Episode 67 Homes Under the Hammer

-There are property auctions held all over the UK.

-A thriving business

-with billions of pounds' worth of properties sold every year.

-So if you want to find out more

about buying and selling under the hammer, you've come to the right place.

We're always saying you should do your research before you buy at auction, but what does that mean?

You should go and see the property if you can and find out as much about it as possible.

That's a very good start. Let's see what tempted the buyers today.

In Cumbria, I call for reinforcements.

Hello. Equipment hire services?

Can you send a very big skip?

In London, I'm cooking up ideas to make this flat liveable.

"I'll fry some eggs." Far too tight. It's not working for me at all.

And this-baked bungalow in Derby needs creativity.

Somebody's done some clearing up and you've got a very interesting canvas on which to paint your masterpiece.

All these properties have been sold at auctions and we'll find out who bought them

and what they paid for them when they went under the hammer.

I'm in Cumbria and just 12 miles from the border with Scotland.

The place I've come to see is in a hamlet on the outskirts of Carlisle,

although it does seem to have some amenities of its own.

Well, you'd be sorted for a pint.

I'm in the semi-rural hamlet of Coathill on the east side of the town.

You've easy access to Carlisle and the motorways and all this beautiful countryside.

What more could you possibly want?

There is a slight drawback in some people's eyes - no school or shop.

But these can be found in neighbouring villages.

So is the property I'm here to see picture-postcard perfect?

Well, you can't knock the location, right on the edge of the village.

Beautiful views all around. The house may not be to everyone's taste. Turn of the century.

Looks a substantial size, though. Three bedrooms, semi-detached. A guide price of 95,000 quid.

Let's take a look.

'A quick look at the outside tells me there's a bit of re-rendering required

'and the roof might need attention, too.'

So what have we got?

A double-glazed door. That'll keep the wind off the hills out.

Stairs up to your bedrooms there and then through into your living room.

Straight away, I know what's called for. Hello, equipment hire services?

Can you send a very big skip? Thank you.

I think it's one of those rip it out and start again jobs.

Intrinsically, not a bad space.

An open fire would be much nicer. Ceilings want to come down.

But in terms of layout, a nice big room. Then through into your kitchen.

Everything here wants dumped in that skip.

Downstairs loo, maybe not ideal. Maybe think about converting that and sticking it upstairs.

Other than that, yeah... it's a skip it job!

# What does it get? It gets thrown in the bin... #

In a property like this, you need to see past the faded decoration and worn-out fittings.

There is potential here. You just have to look for it.

So upstairs... What delights are in store?

Well, a reasonable-sized bedroom to the left there.

Smaller odd room to the right. And it doesn't get much better to the rear. You've got this room.

Somebody has tried to make it a little bit more palatable by sticking in this dormer,

but this isn't going to work. The ceiling height is unacceptable

and these polystyrene tiles have got to go.

Sort of Heath Robinson crazy stuff going on with the heating system there.

And then a cupboard? Oh, no, it's not a cupboard. It's a toilet.

Not really sure that works, but a nice view out the window.

The low ceiling and miniature loo might do for a doll's house, but here they'd have to go.

# With a hammer, nail and a hunk of wood I'll build a doll house... #

Thankfully, the dinky dimensions end when you go outside.

So the house itself a good-sized space,

but walk outside and you find this incredible garden -

but pretty much like the house itself, it needs a bit of work,

but you can't complain about the setting. You've got open fields, sheep, hills in the distance.

And just take a look at that. What a beautiful little church.

A fabulous outlook like this certainly improves my view of this place,

but the house needs some reconfiguration or, even better given the space, an extension.

We asked the auctioneer who sold it for his opinion on this property,

which had a £95,000 guide price.

It's got great potential. It needs a full programme of modernisation.

New kitchen, new bathroom and hopefully get the bathroom upstairs,

whilst not losing any bedrooms.

Possibly a small extension. There's plenty of room to extend either out the side or to the rear.

Let's get some values, then. Firstly, how much rent could the new owner charge?

Renovated, with an upstairs bathroom and possibly downstairs toilet and shower room, utility room,

I think the property would rent in the current market for about £500-£525 per calendar month.

What if the buyer decided to renovate and sell on?

Sales-wise, if the property was done up to a good condition,

and shifting the bathroom upstairs whilst retaining three bedrooms,

a utility room and shower room downstairs, I think the property would achieve, in this market,

in the region of £165,000.

Well, more than a weekend's work to sort this place out,

but for a rural lifestyle with easy access to good communication links like the motorway and Carlisle,

I don't think you can go too wrong. Let's see who agreed.

Is there 80 in the room for this? £80,00 for Lot 43?

80 shall we say? Tempted? Yes, you are.

At £80,000 I'm bid. 82 I've got.

84 may I say? 86? 6 I have.

88. And 90?

No. Back with you at 88.

90 anywhere? 90 I've got, stood to the rear.

92. 93.

94. 95?

95 I've got. With you at the rear.

It's against you, sir. You're out.

Selling this at 95. You must be here for a reason. It's not to look at me.

Now is the time to bid. At £95,000 I'm selling this.

First time. 96.

New position. 97, sir? Nearly got it.

No.

96. With you, sir. New position. Sat to the rear.

Tempt you with a half? No?

£96,000, then. For the first time.

At £96,000 for the second time. Could be the last bid of the day. At £96,000. Are we all done?

All out? Third and final time. Sold to the rear, sir. Can I have your paddle number?

Sweeping in with that last-minute bid of £96,000 was Jim,

who not only has a property portfolio, but also owns that local pub.

His son, Stephen, a joiner by trade, will be taking charge of this project.

# Father and son

# Down the road they come... #

I met the father and son team to find out what their plans were for this dilapidated three-bed semi.

-Jim, Stephen, great to meet you.

-Thank you.

-Congratulations.

-Why did you want this place?

-It needs to be renovated.

We've got a few of these properties. We thought we might get a bargain.

-So what's the idea for it? Do it up to sell it on?

-Buy to let.

-It's a substantial property.

-Yeah.

-But not without its problems.

Major problems. The roof has to come off, raised.

All the plaster back down to bare brick, ceilings out,

floors out. And then start from the beginning.

Electrical, plumbing, bathroom, kitchen. The full works.

-That sounds like it'll be expensive.

-It's going to cost us roughly 30-40 to do it up.

-But it should be a hell of a property afterwards.

-Yeah, you bet.

And what's your involvement, Stephen?

Basically, from start to finish. Raising the roof,

-floors, everything.

-And you'll be doing it?

-Yeah.

'But for any work Stephen isn't able to do, he'll be bringing in local tradesmen to help.

'As they both live and work nearby, they aren't short of contacts, which is lucky,

'because this property is not short of jobs for them.'

-Are there other properties that wouldn't have been so much work?

-A lot. Lots of them.

But there's no way you would find anywhere with a view like this.

The potential for it is just fantastic.

You might be falling into a trap. It's buy to let. You're not supposed to be so passionate.

We'll really enjoy this property, I can assure you. And it'll be a good return, I'm sure.

-What is the timescale for it?

-Between 6 and 9 months.

-Right.

It'll take that, without doubt.

In that time, they also plan to steal a bit of the garden for an extension.

The extension comes out, the kitchen looks over the fields. There's a utility and downstairs toilet,

then into the kitchen/diner. Then you've got your living room and a bathroom upstairs.

-And lose a bedroom?

-No, still keep three bedrooms. I've kind of designed it out.

There will be one rather small bedroom, but it's a selling point for the future having that upstairs.

Fantastic. It sounds extraordinary. 6-9 months, we'll be back.

-Yep.

-I look forward to seeing how you progress.

-You'll see a big difference.

-I'm sure we will.

Thank you.

Well, father and son team Jim and Stephen certainly seem aware of the challenges ahead,

but I am a little bit concerned this is a buy to let property and that's a lot of money to spend.

Find out how they get on restoring this rural house later in the show.

This is beautiful Blackheath in south-east London.

With bunting, boutiques and little independent eateries,

it's a gorgeous inner-city village with a price tag to match.

Just a mile south of all this loveliness is Leigh - less popular and not so pretty,

but much, much cheaper.

With its own fast rail link into the city, it's still convenient

and with gentrification happening, it's worth a look.

The lot I'm here to see is on this busy road,

but you're only a 10-minute walk from Leigh train station and a 5-minute drive to Blackheath

without its crazy prices.

The property I'm here to see is a flat in this grand Victorian pile

and it had a guide price of £110,000.

Nowadays, it's hard to believe that in London houses like this were originally built for one family

and that the now practical off-street parking would have been a grand driveway.

Inside, the shared entrance hall is a tad tatty, but still retains some of its former grandeur,

with cornicing, lovely high ceilings and some stained glass on the half-landing windows.

I'm wondering if the second-floor two-bedroom flat I'm here to see will have any grandeur, too.

So straight into the flat. What have we got, then?

Well, bathroom to the left. I do like natural light in a bathroom

and there's a lovely big window. Nothing nicer for doing your makeup.

Bedroom to the right. I would call that a very small double.

What have we got through here? I thought it was an airing cupboard.

It would be a good idea to knock those two rooms through and have a much larger space.

And in here the kitchen.

All the units are against the back wall. Not ideal,

especially if you want to do some cooking. Far too tight.

It's not working for me at all. Bedroom through here.

Nice space to the back of the property. So where is the lounge?

Does that mean this is the kitchen/lounge area?

As you can see, it's just not a big enough space. I don't usually say this,

but in this instance - this is a one-bedroom flat.

There are a few ways to reconfigure. What I would like to do is to either

knock through this way along here and have these two bedrooms

as a kitchen/dining area, living room.

And this would be the bedroom because it's nice and big. But think about the road noise.

You might hear lots of traffic in the evening. Or you could knock through this way here

and have the kitchen/dining/living room this way, but that means you've got a rather small bedroom.

I think I'd go for option number one. But if there's anything I'd take from this,

it's that it's a one-bedroom flat. NOT two.

The back of the property faces out over peaceful gardens and a playing field,

so it's a shame to put the bedroom at the front, but it's the easiest way to reconfigure the space,

unless you rip out all the walls and start again. That would eat into your budget

when turning this from a two to a one-bed should be the priority.

# It's the night When two become one... #

This small flat hasn't quite lived up to the scale and grandeur of the outside,

but I still like the feel of it. It's young professional territory.

Out of the window you can even see Canary Wharf. However, there are some kinks in the paperwork,

namely regarding the 91-year lease.

The lease was extended 8 years ago. You won't have to do that for a while. Sorted!

Not so. In fact, I've been told the freeholder is absent, which is a very bad thing for a leasehold flat.

If there's no freeholder, who do you pay your service charge to? Who maintains the fabric?

Who organises the insurance? And what happens when you need to extend the lease again, as you will?

Problem!

Problem indeed. And something which may make it trickier to get a mortgage on this.

But there is always something with an auction property to give you the heebie jeebies.

You just have to decide if you can handle the hassle of sorting it.

# Problem! #

The guide price for this pad was £110,000. We invited along

a local estate agent to tell us more about up-and-coming Leigh.

The area is young, vibrant, lively.

Ideal for a first-time buyer.

A lot of corporate professionals in the area from Central London.

You have a lot of pubs, bars, clubs, restaurants. A nice area, generally.

As for the property itself, the estate agent agrees it would only work as a one-bed,

so let's talk values.

The property in its current condition I would estimate at £130,000-£135,000.

However, when the renovations are carried out,

I'd say that I'd be able to obtain £160,000-£170,000 on the property.

And rental?

Once fully renovated, I'd say the property would achieve £850 per calendar month.

A cute little flat in a decent area, but in fact it's a one-bed masquerading as a two-bed

with freeholder issues that could cause you many a headache to solve.

Let's see who went for this at the auction.

Lot 26 is a two-bed flat. Requires a little bit of updating.

100 anywhere? 100,000.

105. 110. 115.

120. 125?

One more go? Have a think.

125 elsewhere.

Seems low, this one. 125. New spot. 126.

127.

128. 129?

128 with you.

129?

If not, 128. Going. You're going to lose it. 128 first time.

Second time. Third and last time. All done?

Sold. 128. Well done.

Slightly hidden from view, that successful £128,000 bid was made by Austin,

who was purchasing the property with his colleague Imran. They're not your standard swish developers.

These guys have a rather clever game they're playing.

# I can't keep wasting my time

# On your games... #

-Austin, congratulations. Imran.

-Lovely to meet you.

-I bet you are absolutely thrilled.

-Yeah, it's a nice little property.

Tell me why you've bought this.

We're part of a property company. We work on joint ventures with clients.

So we buy them at auction to flip, turn around and split the profit.

-So you've not bought this for yourselves.

-No, we've bought this with two or three other clients.

We've pooled their money and we find projects for them and we project manage it.

So they see the project later on once we've bought it.

-So you take all the hard work and stress out of buying property!

-Yeah.

-Fabulous.

-Or take the stress on!

Are there still people out there that need that hand-holding process to that extent?

Yeah. A lot of our clients are successful business people working long hours.

They want to get another investment and have yield coming in, but they don't have time to go to auctions,

do the research. We take all that from them, all the stress, and they get a nice profit at the end.

-You guys seem to know what you're talking about.

-Hopefully!

-What is your background?

I'm an ex-agent. I ran an agency for six years, then set up on my own. And I work for these clients, too.

-What's your background?

-I've been in property for 2½-3 years.

We've got some great people who have been doing it for 15 years. Austin was originally a client.

We've just built that rapport.

'By joining forces, funds and experience, I think Austin and Imran have come up with

'a very interesting business model. It wouldn't be for everyone, as you hand over a chunk of your profits,

'but it seems to be working well for these two. So what have they got in store to transform this place?'

The aim is really to turn it back into a one-bedroom, which I think it was originally.

So we'll turn it back.

So we're knocking this through here into a nice through lounge and kitchen there,

-then create the bedroom here with loads of light.

-And budget?

-We've budgeted for £20,000-£25,000.

-It's quite a fair amount. You don't have to install central heating.

-It really is kitchen, bathroom...

-That's it.

-Take down the stud partition wall, flooring.

We take the worst case scenario and work back from there.

Hopefully, we'll spend less than 20, but we like to do it up to a good standard.

-We might get better kitchen units.

-We'll upgrade certain things, maybe a nice work surface in,

nicer floors. So that when people do walk in, it's not got a typical developer's stamp on it.

They feel some love and care. We've got some lovely features,

so it's making the most of those, adding a few more character things.

That will push it over, say, another flat that's a little bit bigger.

The key is getting someone who has seen something else and come here.

I'm liking the sounds of their plans to turn this flat from flawed to fabulous.

With their builders set and good to go, Imran and Austin think they could complete this in 8 weeks.

They're not even fazed by some of the other problems that came with this particular pad.

Imran, buying this at auction doesn't come without its problems.

What have you stumbled across here?

There's a few issues. There's an absent freeholder.

Luckily, we're negotiating with the other leaseholders to hopefully take control of the freehold,

so we can hopefully give someone a share of the freehold, so they have greater control of communals,

the building. It gives them a sense of ownership. We're working now on that for the next few months.

A challenge, but we'll get round it.

-Well done again. I'm expecting great things here. Congratulations.

-Thanks.

-Thank you.

Austin and Imran have really hit on a great business model here

and I am sure they will make that tired flat shine.

You can find out how it looks later in the show.

Coming up: I visit a bungalow in Derby with some cons, but a big pro.

One thing you certainly have got is space!

In south-east London, has Austin and Imran's project been tough enough?

-I'd like a challenge for the next one!

-Don't say that!

But first, in Cumbria, just how good a job did Jim and Stephen do here?

I've decided to move into it.

We've returned to Coathill, near Carlisle in Cumbria.

The property purchased at auction here for £96,000 was this, a three-bed semi.

It was bought by Jim and his son Stephen, a joiner, who was going to take on most of the work.

And this house wasn't short on things to do.

-It's a substantial property.

-Yeah.

-But not without its problems.

Major problems. The roof has to come off, raised,

all the plaster back down to bare brick.

Floors out, and then start from the beginning.

Electrical, plumbing, bathroom, kitchen. The full works.

That was just over 13 months ago. So have they managed to give this the thorough overhaul it needed?

We've come back to find out.

Well, the boys promised the full works and they've delivered,

particularly by adding a rear extension for a rather fabulous new kitchen.

The kitchen was the biggest part of the project. We've taken out that external wall there,

put on a lean-to extension.

We were quite lucky with the extension. We didn't need planning permission for this size.

We put in a high-spec kitchen and a utility room for selling points for the future.

Although they didn't need planning permission, it's always the best course to take council advice

on what is and isn't allowed.

Selling isn't the only plan Stephen has for further down the line.

Once external work has been done, he's considering adding a double garage with a bedroom above it.

For now, from the roof right through to the ground floor, every inch of this place has been renovated

and is as good as new. In fact, it looks so impressive...

I've decided to move into it rather than see somebody else rent it out.

It cuts back on the rental value!

Initially it was for rental, but at the end of the day the quality and standards are there,

so when Stephen said, "Dad, I really want to move in. I'd love to stay in the village," fantastic.

And I don't blame Stephen. Although experts were called in for some work,

Stephen did the bulk of it. He's put a lot of time, effort and skill into making this property

something special. He had to fit doing it into evenings and weekends around his other jobs,

so the original timescale of 6-9 months has stretched and there's still the garden,

but if something's worth doing, it's worth doing right.

Stephen's always been meticulous in the jobs that he's doing.

If the job's not done right, it's not getting done at all.

He's just so...hands-on. He's done a fantastic job here. Really, really proud of him.

As well he should be.

In addition to all the work that's been carried out,

there's a brand-new and I thought necessary addition up here.

There wasn't a bathroom upstairs at all in the house, so we've rejigged the walls upstairs

to form three bedrooms, a bathroom and an en suite in the master.

Here in the main bathroom, we had flexibility from the start.

We re-aligned the walls to make the standard bath fit in lengthways

and also managed to squeeze in quite a large shower with the toilet and sink as well.

I'm delighted.

The upstairs is certainly a far cry from the chaos, cracks and crazy ceilings that were here before.

The original budget for the project was £30,000-£40,000.

Once everything's finished, they reckon they'll be closer to the 40, so within budget.

That's not the only thing Stephen's breathing a sigh of relief over.

Finishing and moving in the house and moving out of my parents' house!

-Aye.

-Having my own space.

Let's hope they're also left laughing when it comes to money.

With their £96,000 purchase price added to the £40,000 for the work,

their total outlay here is £136,000. We invited two local property experts

to cast their eyes over this much-improved pad.

They've done a very good job to a very high specification.

The extension is really good.

It gives them a sizeable kitchen and great views over the back over open fields.

It's very nice.

My overall impression on the property is absolutely lovely.

They have done all the work to a very high specification and it's a beautiful property

situated in a nice, quiet village with absolutely amazing views.

Although Stephen has moved in to the house, if he did do an about turn and decided to sell,

would he and his dad stand to make a healthy profit?

If this was on the open market, I would recommend an asking price

of £160,000-£165,000.

I would put it in the region of £160,000-£165,000.

Once the garden's finished, the outside, we'd expect about 170, so that's good.

There's a bit of spare cash there. It's all right.

A pre-tax profit of £24,000-£29,000, then, but what about if they went down the rental route?

If this property came to the rental market,

I would recommend in the region of £500-£550 per calendar month.

If this property went on the rental market today,

they would achieve in the region of £525-£550 per calendar month.

Good. But we're not going to rent it out. We're going to keep it now.

Stephen's going to stay in it. He's happy.

And that makes me happy, too.

I'm in Normanton, a suburb of Derby in the east Midlands.

This charming arboretum is an important landmark as it was one of the very first public parks

in the country. Parts of it were used in Ken Russell's film of the novel Women In Love.

So will I fall in love with today's bricks and mortar?

It's certainly looking appealing. £55,000 plus was the guide price for this -

a two-bedroom, semi-detached bungalow. Let's take a look.

A broken bathtub isn't really my idea of a pleasant garden water feature.

The outside certainly needs a good tidy up, but the building itself looks in good shape.

So what sort of layout is in store?

There's a little entrance area here which is always useful, somewhere to hang your coats.

And then a pretty standard layout for a bungalow.

A main central area off which the rooms spread.

Bedroom one at the front there, bedroom two, a nice size there.

It looks like somebody's taken off some of the plaster. Yes, right.

It looks like a renovation has been begun and not quite finished yet, but that can be not a bad thing,

especially if it's all the hard manual work of stripping off what was on the walls.

So not necessarily a bad thing, although it's off-putting to see it.

But through into this room, your living room, not a bad size. And we're not finished yet.

You've got a big set of patio doors leading out into this little conservatory area

and onwards into the garden. It's only a single skin, so not really very damp-proof,

but it's a useful little bit of space and then continuing our tour of this little bungalow

we complete the circuit in the kitchen. Again, walls have been stripped.

Units have been taken out. That does bring up one very important point.

It's not a fully-functional kitchen.

You'd have a devil of a job getting a mortgage on this place, but at least some work is done.

And you've got a very interesting canvas on which to paint your masterpiece.

Or rather plaster your masterpiece.

# Faster, faster, plaster casters Are you wasting time

# Faster, faster, plaster casters Who's the next in line? #

If you're not a plasterer and most of us aren't,

don't underestimate what a big job this will be or how much it'll cost.

Make sure your budget covers that as well as the price of a new kitchen and bathroom.

You also need to be careful that it is mortgageable.

There are many conditions lenders can insist on and here it's not just the kitchen that may raise eyebrows.

On the plus side, the property is already kitted out with central heating and double glazing,

so you won't get too cold while reassembling the walls.

That's inside covered, but what about out back?

At the rear of the property, a bit of a hotch potch of buildings with a bit of an extension,

but one thing you certainly have got is space!

A really nice-sized garden and also, I think,

enough room to do a bit more impressive an extension, coming out

and maybe even going up into a dormer like a couple have done.

With all this space and the attractive guide price of £55,000, there's a lot of potential

to make this two-bedroom bungalow bigger and better.

-# I've just got to make it better

-Got to make it better...

-#

We invited the auctioneer who sold it along to give his opinion on the best option.

This is a bungalow that's been occupied by somebody fairly elderly for quite some years.

I think you need to be careful what you spend. Properties in this area have a limited ceiling value.

But providing you don't pay too much for it, it's got the makings of giving you some return.

But what is that ceiling price and could this property reach it if given a good renovation?

Whatever you do to this property, it probably has a ceiling value of no more than about £100,000.

That's pushing it to the limit. Probably 90-95 is nearer the mark.

If you put three bedrooms into it, if it is feasible to go upstairs

or somehow you configure a third bedroom on ground level,

you could put another £15,000 or £20,000 potentially onto its value

but you've got a lot of costs to achieve that, so the benefit may actually be almost nothing.

How about if it was put on the lettings market?

This would have a rental value of about £400 per calendar month.

Well, somebody's done the preliminary work for you,

but there is still a lot to be done to make this place habitable. Let's see who fancied the challenge.

Lot number 7. 55 plus is the guide price. Very realistic.

Who's got 50? He has. Thank you. 50,000 is the opening bid.

51. 52. 53.

54. New bidder. 55. 56.

57. 58. 59.

60. 61.

62. 63. 64.

65. 66. 67.

67 thousand and a half.

68. And a half.

69. And a half.

70,000.

70,000. Is that definite?

Do I take that as a "no"? £70,000, then. Once, twice, third time.

It's yours, madam. Thank you.

'So determination won the day and that successful £70,000 bid was placed by community worker Bev.

'She purchased the bungalow on behalf of herself and husband John, a plumbing and gas engineer.

'Those skills will come in handy and this isn't their first foray into property.'

-Bev, John, good to meet you both. Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

-We just wanted another property to add to our portfolio.

-How many house have you got?

-This is our sixth.

-Are they rented out?

-Yeah, they're all rented out.

-So why this particular house?

-It was just an opportunity. It was within our price range.

-I thought, "Let's go for it." That's why.

-What was it that you liked?

The location. We've never had a bungalow,

so we thought a two-bedroom bungalow would be a good property let.

-I didn't actually look inside the property.

-No!

I should know better, shouldn't I?

I thought with double glazing, a combi boiler, a wee snooch around,

-we thought, "It's bound to be OK."

-Yeah, of course(!)

# Naughty, naughty

# Oh, I like it that way... #

'Naughty, naughty Bev! I've said it before, but I'll say it again.

'Purchasing a property without having seen it is a very risky strategy and often doesn't pay off,

'particularly when it starts to throw up financial hurdles.'

We had a bit of difficulty with the mortgage because the mortgage we went for, they said "no",

so we had to go for a light refurb mortgage which obviously cost us a bit more,

an extra 10% on the deposit, so more money to find than we anticipated.

And they have criteria that we have to do so much of the work within a specified time frame, so...

You discovered you couldn't get this mortgage

-in between the time when you've exchanged contracts and completion?

-Yes.

-Tick-tock!

I was in a panic at the time and I was actually devastated

when John came back home and showed me all the pictures that he took on his mobile phone.

-I thought, "What have I done?" My heart sank.

-Did you have to go to a different mortgage provider?

Fortunately, the mortgage provider that we were with,

they just told us that they would have to give us a different product,

so subsequently, it just cost us more deposit

-and obviously, the monthly repayment are much greater.

-Right.

-Yeah, so...

-A few sleepless nights, I imagine?

Very much so.

'John and Bev seem OK about it now, but this could easily have gone the other way.

'Refurbishment mortgages are not necessarily easy to come by,

'but are provided by some companies, specifically for landlords.

'They take into account what the value of the property will be once renovation is carried out.

'Not only must the work be done in a specific time frame, but it must make the property's value rise

'to what the mortgage company have estimated its refurbished price would be

'or the full funding won't be released,

'so all added pressure, particularly for John, as he'll be doing most of the work here.'

John, what will you do to sort it out?

The bathroom first, then I'll do all the plastering, the kitchen.

I think I'm going to try and move the boiler into the loft

to create a bit more room for cupboards and units and stuff like that.

Yeah, just a complete renovation.

-And are you going to help at all with the renovation?

-No.

-LAUGHTER

-I hope so.

I'll pick all the... I'll help with the cupboards and stuff.

-And pick all the faults.

-I'll do a bit of painting. I can do a paintbrush, but not much.

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

-Probably four to six weeks.

Obviously, I'll be doing it between my work schedule,

so hopefully, I'll be here till probably 12 o'clock at night to try and get it done within that time.

What sort of budget have you put aside for the work?

-Well, I'm thinking around 6,000 to 8,000.

-Really?

Or even... At the most, 10.

Right. But you are doing most of the work yourself

-and you are lucky that you've got one of those skills that normally people have to buy in.

-Yeah.

-Yes.

-Congratulations.

-Thank you.

-Good luck.

-Thank you.

-We look forward to seeing how you get on.

-Cheers.

-OK, thank you.

There you go, Bev and John experiencing another very clear reason

why you must look at a property before you buy it at auction

because it's not just a case of what YOU might find when you eventually look inside,

it's what somebody who is lending you the money might find and they may well turn round and say "nope"

which leaves you in a right mess.

Luckily, they got it sorted. Just a small job of sorting out the property now!

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

This is the part of the programme where we go back to find out if all those promises have come true.

-Did our buyers do everything they said they would?

-I think we should go back and find out.

'We're back in Lee, just a mile south of beautiful Blackheath in south-east London.

'Here, Austin and Imran paid 128,000 at the auction for this -

'a supposed two-bed flat in this stunning Victorian building that would work much better as a one-bed.

'They bought it as part of an intriguing business model.'

-So you've not bought this for yourselves?

-No.

We bought this with two or three other clients. They pooled their money together.

We find projects for them, then we project-manage the refurbishment.

They see the project once we've bought it. They saw it last week for the first time.

-You take all the hard work and the stress out of buying property?

-Yes.

-Fabulous.

-Or take the stress on!

Here's hoping the renovation of this place was stress-free for all involved.

We last met them 11 weeks ago.

I can't wait to see if this truly tiny property has now been transformed.

Unsurprisingly, they have delivered and turned this place into a wonderful one-bed

by knocking the previous two bedrooms together

to make a large and light, open-plan kitchen and living space...

..and turning what was the kitchen into the bedroom.

This was originally the kitchen, so there were kitchen units along there which were just disgusting

and here there was a doorway going into one of the bedrooms.

So we decided to make this the master bedroom just because of the size, the light's really nice.

Although the road's there, we're set back from it a bit,

but having a bigger bedroom was definitely the right way forward.

We obviously blocked up this wall, moved the whole kitchen out.

We built in some storage. There's still enough room for a double bed.

The slopey ceiling actually makes it feel really cosy and I think that's important for a bedroom.

With the carpet, in winter, it's going to be a really nice place to come and relax.

Yeah, what we've done to it, I'm really pleased with it.

There are a few things to finish off throughout,

but the flat has been painted, re-carpeted, and has a new kitchen and bathroom suite.

The loo is still separate from the bathroom, but now at least has its own basin.

Overall, this now feels much more liveable and modern.

The level of spec was important. The wooden floor was a key thing.

Spots were a key thing, a nice, neutral kitchen,

so we had to save some money some places and we spent the money on the wooden floors and the spotlights.

And building the wardrobes was expensive. It's just give and take a little bit.

There's little extras like the chrom fittings with the light switches.

They're important just to try and add that value.

It's just about trying not to overstretch the budget,

but making sure the money coming through on the spend is realistic,

spending where people see the value being added, but we did what we coul with the budget we had.

# That's M-O-N-E-Y

# So sexy... #

Ah, yes, the all-important budget. How did that work out here?

The budget went really well. We said before we'd spend between 20,000 and 25,000

So far, we're at the 20,000-mark, so we're at the lower end of the budget

Obviously, there's a few little finishing touches,

but I think we'll come in at the £20,000-mark, so we're really happy with the spend.

-We didn't want to go over.

-We didn't have the money to go over.

That was particularly important for these guys

as it wasn't their money they were spending.

They had hoped to complete the renovation in eight weeks,

but 11 weeks in and there is still a little bit left to do.

We are over the timescale, but we're under the budget, so it's not too bad.

In a few days, we should be completely finished, then it'll be straight on the market.

-What we've done to it, it should sell quite quickly.

-Hmm.

-Hopefully.

With the cost of the property being 128,000, added to a £20,000 spend on the work,

the total outlay here comes to £148,000.

We invited two local estate agents to cast their eyes over the flat.

It's a very nice property. It's not massive, but it's very well laid out

They've done the right things to make it feel big and spacious.

The property is done to a very high standard.

It's nice, very clean, bright, airy.

He's used good space here. He's made full use of good space.

Yeah, very nice.

Open-plan kitchen/living rooms are difficult. Some people like them some people don't.

Years ago, they weren't popular at all. They've become more popular.

The kitchen mustn't dominate the room. I think they've got that right

So they think Austin and Imran have done a great job here, but will the finances prove fruitful?

If they were to consider letting it, how much could they rent it out for?

If I was renting this property,

I believe I would get £800 to £850 per calendar month.

I believe this property would achieve anywhere from £900 to £950 per calendar month.

Yeah, 900 to 950 was my kind of guess on it.

Yeah, if we got about £900 per month I'd be quite happy with that.

A pretty good return on the investment, so that's good.

Those suggestions would mean a rental yield of between 6 and 7.5% which would be very healthy,

but with Austin and Imran ready to move on to their next project

and as well as their clients set on selling, what could it sell for?

If I was putting it on for sale, I'd be looking for it to achieve £180,000 to £185,000.

I would say this property would achieve from £180,000 to £190,000.

-That's good.

-Exactly what we thought, yeah.

We aimed for the 190-mark, so that's in line with what we wanted.

So a potential £32,000 to £42,000 profit to be made after the usual taxes and expenses.

It seems like this has all come together beautifully.

Yeah, it has. It's been quite an easy project. There's only been a slight delay.

-The costs have been good.

-As there's not been too many problems with the project, it's been quite nice.

-I wouldn't mind a bit of a challenge for the next one maybe.

-Don't say that!

'It's destination Derby now where, earlier, we met husband and wife team Bev and John.

'They paid £70,000 at auction for this bungalow

'which they hadn't even viewed prior to purchase. Tut-tut!

'The place needed serious attention and it was up to plumbing and gas engineer John to get down to it.'

So, John, tell me what you're going to do to sort it out.

The bathroom first, then all the plastering, the kitchen. Just a complete renovation.

-Are you going to help at all with the renovation?

-No.

-LAUGHTER

-I hope so.

-I'll pick all the... I'll help with the cupboards and stuff.

-And pick all the faults.

I'll do a bit of painting. I can do a paintbrush, but not much.

It was going to take more than a spot of painting to get this place licked into shape.

Because the property was predominantly bare brick,

they had to take out a light refurbishment mortgage.

One condition of that was that they complete the work in a set period of time, so the pressure was on.

We've come back 12 weeks after we first met them to see if the house has gone from hopeless to homely.

It looks great so far.

Although there are a few finishing touches to be added in here, it's nearly done.

And with it having needed so much work, that must be a huge relief.

I'm glad that the project is now coming to a conclusion

because it's taken a lot of time to actually do.

It's been tough, but I enjoyed it, I totally enjoyed it.

I could come in the evenings, put my ghetto-blaster on and lock into a zone. It was a pleasure to do it.

It makes a world of difference when renovating that you enjoy what you're doing,

otherwise the hard graft can feel like a real drag, rather than a labour of love.

And here that wasn't the only advantage John and Bev had on their side.

Being a Gas Safe engineer, it enabled me to do a lot with the central heating system,

move things about, fit radiators.

We made a lot of savings that way.

The only thing we'll get an expert i to do is the garden because that in itself is time-consuming.

It will be cheaper. The time I could go out working and earning, it'll be easier to pay someone to do it.

-Employ the right people.

-They'll do it in a week. I'd be there for a month!

Ah, yes, the garden. It was always a good space with potential.

Now it's been cleared and is ready for its makeover.

At the front, not much has changed yet,

but Bev and John are planning to make the most of it

by adding off-street parking and tidying up the driveway.

That will make all the difference, particularly to the end value.

They expect, when they finish, to come in at around £10,000 for this renovation.

That was their maximum budget, although they helped keep costs down by getting family members involved.

Even Bev turned her hand to some of the work.

I have actually done some covings myself.

Well, filling in.

-It took you two days, didn't it?

-Yeah, but hey, I did my little bit.

They had hoped to get it all completed in four to six weeks

and we're 12 weeks in, so they have run over,

but they're nearly there and have a pair of tenants lined up for when everything is finished.

This had an impact on the design of particular aspects of the inside of the property.

With this kitchen in mind for the elderly couple,

we decided not to actually have a free-standing cooker with them bending down and everything else,

so we've actually had the hob and we've done the built-in oven which is a nice feature as well.

We've also got the splashback and that's about the only thing left to be done in the kitchen,

then it'll be ready for them to move in in the next couple of weeks.

Bev and John bought the bungalow for 70,000.

When finished, they hope to have spent no more than 10,000 on the renovations,

bringing their total to £80,000.

We invited a local estate agent and the auctioneer who sold it

to give us their opinions on it.

I think it's fair to say

that when you see a property in pretty derelict condition...

That could be overstating it slightly.

..and then you see it renovated, you always realise there's a huge change

and the impression is always very good, so yes, I'm impressed.

I've had a good look round the property.

They've done remarkably well in the time that they've had.

It presents very well. It's been extended at some time in the past, so it's a good size too.

So it's all good so far, but how about the all-important figures?

The couple bought this to let out and have tenants waiting in the wings.

What rental can they expect?

Very rentable, but I think its ceiling value would probably be

something in the order of £525 a calendar month.

500 seems more comfortable, but it's somewhere around those figures.

I think you'd be looking at £550 per calendar month.

I would have expected that sort of rent, to be honest.

We've got a few other properties in the area and that's the sort of...

That's the sort of rent, but this is a two-bedroom, so 500 is a very good rent.

Even that lower figure of £500 per calendar month would yield a healthy 7.5%.

John and Bev's prospective tenants have indicated

they might be interested in buying the property eventually,

so could this be a profitable option?

I think if this went on the market with the outside work completed, and that's essential,

it would have an asking price of probably around £115,000 and I would expect them to achieve close to that

If you put this property on the market, you'd be looking at offers in the region of £110,000.

So, a pre-tax and expenses profit of between £30,000 and £35,000. Sound good?

-That's better than we thought.

-Whoa!

-A lot better than we thought.

-Whoa!

-We thought maybe 90, up there, but I'm pleased with that.

-We're in the money.

It'd certainly be worth considering at some point.

What else does their future hold?

We will try and go to the auction probably again nearer Christmas, so it's been quite good, really.

-I must admit.

-It's been really good. I mean, I'd do this all day long.

Well, John, if you keep going the way you're going, you might just get to.

See you next time with more auction buying stories, some successful, some not so.

-To be continued here on Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.

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