fanatic about football?

-Yeah.

-One of the first things we can expect to see is a portable television in the corner?

-Yeah.

-Congratulations. Good luck with it. We look forward to seeing how you get on.

-Thank you very much.

So an interesting little project for Martin and Lorna.

The big question is, will Martin get the job finished within six months?

I guess it all comes down to whether it's an interesting football season or not.

Find out how he gets on later in the show.

I wonder if our intrepid buyers' plans have worked out or have there been problems?

Well, time has gone by and it's the day of reckoning. Let's go back and find out.

We're now heading back to the Essex town of Upminster

where earlier in the programme, this three-bed semi went under the hammer.

Keith bought it for 263,000.

His son Justin was going to manage the refurbishment as his first property project.

Keith owns a chain of 18 tanning salons and has a buy-to-let portfolio as well.

But the plan was for Justin to do it up and then sell on.

Keith hadn't seen the house before he bought it.

He went on Justin's recommendation judging by what he had seen only from the outside.

But luckily, it appeared to be in remarkably good order and needed very little work.

-How long will it take you?

-A maximum of eight weeks.

-Can you stick to that?

-I'd say, hopefully, we can have it done in a month.

-So you're saying a month and you're saying double that?

-Yeah.

-It'll be interesting to see who's right.

Justin and Keith have finished the work here.

I think it's a shame they haven't gone for my off-street parking idea,

but the hedge has been trimmed and you can now see the house much better.

There have been some unexpected major changes.

They decided to take the wall down between the two reception rooms.

A new patio door has been installed.

No need to go to the tanning salon - the sunshine floods in!

I'm really impressed with the transformation that has taken place in the kitchen.

Justin has kept the original units,

but replacing the work-top and tiles have given this room a brand-new feel.

And removing the door has integrated the utility room much better.

But as Justin explains, it was really just a case of filling in the missing pieces.

The first thing, when we came here, we had a big gap over there

where they previously had the hob and cooker.

So we've just patched that in - new hob, new cooker there.

New sink, new tiles on the wall, lick of paint all round.

There was a big, horrible door here,

so we've opened it all up nicely into the new utility room and bathroom.

We brought the floor up a level, so it wasn't such a big drop down.

There was a big concrete step going down, which didn't look nice, so we got rid of that, tiled it through.

It's a lot more modern and up-to-date with the downlighters,

the new tiles... I think it looks really good.

I'm desperate to know how long the work took. Justin predicted one month and dad Keith two months.

So, come on, who won?

Well, luckily, I was right.

It would have probably taken a couple of weeks less,

but we had other projects the builders were working on and a coupl of builders were away on holiday.

Hang on, guys. This is a bit more than you'd initially planned.

You never mentioned knocking down the wall between the living rooms.

We weren't going to. The builders suggested it and we thought it was a good idea.

It's made two small rooms into a nice, big family living area.

And with those French doors at the back overlooking that garden, you know, it's ideal.

Upstairs, the fitted wardrobes have been removed from the two main bedrooms.

All three bedrooms have been decorated in the house style

using beige, brown and magnolia.

And what about that cupboard that I fancied as a walk-in wardrobe?

They don't seem to have used it for anything.

We were going to knock through, make the bathroom bigger and make maybe like a wetroom or a shower.

We got rid of that idea and just put the shower in the bath and renewed everything in there, the tiles...

And we think that looks nice.

Justin's got an eye for refurbishment.

He has concentrated on the two most important rooms in any house -

the kitchen and bathroom. Keith must be pleased.

Justin's done fantastically well.

He's overlooked the whole project. He's been here regularly, made sure everything runs to schedule.

So with no structural changes upstairs and no off-street parking,

how much has the project cost?

We originally set the budget at abou 15,000. By not doing the shower room and the wetroom upstairs

and the minimum amount of work in th kitchen, it's kept the budget down.

I think we've come in just under about 10,000, so pretty good.

With the £263,000 they paid at auction,

that takes Keith's total investment to 273,000.

Time to see what two local estate agents think

of Justin's first development project.

First, the returning agent.

First impression, having seen the property before the work was done,

certainly very clean, tidy, modern inside.

It's a shame no off-street parking was added, but what they've done to the property complements it nicely.

What they've done to it is really, really nice.

It's all been redone throughout,

new carpets, refitted kitchen and the bathroom's really nice.

So generally positive views from the estate agents,

but will that be reflected in their valuations?

Do they think the house is worth more than the 273,000 Keith has invested here?

We expect the property to achieve somewhere in the region of £295,000 to £300,000.

Resale value - to put on the market between £290,000 and £300,000.

If those valuations were achieved, they would generate a gross profit

of between 17,000 and 27,000 before taxes and expenses.

Is that what Keith had expected?

I think it's a little bit low. Obviously, we'd like to obtain a bit more than that.

Keith already has a portfolio of buy-to-let properties,

so if he wanted to let this house rather than sell, how much could it earn?

The property would achieve somewhere in the region of £1,150 to £1,200 per calendar month.

Rental-wise, I think it would achieve £1,150 per calendar month.

So the property could generate a rental yield of over 5%.

Does Keith think that might be the route to take?

Yeah, put it on the market, leave it up for sale for, say, two months,

and if we don't have any buyers, we'll look at the rental market.

Will they be working together again?

-Definitely.

-Yeah.

'Located in the Cumbrian town of Barrow-in-Furness was this two-bedroom, semi-detached bungalow.

'With rooms off a central corridor, it comprised a dated kitchen and bathroom, a decent-sized lounge

'and a reasonable back bedroom.

'Then things turned strange with a second bedroom looking out into, well, the rear reception room.

'But despite this rather odd layout,

'local couple Martin and Lorna saw enough in it to splash the cash

'and buy it for £131,000 at auction.'

Tell me why you wanted to buy the bungalow.

An investment, really.

As simple as that.

And we had a legacy to spend, so...

-So decided to put it into property?

-Yeah.

Even in these times when people down the pub say, "Whoa, property..."?

Well, actually, I heard about the property in a pub.

-Oh, did you?

-LAUGHTER

A friend mentioned that it was up for auction and I thought I'd give it a go.

Martin is a retired IT finance manager and Lorna works as a client services manager at a gym.

It was going to be down to Martin to do the majority of the hard graft.

And with ambitious plans to open up the kitchen and perhaps do a loft conversion,

all on a budget of £25,000

and in just six months,

it was going to be quite a challenge.

Now, nearly one year later, we're back and, from the outside,

it's not looking very different at all.

It's still got the carport and the garage.

It's still grassed at the front and the windows and doors look the same.

So what about inside?

Let's hope at least that rather odd layout of the two rooms has changed.

Wow, they sure have!

The dividing wall has been knocked down and the back area made into a dining space.

The front area is now a fabulous kitchen, as Lorna explains.

This is the new kitchen-diner, a space we're very, very happy with.

There used to be an external wall here with a strange window in

that didn't work in the flow of the house at all,

so we've knocked that through and made it into a lovely kitchen-diner, a nice family space.

Martin had a builder in to do the exterior bits,

but once the builder had gone, Martin did all the kitchen himself. He's done a really good job.

This really does make a great kitchen space.

But what about those stairs?

Where do they lead to?

Well, here we are in the loft.

There was a bit of doubt whether we' actually do this loft conversion,

but in the end, we decided to go for it

because one of my friends, who's a builder, said he'd do it for a fixed price.

But I had to do the labouring. In the end, this loft conversion cost £15,000.

That was the budget, that's what my friend said it would cost and that's what it was

Along with this bedroom in the loft, what was the old kitchen has been turned into a bedroom.

And there's a bedroom at the far end of the corridor,

making this now a three-bed property.

And to go with the bedrooms,

there's a completely modernised and revamped family bathroom

and a large reception room.

Clearly, there is still some work to be done

before this is all finished and ready for the rental market.

Even so, Martin has clearly been pretty busy.

He's done absolutely fantastic. He's been here nine to five, at weekends, learnt a few tricks of the trade.

-Yeah.

-Made a few mistakes along the way, but he's learning as he goes. Yeah, I'm really proud of him.

The decision to do the loft conversion was the key reason

for this project taking longer than they had first hoped.

Along with some decoration inside, they still had to tackle the dog-friendly area at the back

where they planned to tidy up and add some decking.

So with quite a few big decisions to make on the layout, were Martin and Lorna always in agreement?

I think we work really well as a team.

There's the odd barney here and there and discussions because of our different views.

I think we do work well as a team and we can see different angles.

-We probably get to the right answer in the end.

-Eventually.

I hope the neighbours haven't heard too many barneys.

Well, they certainly now have a place to shout about.

But how much has it cost to transform this tired, dated bungalow

into a modern, three-bedroom property?

The original budget was £10,000 for converting the house downstairs and refurbishing it.

There was a £15,000 budget for doing the loft conversion, so that made 25,000.

We're on 23,000 at the moment,

so I'm fairly happy with that.

There's a few things like the back door's still to do, so we'll be in and around the budget.

With them sticking to their £25,000 budget,

plus their £131,000 purchase price,

that's a total outlay of £156,000 before costs and fees.

But this renovation will have taken nearly a year before it's finished,

so has all the time and effort been worth it?

The progress has gone well.

Very nice. New kitchen, new bathroom central heating, double glazing.

The market is very strong for bungalows

that are completely finished and they bring a premium in price

as they attract the retired client.

The fact that they've put a loft conversion in

and made it into a family, three-bedroom house, as opposed to a ground floor bungalow,

to sell it, it's giving a bit more variety of buyers.

They've spent £156,000 to create their three-bedroom property,

so will this prove to be a good investment?

Since they have added the third bedroom, I'd expect offers in the region of £195,000.

We would now expect to ask a price of £190,000.

That's pretty good.

We'd be very pleased with that.

So a potential pre-tax profit of between £34,000 and £39,000.

But the estate agents also said the loft conversion had only added 15,000 in value

which is the same as it cost to build.

However, if it didn't increase the potential resale profit, it should increase its rental prospects.

As a three-bedroom family property, I would expect on the rental market £750 to £800 per calendar month.

As a three-bedroomed house, if the property was on the rental market,

we would expect to achieve £750 per calendar month.

-Quite happy with that.

-Very pleased.

I would say it's probably around the region you would expect to get from this area.

Even the lower £750 per calendar month would generate a yield above 5% which isn't bad,

so this is looking like a decent long-term investment.

Has it whetted their appetite for more?

-No plans at the moment for doing another one.

-And it would be nice to take a bit of a break as well,

get my tea on the table for five o'clock coming home!

We hope you've enjoyed watching the homes that went under the hammer today.

-We'll have more thrills and spills from the auction rooms for you next time.

-Goodbye.

-Goodbye.

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