Episode 7 Homes Under the Hammer

Despite all the uncertainty in the market,

people still want to invest in property.

And if you're prepared to take the plunge,

auctions are a great place to start.

Yes, it could be a bit nerve-shredding,

but why don't you try your hand buying a home under the hammer?

Some properties are very popular at auction,

and others, well, they just go unsold.

Yes, so the auction room can be a difficult place to master.

So here's the lots that won the hearts of our buyers

on today's programme.

This place in Bootle is full of surprises, especially the kitchen.

Is it going to be tiny?! No, no, no! Look at it! It's fantastic!

The layout of this Twickenham mid-terrace perplexes me.

A four bed with two singles. It doesn't make much sense to me!

And at this property in Sunderland,

the wallpaper is enough to make you cross-eyed!

Honestly, it is! If you stare at that for a minute, then come back,

it's like wooh, woozy!

All these properties were sold at auction, and we'll find out

who bought them and what they paid when they went under the hammer.

Well done, sold, thank you very much.

Think of Liverpool and what comes to mind?

The Beatles, Ian Rush or Steven Gerrard, perhaps.

Or maybe it's national treasure Cilla Black.

But today, I'm here to look at a property

which harks back to the city's industrial past.

This is Bootle, about four miles outside Liverpool city centre.

Once a thriving area, partly down to the shipbuilding industry.

In fact, at one point, over 30,000 dockers had their homes here.

About 90% of the properties in Bootle were damaged

during heavy bombing in World War II.

But this row of terraces appears to have stood the test of time.

# I'm still standing Yeah, yeah, yeah... #

Nowadays, the area is really popular with people looking to rent,

so it's attracting lots of landlords and investors,

and the property I'm here to see sounds like it might be ideal.

Three bedrooms, mid-terrace and a guide price of just £39,000.

This is it. Let's take a look.

I know three-bedroomed houses here can go for twice that guide price.

From the outside, it looks pretty solid,

so what exactly might you get for 39,000?

So for that amount of money, I have to say I am not expecting much,

but straight through the front door,

and I reckon this is a fantastic find. I love this kind of house.

It's solid, it's got lots of space.

You come in through the front door, a little corridor,

this front living room area here with a big sort of semi-bay window

throwing lots of light. Slightly less light at the back,

cos the window has actually been boarded up.

But you can imagine a really nice fireplace in here,

and the open-plan feel you get

from this being opened up to a large archway is superb.

Under the stairs, a little cupboard. And through to another room -

it's the kitchen. Will it be a disappointment?

Is it going to be tiny? No, no, no! Look at it! It's fantastic!

Yes, it needs complete refurbishment,

but how much space have you got to play with here? I love it!

# I'm in a wide-open space... #

Clearly, there's work to do to freshen this place up,

including double-glazing.

I'd get rid of the polystyrene tiles on the ceiling too,

not least because they're a fire hazard.

But there are no major alarm bells ringing so far.

Well, upstairs and the cavernous nature of the property continues.

We've got a bedroom at the back of the property,

a good-sized bathroom upstairs where it should be.

Front bedroom is a really nice size.

And through into the third bedroom.

Now, the whole house is clearly in need of a bit of tender loving care.

Bits and pieces of plaster falling off.

So, when you're considering this kind of house,

what do you have to do? Well, new electrics while you're on to it.

You'll have to do the plasterwork, check for damp-proofing,

check that the roof is OK.

Add all of that together, I reckon refurbishment of this,

about £10,000 to £12,000.

And you'd end up with the most beautiful property.

And as an added bonus, there's even a rear yard.

OK, so the yard needs a good tidy,

but I reckon there's a healthy profit to be made here

if you could pick this one up for around that guide price of £39,000.

We asked a local property expert

to have a look around and give us his thoughts.

It's a good-sized three-bedroomed terraced house.

A little bit of damage to some of the windows,

but just all superficial, cosmetic,

so quite a cheap refurbishment project.

Once done up, what kind of rental income

might this mid-terrace achieve?

I think the rental figure would be about £500 per calendar month.

Maybe even up to £550, because the rental market is so buoyant.

What if the purchaser were to do it up

and put the property on the resale market?

Once the property is refurbished,

it's likely to achieve £75,000-£85,000.

A great house.

It needs a bit of refurbishment, but a great opportunity.

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

34. It's a large, vacant two-storey mid-terraced,

that's a three-bedroom there, lot 34.

Bid me 40,000. It's cheap. 40 straight in.

I'll take 42 if you want. At 40,000.

41 if you want. At 40,000.

It's going to be sold at 40. Are you all finished at 40?

41, 42.

43, 44.

43 then. 43 seated.

43,000. Anyone else? At 43.

Going once at 43,000. Going twice at 43,000.

44 here. 45. 45, sir, with the smile.

Nice to see you smiling as you're spending money!

45, 46. 47 now.

46 over here, 47 with you. 48, sir.

It's 47 this side of the room. At 47, the bid's in front of me here.

At 47,000, any advance on 47 for the first time?

47,000 for the second time.

All finished on this one at £47,000,

the hammer is up now at £47,000.

Thank you, sir.

That successful bid of £47,000 was made by semi-retired Nigel,

on behalf of his mother-in-law, Jo.

# I know it's all in the family

# Blood is thicker than water... #

Their plan is to do the property up

and use it to generate an income for Jo.

I met them back at the mid-terrace to find out more.

-Jo! Nigel! Lovely to meet you both.

-Thank you, nice to meet you.

Congratulations. Tell me why you wanted to buy this place.

Well, I sold my house in Bowden... my husband died.

And I decided, with my son-in-law's help,

to put the money into property rather than into a bank.

-Right.

-So, it really was as simple as that.

And Nigel was already doing property anyway.

He bought...I think it was four houses

and done them up very beautifully.

So it seemed an exciting idea.

That's how it all started.

With a view to doing them up and selling them on

-or with a view to renting them out?

-I am intending to rent mine.

I think, Nigel...

I started out in this business with the idea of buying to do them up

and sell the houses.

But I ended up renting one house and found that it worked out

-really quite well.

-Right.

I subsequently bought more and that's what I've done.

So what about where you're living now, have you got a new house?

No. No. Actually, when my husband died, he was in hospital

-and he died in hospital...

-I'm sorry.

-..and at that point, I was staying

with my daughter and with Nigel, and it just, I just never went home!

THEY LAUGH So she's moved in with us.

That's excellent!

That arrangement suits them all very well.

With Jo's house let out, it soon became clear that if she sold

her house instead, and invested in properties better suited to the rental market,

she could get a much better return on her money.

So, do you know this area?

And if not, why pick this particular area?

I don't know it at all. Nigel did, because...

I know it well. I used to work not too far away from here and, in fact,

I have one of my properties, it's just three roads away.

-So it made perfect sense to look for more.

-Right.

And this is one of two,

the other one being opposite that came up at auction at the same time.

An absolutely perfect management situation -

do them both up together, rent them both together,

and then we've got three in very close proximity.

-So you've bought another one across the road?!

-Yes.

-Right!

-Indeed!

Two properties on the same street bought by the same person

at the same auction. All very efficient.

If you're going to build a portfolio,

keeping your properties close together does make a lot of sense.

-So, tell me what you're going to do to the house.

-Everything.

THEY LAUGH

Actually, this is the first time we've walked around

and said we need to do this and we need to do that.

But Nigel has already made plans. You've been here, haven't you?

Yes, I've been a few times.

The kitchen needs to be completely redone, as does the bathroom.

All the wallpaper will be stripped.

Where necessary, it'll be completely re-plastered.

My philosophy has been to do it slightly better than the normal

rental market demands, in order that we don't have any void periods.

Keep the tenant happy, keep giving them something that they will

-appreciate, and, in turn, hopefully they will appreciate us.

-Right, OK,

and make it a nice quality property that they will look after it.

Yes, so we will probably spend more than you would think we ought to.

In fact, they've got a generous budget of £16,000-£18,000

and a timescale of around three months.

They also hope to replicate the refurbishment with their other

£43,000 purchase across the road which they bought sight unseen.

We weren't actually able to look around it prior to the auction,

because it had been boarded up and the agent couldn't give us access.

How is it now you've had a look around?

Well, actually, it will overall slightly cost us

-less to do that property up than this.

-Wow!

And it cost us less at auction,

because everybody was that little bit more nervous about it.

-So...

-That's interesting.

We took a little bit of a gamble, but I think it's paid off well.

Well, you're gambling with your mother-in-law's money!

-This is true, yes!

-That's the best gamble, isn't it?!

Much easier than with your own! But I treated it as though it was my own.

Yes.

Let's hope that the gamble continues to pay off,

because with Nigel's help, Jo hopes to build her portfolio

up to five properties, giving her a steady rental income.

And she doesn't intend to take a back seat with the renovation either.

So what's your involvement in the ongoing restoration going to be?

I shall come up with ideas. Nigel, I will say, well, are they workable

or not? Nigel's the brains, I have to say that, and he manages it all.

But you'll have an input for sure?

Well, yes, because I love houses, and, you know, this is why

I watch your programme so much, because I enjoy what's happening

and seeing a sort of nothing situation

and, at the end of it, a really lovely situation.

-We're hoping to do that here.

-We are indeed. I'm sure we will.

Well, good luck with this and other ones you're

embarking on, and we look forward to seeing how you transform the place.

-Thank you.

-Thank you very much indeed.

Well, it is almost like Jo and Nigel have got two houses

for the price of one - the one across the road and this one

that we're going to look forward to seeing how they get on refurbishing.

It's a superb property, and with a bit of tender loving care

and that extra bit of cash they'll put into it, I can't wait.

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

This is Twickenham in Greater London, north of Royal Hampton Court

and just a few minutes' drive from rather lovely Richmond-upon-Thames.

This part of the world is all gloriously gentrified and full

of families, as well as being home to English rugby at Twickenham Stadium.

Question is, of course,

will I have to TRY very hard to find a property bargain?!

This part of Twickenham is called Strawberry Hill

after Horace Walpole's Gothic mansion, Strawberry Hill House.

But will today's auction lot there be worth a punnet

or will it just get you in a jam?

The property I'm here to see shares the castle's lovely location,

but it was built in the 1970s and is a little less extravagant.

It's a four-bed terrace on this nicely kept estate

and it had a guide price of £375,000.

It's an unusual property for this area, but the street as well kept.

From the outside, the house appears very promising.

There's an integral garage thrown in, so on first impressions,

it's looking good.

Doesn't really feel like a proper front door.

It also doesn't feel very solid, this house.

The kitchen is extremely disappointing, really small,

even smaller downstairs loo, but at least you've got one,

so I suppose that is a bonus. And just the one reception room.

There's not too much going on in here, not bad for space.

You've got some parquet flooring. Now, personally, I'm not a huge fan.

It's got real sort of orangey overtones.

But there is stuff you can do to it to bring it up-to-date

a little bit more. I actually sanded mine

and then whitewashed it and gave it

that sort of Swedish feel, and it ended up really lifting the room.

You've got double doors leading out to the garden.

Not a terribly huge garden,

but you have got extended living space in the summer months.

That's all I can say, really. A bit characterless, but a great location.

Upstairs in this house, guided at £375,000, there are four bedrooms -

two doubles and two singles. The doubles are a decent size,

but one of the singles at the rear, well, it's tiny.

The bathroom needs a complete overhaul - it's small

and an awkward shape.

But that's not the only thing worrying me about this place.

Now, I'm used to seeing three-bedroomed houses

with two good-sized doubles and one smaller box room.

That's kind of to be expected,

but a four-bed with two singles, it doesn't make much sense to me,

considering you're struggling for living space downstairs!

I don't feel there's a need for four bedrooms up here.

Half of them will look really quite tiny.

Personally, I would look to do a bit of a rejig.

For example, how about knocking down this wall here to make

a lovely big master?

Now, this might make for a roomier living situation,

but I would check with the local agents first,

because it might not be a case of the bigger the better here.

And you don't want to rejig the whole layout,

only to knock money off the value.

# You and me and me and you

# In my little room... #

It shouldn't cost the earth to knock these two rooms together,

if you want to go down that route.

But if you'd like to change the layout downstairs,

you've got to think outside the box.

Right, so there's no room to extend,

so how can we create space inside?

Ah! This is your garage.

Now, since there are no parking restrictions out here,

I think sacrifice the garage,

which most people use for storage anyway,

and turn that space into your kitchen.

Most houses on the terrace have done exactly that.

And I can see why. It's a lot of wasted square footage,

and while it might not add much value to your house,

it would add a lot in terms of quality of your living space.

So I reckon you should turn the existing kitchen

into a utility area or a study, maybe.

And knock the garage through to create a new kitchen.

We asked a local estate agent to take a look around and tell us

what he thought the options were for this mid-terrace in Twickenham.

I'd open the kitchen up into the garage to make the kitchen larger.

On the first floor, I'd definitely keep the bedrooms as they are.

Four bedrooms are really hard to come by,

so making it three would be a big mistake.

Once the house has been refurbished with the new, bigger kitchen,

how much rental income could it generate?

For renting the property in good condition,

it should be in the region of about £2,200 per calendar month

to £2,300 per calendar month.

What about the resale value of the refurbished property?

If you've done a really, really good job, at least £500,000.

And maybe £550,000 if it's particularly special.

It's not a Strawberry Hill spectacular, but this house

is a solid investment in an area that families are dying to move to.

And while there's a bit to do to make the most of it,

you've got scope to add value,

and that really is what developing is all about.

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

Move over to Twickenham now,

well-located four-bedroomed mid-terraced house.

Anyone like to kick off on this?

305.

310. 310, 315. 315.

320. 320. 325.

330. 330.

335. 340. 345.

The bidding crept up over the 375,000 guide price and looked

as if it had come down to being between two interested parties.

392. 393.

394. 395.

396, 397. 398.

399. 400. 401.

402. Have a think.

401. 402. Back in?

402 at the back. Might be near their limit.

402. 403, madam.

404.

403, with the lady. 403, first time, second time.

Third and last time if you're all done.

Sold, 403, to you, madam.

That final successful bid of £403,000 was made by local couple

Pamela and Bill, and I met them back at their new purchase,

along with their very gorgeous dog, Georgie.

# Hey there, Georgie girl... #

Pamela works as a recruitment consultant and has done a course

in interior design, and Bill has worked in the building trade for 40 years.

I wanted to hear all about their plans.

-Congratulations.

-Thank you.

-I bet you're chuffed to bits you've got this property!

-Yes.

Now, why did you want to buy this house?

Well, couple of reasons... it's a really nice family house.

It's a great area.

And I think it's got a lot of potential for a really super house.

So have you bought this as an investment or for you to live in?

I think we've bought it as an investment.

We're not sure whether to rent it or sell it.

But there is also the option we might want to move in

and rent our other house, because it's such a nice house.

Terribly dated, but it's got potential.

-So, Pamela, how well do you know the area?

-Pretty well.

We live in Teddington, so, yes, we know it.

And in fact our niece lives about eight doors down.

-So you actually know this close?

-Yes! We do!

So when we saw it in the catalogue, we thought, this is it.

This is the one for us. It had the right vibe.

# I'm picking up good vibrations... #

Good vibrations are really important when you buy a house

to live in yourself or to refurbish and sell on.

Bill is an experienced builder and property developer and has already

spotted the potential to convert the garage into a new bigger kitchen.

There's going to be a utility room in the existing kitchen,

plus a study area, because it's a family house.

Double doors into the kitchen, so that'll open it up,

and we'll get light from the kitchen window into the hallway,

-so it'll seem bigger.

-It'll really open it up.

And you'll be able to see into other rooms.

It'll give the illusion of a lot more space.

Exactly, and the toilet, there's not much you can do about it,

-the ground floor WC.

-Mirrors.

-Mirrors will enhance it.

-Works wonders.

What will you do with that parquet flooring? Some people love it,

some hate it, it depends which camp you're in.

Personally, the camp I'm in is that it dates it.

This house was built in 1972, and I think it takes it right there.

And some people, at the moment, that's really in,

but I don't think that's the look we're going for.

We're going to really base it on a more contemporary style,

so I don't think it'll be staying.

So, the parquet won't survive, although upstairs,

they plan to leave the four bedrooms as they are, but they'll gain

some valuable space in the bathroom by removing the airing cupboard.

They've got a budget of £30,000-£35,000,

and a team in place to do the work in 8 to 10 weeks.

Pam will focus on the interior design, but what about Bill?

-I used to be hands-on. I'm not hands-on any more.

-A long time ago.

You project-managed, but now he's going to project-manage me.

-And you're going to be hands-on!

-Yes!

Yes, I've got Pamela a nice hardhat and a club hammer

and some kneepads, and say go for it, girl.

Well, good luck with that, Pam,

but this duo do look set to add value here.

I'm very excited to see what it's like at the end result.

-Can't wait to see it.

-Good.

-Thank you for chatting with me today.

-Our pleasure.

It's been lovely meeting you both. Thank you.

-Well done, congratulations.

-Thank you very much.

This is a project for Bill to indulge his passion for property,

and I can't wait to see how they transform the house.

Out with the parquet and in with the practical living space

and very modern feel! Fantastic!

Join us later in the programme to see this '70s house transformed.

Coming up, in South Hylton, Sunderland,

this auction lot proves much bigger than I anticipated.

It's huge!

In Twickenham, Bill has had heaps of clearing up to do.

You end up doing six or seven skips, and the rubbish is never-ending.

But first, in Bootle, Jo has been checking up on her son-in-law.

We've had one visit so that she can make sure she was happy,

which she was, thank goodness.

Back now to Bootle on Merseyside,

to see how things are going at this three bed mid-terrace which Nigel

bought at auction on behalf of his mother-in-law, Jo, for £47,000.

The plan was to generate a rental income to supplement Jo's pension.

-So, tell me what you're going to do to the house?

-Everything!

-Right!

Well, actually, this is the first time we walked around it

and said we need to do this and we need to do that.

My philosophy has been to do it slightly better than

the normal rental market demands and keep the tenant happy,

keep giving them something that they will appreciate.

They gave themselves a budget of £16,000-£18,000

and three months to turn things around.

Well, five months after our first visit,

we're back to see how it's all gone.

Wow, Nigel said he was going to go the extra mile on this one

and he certainly has.

The whole place has been replastered and redecorated, and the new kitchen looks much better.

We completely changed it.

We've actually taken some space off the length of it in order

to put a downstairs toilet.

But we have changed the concept that here,

we did have the door leading outside.

We've instead put the window and made a galley-style kitchen

and French doors out to the yard, which has yet to be enhanced.

But we have tried to equip it completely in the modern style

and we think it works quite well.

The other change downstairs is that what was one big reception room

has now become two rooms again. This is because Nigel

and Jo have rethought how they're going to try and rent out the house.

We started out with the idea of letting this as a family house,

but we asked our lettings agent to come along and get a view,

and he actually advised us to go instead for a four-bedroom

professional let, so that's what we've done.

The new layout, three bedrooms upstairs and one downstairs,

works well for multiple occupancy,

and because it's for fewer than five people in just

a two-storey building, they don't need an HMO licence.

The one big unforeseen was that the roof needed to be replaced.

That meant that the three-month timescale slipped to five.

Nigel has been here most days lending a hand.

But what about his mother-in-law, Jo? Has she been hands-on too?

We've had one visit so she could see it three-quarters done,

to make sure she was happy, which she was, thank goodness.

But, no, she's left it to me.

Here we are.

Good to hear that Nigel has met Jo's high standards.

But how has all of the extra work, new roof, the fourth bedroom,

affected their £16,000-£18,000 budget?

We've increased the overall spend to about £25,000 -

that includes legal fees, though.

But that has allowed us to do the work that we have just talked about.

And we believe it gives us a much better return.

Well, it all comes down to how easily they can rent rooms out

to professional tenants as planned.

Their total spend on the project is £72,000.

We asked along two local estate agents

to get their take on the property.

I think the property has been done to a very good standard.

It's a good spacious property,

and excellent that he's managed to get a downstairs toilet in

and done a really nice job generally throughout the house.

There would be two ways to actually rent this property,

that would be the normal... to say one family,

but you could always use the multi-let idea,

which would be using four rooms.

The problem with that is, you would make more money,

but then it's a bit more difficult to let.

That's an interesting point.

If Jo and Nigel were to sell the property on,

what might it fetch on the resale market?

For sale, we would market this property at £84,950.

And we would hope to achieve £80,000 plus.

If you decide to sell the property,

it would be in the region of £80,000-£85,000.

A sale at 80,000 or 85,000 would give a gross profit

of between £8,000 and £13,000, which isn't bad at all.

Both estate agents agree that Nigel and Jo could rent the house out

to a family for between £550 and £600 per month, but their plan

is to let the four bedrooms to four separate professionals.

What kind of income might that generate?

If you did use the multi-let idea,

you would probably get more in the region of £50 per week per room.

Although I think it might be difficult around this area,

you could possibly achieve £50-£60 per week per room.

£50 per room per week equates to an income of £800 per month,

which would be an amazing yield of 13%.

And if they manage to get £60 per room per week, that would rise to 16%

if they were able to fill the house with tenants all year round.

But the rental market is strong here,

so it does look like Nigel has invested Jo's money wisely.

Those numbers stack perfectly with what we were hoping for,

so I can go back very happily today.

The house across the road is still a work in progress,

but buoyed up by the success of this project, Nigel and Jo are planning

to take on two more properties this year, so what is the secret

to a smooth working relationship with your mother-in-law?

Pick the right mother-in-law!

I'm very, very fortunate that she is a bright lady

and she likes a little bit of involvement,

but nevertheless, lets me get on with it for the day-to-day running.

I think that relationship would be very important.

This is South Hylton, a suburb of Sunderland,

situated on the banks of the Wear, as in Tyne and Wear.

It's got its own Metro station,

so you could be in the city centre within around 12 minutes.

The property I'm here to see is actually two flats.

The guide price was £30,000-£40,000. These are them.

Let's start with the ground one first.

£30,000-£40,000 doesn't sound like much for two properties,

so that's either encouraging or a little worrying.

The ground floor was once a shop, a facade clearly rebuilt

and filled in at some point in the past.

Well, two flats, but only one of me, so I better get cracking.

Wow.

That is WAY OUT THERE wallpaper, that's for sure!

What have we got?

Really nice sized space, if you can see through the interior decoration.

I don't like the fact it's straight off the road into that.

Probably think about putting a porch there of some sort,

or at least a little entrance area, but it doesn't feel claustrophobic.

A good-sized space, and then through here.

But I have to say, don't adjust your sets.

HE LAUGHS

Look at this! Doesn't it make your eyes go all fuzzy!

Who would put...? Honestly, it is, if you stare at that for a minute,

then come back! Oh, woozy! Who would put that on the walls?!

If you've got wallpaper like this on your walls, I apologise, but wow!

Rear area here which is basically, I guess it's your sitting room,

bedroom, bit of weird space. I don't know.

There's a kitchen there, there's a loo - which doesn't half pong -

and a little shower room there.

And then this area here, which I suppose, is your bedroom.

And that's what you've got, door out onto a little rear courtyard there.

Apart from that, wow, yes, psychedelic, crazy, little flat.

If the wallpaper doesn't give you a headache,

trying to rethink the layout here probably will. For me,

it's just not working at the moment.

But one flat down and one to go.

I wonder if the second one will also be a bit of a mindbender?!

Oh, now, that's a bit more like it. Fantastic.

Adjoining that flat is this property.

Originally, linked via this door, which has now been blocked up.

And a bit of the history, that was a commercial unit

that was used by the people who lived in this part of the building.

And this has a much nicer feel to it.

Big, high ceilings, lots of original features.

Yes, very tired and dated,

but this is much more exciting.

Sadly, the further into the property you get,

the less exciting it becomes.

This would have been the kitchen

and, as you can see, it's not in a very good state at all.

Although I do again like the really high ceilings

and you could certainly do something with this space. Kitchen here,

sort of an ancillary room towards the end of the property there.

Any positives?

Only positive as far as I can see is that, of course,

once you've bought the place, you get all the contents,

which does include this rather enticing looking fruit machine.

Is it bad enough to cancel the project? Would you hold onto it?

Gamble it'll pay off?

But no, all in all, I think I'd still take it.

A gamble it may be, but by the looks of it,

there's quite a lot to this second flat,

so onwards and upwards.

Wow. This is incredible. Look at the height of the ceilings. Again!

You've got a little roof light there

to let lots of natural light down into the stairwell.

But what have we got?! Lots of stairs going back here.

A bathroom there and then that looks like it was used as the kitchen,

which is a bit unusual. I'd probably want to put that back downstairs

and have that as a bedroom,

but I like all this quirkiness, all these different levels.

You've got another loo there.

And up the stairs to, well, another little annexe.

An interesting quirky little staircase leading

goodness knows where, and then more bedrooms here. It's huge!

And the first bedroom is a good size, but the second is quite small.

The living room could be a gorgeous space.

It's still got the original fireplace with the surround intact,

and that window is fabulous.

Then up on the next floor,

there's another great size room that is the attic area.

Again, loads of space to play with.

I think this two bed has got the potential to become

a sizeable three-bedroom home

with a separate little rental investment downstairs thrown in for luck.

The flats also have shared outdoor space at the back

which is a real bonus.

At a guide price of £30,000-£40,000, it all seems like a great deal,

but we asked a local property expert along to see if he agreed.

Really big property, it does need extensive refurbishment throughout,

but the potential is astounding, really, because of the size.

Once renovated, what could the lower flat achieve on the current market?

I could estimate that it would be valued

in the region of £55,000-£60,000.

-And the upper flat?

-If we kept this unit, extensively redeveloped etc,

good condition, I could imagine the price reaching around £90,000.

In today's climate, how much do flats rent out for around here?

Per calendar month,

a one-bedroom apartment would reach a return of around £350-£375.

For a two-bedroom apartment,

you are looking to increase that up to about £450.

Well, a bit of a turn up for the books this particular lot.

Slightly disappointing when you go into that first flat,

but come in here and wow, what a fantastic opportunity.

And great to have two units so close by, it makes looking after them

so much easier. Lots of money to be made on this one, I think.

Let's see who spotted the opportunity

when it went under the hammer.

So, you've got a one-bedroom ground floor flat

and a two-bedroom first floor.

I'd like to really start this at £40,000.

Oh, put your hands up, someone! 30 then. I've got 30.

Yes, got to be worth 32 then.

32. 34. 36.

38. And 40. And 41.

42. 43.

44. 45. 46.

47. 46,500. 47.

No? At 46,500. 47.

47 on the wall.

47,500.

48. 48,500.

49. 49,500.

50. At £50,000, with the gentleman on my left there.

50,500.

51. 51,500.

52,000.

52,500.

53. 53,000.

53,500. 54,000.

54,500. 55.

55,500.

56.

56,500. 56,500.

57. 57,500.

And 58. 58,500.

59. 59,500. No?

At £59,000 for the first time.

At £59,000 for the second. £59,000 for the third and final time.

Sold. Thank you very much indeed, sir.

With their successful bid at £59,000,

the new owners are friends and business partners Chris and Khiam.

Chris is a joiner and Khiam works in the gaming industry,

but together, they're building an impressive portfolio.

I met them back at the property to find out

why they wanted this lovely lot.

Chris, Khiam, lovely to meet you both. Congratulations.

-A big house for the money, or two flats!

-Very big.

-So tell me why you wanted to buy them?

-We're quite local,

and the strategy is to buy everything in this whole street.

Great, so why the desire to buy this particular street, Chris?

Me, personally, I was born and bred down in South Hylton.

Khiam has lived down the village for a number of years,

20 odd years, and we take great pride in the village itself

and doing them up to that standard.

So how does it work? How do you split roles and responsibilities?

Other than my day job,

I spend...basically one hour I dedicate to the property business

and Chris basically takes care of...from beginning to the end.

I just turn up at the auction, put my finger on the property,

he bids for it, I just sign a few documents etc

and admire his work at the end of it.

I take my hat off to these guys

and their bid to give something back to the local area.

But first things first, what are their plans for this property?

-The initial plan is to turn it from two flats into three.

-Oh!

So we'll be making an extra flat on the rear of the building,

converting this one that we're currently standing in now,

this will become a two bedroom flat with an ensuite bathroom

and everything into that side of things.

The full rear of the building will be a one-bedroom flat,

sitting room downstairs, kitchen at the back end.

Up the spiral staircase, or staircase leading to the upper floor

to a single bedroom and a nice bathroom.

And then what about the existing flat downstairs?

The existing one, as you can see, there isn't a bedroom as such,

so we've got to knock down a couple of walls, move the kitchen

into the big front room which is currently used as a sitting room

and divide that and make that into a bathroom with an ensuite.

And bedroom and everything on that side.

Are you going to get rid of the wallpaper?

-Definitely! Definitely!

-Keep a little patch just for...

Probably frame a little piece just for memorabilia.

And what a difference that alone will make to this flat.

But all of this work certainly won't come cheap.

-The budget is round about £35,000.

-What about timescale?

Round about four months.

If we need planning permission, it could stretch to five or six.

What's the plan once it's all done? Is it to rent them or sell them on?

Add them to our rental portfolio. The plan is to do them

at such a level that the quality of the finishing, that when the time

does come to sell, we don't have to touch them, and just pass them on.

But the market at the moment is not quite right.

Congratulations, good luck. We look forward to seeing how you get on.

Thank you.

Well, it's wonderful

that Chris and Khiam take such pride in the place where they live.

I think they've certainly got themselves a great property here.

It's going to be very interesting to see

how they go on converting it into three flats.

Will they get the planning permission they need

and will it in fact go to plan? You can find out later in the show.

So, have our fearless developers emerged victorious?

Or have they floundered in the shallow end?

Now is the time to find out.

Time now to return to Twickenham

where earlier in the programme, Bill and his wife Pamela

bought this four bed, 1970s' mid-terrace for £403,000.

Bill is a builder

and Pamela is a recruitment consultant and interior designer.

They live locally and were going to refurbish the house totally,

converting the garage into a kitchen and redesigning the dark interior.

There's going to be a utility room in the existing kitchen,

plus a study area, because it's a family house.

Double doors into the kitchen, so that will open that up.

-The toilet, there isn't much you can do with a ground floor WC.

-Mirrors.

-Mirrors will enhance it.

-Works wonders.

Well, it's now three months later.

Back at the property, Pamela and Bill are keen to show us around.

The house has new windows throughout, and you instantly

notice that the garage has been converted into the kitchen.

It's all very well equipped with lovely French limestone tiles

and a separate utility room opposite the refurbished loo.

Across the hall, the former kitchen is now a study.

The tiled flooring continues into the living room.

The original French doors now open out onto a decked area

and the refurbished garden, as Bill explains.

The garden was really terribly overgrown.

It had been neglected for over a year and a half, I should think.

We turfed it, dug up everything, an amazing amount of rubbish came out.

You think you'll get away with one skip,

but invariably, there's so much stuff, that you end up doing

six or seven skips and the rubbish is never-ending.

Back inside, the new layout has really opened the house up

and lets lots of light in. Pamela is delighted with the finish.

As you can see, we've been extraordinarily busy

from replacing windows to making a garage now the kitchen.

We have a study, utility room, fantastic living dining room,

and I absolutely love the French limestone. That's my favourite.

Upstairs, the four bedrooms remain - tastefully decorated by Pamela.

And the bathroom has been refitted to a very high spec.

Bill has moved the water tank to the loft and installed

a separate shower and he's managed to squeeze in a new airing cupboard.

The space for the linen cupboard was stolen from a slight quirk

in the smallest bedroom. Where the cupboard was before,

then we've made that into a nice shower,

so now we've got a proper shower, proper bath, it works very well.

Bill discovered he'd have to strip out the original 1970s' plumbing,

so what effect did that have on the budget?

The original budget was £30,000-£35,000,

but with the problems that we had in the old '70s build

and making it comply and putting everything in, we went up to £39,000.

A bit of an overspend, but these two have worked well together.

Pamela does all the colours and the designs.

I get to do the building and make the creative side of it work.

I've come along and I hope I just complement what he does

and just make it acceptable. Most people would come in and go,

"This is really nice, I can make it my own."

The refurbishment took 10 weeks in the end,

and Pam and Bill have created a stylish and contemporary house.

But they're both reeling from some recent very sad news

that they had to cope with about their dog.

Georgie had a heart condition

and she's been poorly for just over a year,

and she died five weeks ago.

We've got some great memories of her here, actually, in this house,

sitting in the grass, so it was very sad,

but she decided she'd had enough.

I'm so sorry to hear that.

But glad to hear they have happy memories of her

in this property they've worked so hard on.

Well, time to find out what two local estate agents

think of the house now it's finished.

I think the property has been finished to a very high standard.

The limestone floors and the nice modern white-style kitchen

are finished to a very good standard indeed.

I love the way they've brought more space to the property,

the way they've extended the garage, so you do have

an extra large kitchen and you have this really nice reception space.

There isn't many four bedrooms on the market just now.

Because this is finished to such a high standard,

they could definitely set a precedent for the road.

How much did the estate agents think the property could command

on the open market?

Bill paid £403,000 at auction

and the budget has topped out at £39,000

making a total of £442,000.

In terms of a sales valuation,

I would recommend putting this on the market for around £550,000-£575,000.

I would market this property for £585,000.

That valuation range of £550-£585,000 would mean

a gross profit of £108,000-£143,000

before the usual selling expenses.

-Ooh!

-Ooh!

-Excellent.

-That's good news.

-Yeah. Very happy with that.

The couple were toying with the idea of selling

or even moving in themselves,

but have decided to let it out to tenants,

so how much income could they get?

I would recommend putting this property on the lettings market

for £2,800 per calendar month.

We'd rent this property for £2,000 per calendar month.

Quite a difference in opinion there.

Meaning those rental values could give an annual yield

of between 5.5% and 7.5%.

That is a discrepancy, but we believe that it's the quality of the build

and the location for the schools and everything,

it's worth £2,800, approximately, a month.

And since we filmed, they've secured a tenant who will be

paying £2,380 per month, which is in between the two valuations.

So, they can be very proud of what they have achieved here.

We're really pleased with how it's gone,

we really like the end product. It's a great family home now.

We're back now in South Hylton, Sunderland,

where this pair of flats sold at auction for £59,000.

I met up with business partners, Chris and Khiam,

who were planning to turn the two flats into three.

They already owned several other properties on the same street

and were doing their best to improve the housing stock

in the village they grew up in, one property at a time.

So why the desire to buy this particular street, Chris?

Me, personally, I was born and bred down in South Hylton,

Khiam has lived down the village for 20 odd years,

and we take great pride in the village itself...

-Right.

-..and doing them up to that standard.

So, did they manage to polish up these properties enough

to make the village proud?

We're back just four months later to see how they got on.

They have indeed managed to convert it into three flats.

First up, let's check out

the one-bedroom flat on the ground floor.

The living room which was at the front of the property

has been cut considerably in size to create this smaller bedroom.

And thankfully, all that crazy wallpaper has gone.

In the old configuration,

the front door opened straight into the living room.

But now, because of a new wall, you gain access through the kitchen,

utilising the remaining part of the old sitting-room.

Previously, there was a kitchen

and this oddly shaped room at the back of the house,

but a wall was removed and the kitchen ripped out,

allowing for a much larger living room to be created

with a toilet and shower off to the side.

The flat may not be quite finished,

but it's on its way to being a well-designed, one-bedroom property.

This room here used to be the original flat

which we put partitioning walls in to create...

obviously, divide up the two rooms,

put suspended ceilings into it, altered the gas supplies

for the utilities for cookers and stuff like that,

installed new sinks for the plumbing,

so much bigger spaces throughout the flat, bigger lounge...

created a decent sized bedroom,

a decent sized wet room and shower which has in turn created

a decent enough finish which we're really happy with.

Obviously, good-sized kitchen as well as the rest of the size of the rooms.

Back outside is the entrance to the other two flats.

And the first is at the rear of the property.

Downstairs are the living room and kitchen

with access to the shared garden.

And up the spiral staircase...

..there's a bedroom and great sized bathroom.

All in all, it's another good-sized property.

So that brings us to the third flat which is a two bed,

accessed from the front entrance through the door on the right.

The single bedroom has been redecorated.

The master bedroom has been divided

to give a good-sized kitchen and bathroom.

This room used to be a large double bedroom,

and we've actually split it into two, converting half of it

into a family sized bathroom and the kitchen on the other side.

I think we've done a good job with it.

But it's up the new spruced up staircase to the loft

where you'll find the jewel in the crown -

a spacious and light master bedroom.

The place is looking amazing. Who would have thought

that by making a third flat out of the original two properties,

you could make them all feel better proportioned.

So what works exactly have been done here?

Rewiring, re-plumbing, replastering, damp coursing, new roofs,

new windows. Basically, left the shell of the original

and just built everything new from the inside.

And what a great result. Chris and Khiam were fortunate enough

not to need planning permission for the conversion.

This was mainly done by adding or removing internal stud walls.

As the building was already registered

as a house of multiple occupancy,

they discovered they could do it all within building regulations.

The hardest jobs were the electrics and sorting out the plumbing

to each individual flat,

and that's where trusted trades stepped in.

But there's still a bit to do.

The project is almost 90 % done.

What's left is basically the cosmetic stuff.

Paintwork, joinery, the finishing of the bathrooms,

just double-checking everything and skirting boards,

and in about two weeks, I think we should be done.

The boys were delayed in starting the project,

so they will overshoot their 3 to 4 month timescale, but not by much.

What about their £35,000 budget?

The budget has kind of risen slightly.

We originally estimated it to be around the area of £35,000,

but we have already spent £37,000,

and we think another three is required to finish the flat off

and hand them over to the tenants.

If they do end up spending their estimated £40,000

on the restoration, that will take the total outlay here to £99,000.

The big question is, was it all worth it?

We invited along two local property experts to give us their views.

I think the gentlemen have done a fantastic job

with the properties, redeveloping them to a high standard.

It looks like the kitchens, the bathrooms in all the actual flats

are a decent quality and they should attract good tenants.

They've been converted well.

They've sort of used a lot of good materials, nice bathrooms,

nice kitchens, been decorated to a good standard.

Well, that's all really positive.

Chris and Khiam should be very proud.

But how much do they think this whole property could make

collectively in rental income?

As a rental income, I would estimate about £1,200 per calendar month.

For all three flats, I would say that he could achieve

a rental in the region of £1,200 per calendar month.

Yep, that's higher than what we anticipated.

Yeah, we estimated about £1,100, so that's good.

It sure is good! That's a potential yield of 14.5%

if they can rent out all three flats.

If all three properties were sold as one job lot,

what could they hope to achieve in today's market?

In a resale, I would estimate a value of about £175,000.

In terms of resale for all three flats,

I think he's looking to achieve in the region of £155,000.

-That's good.

-It is.

-We were expecting,

we thought about £140,000 would be a good selling price in this market.

They've done much better than they hoped.

A potential gross profit of £56-£76,000

minus the usual selling expenses.

So with this successful development under their belts,

what's next for these Sunderland property tycoons?

We most definitely will keep on buying from auction.

We've bought in the past, and especially with this property,

we've had good success,

and I think we'll continue down the auction route.

For now, it's been the most successful route we've taken.

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

Yes, join us next time for more Homes Under The Hammer!

-See you then.

-Goodbye.

-Goodbye.

Subtitles by Red Bee Media Ltd