Episode 73 Homes Under the Hammer

Hello. Welcome to the show. Now, despite changing market conditions,

people still want to get a slice of the property action.

If you're prepared to take the plunge,

auctions can be a great place to start.

It can be fast, it can be frantic, but it can also be brilliant,

buying your home under the hammer.

Now, if you've decided to take a gamble and place

a bet on property developing, you may want to go to the auctions.

Mm. The atmosphere is electric.

The action is fast and furious.

So, here's what people bought on today's show.

I unearth a potential treasure in London.

These don't come along every day on the open market.

What an opportunity for somebody!

In Nottinghamshire, there's an auction lot

where there's more than just a house on offer.

It could just be enough to attract a different kind of buyer

to this property - a developer.

And, in the north-east town of Gateshead, it seems

the area is definitely on the up.

However, given this is a basement flat I'm here to see,

I'm on the way down.

All these properties have been sold at auction.

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

when they went under the hammer.

Sold!

What can I tell you about Wimbledon that doesn't involve tennis?

Well, the actor Oliver Reed was born here and Marcus Mumford,

of Mumford & Sons, went to school here.

# Weep for yourself, my man

# You'll never be what is in your heart... #

So, will the property I'm here to see be sound,

or more of a wild card?

It's an old adage but one that is so, so true.

What do you want when you're looking at property?

The worst house on the best street.

Because then, the only way for the value to go is up.

And the property I'm here to see, well, that's a case in point.

Three-bedroom mid-terrace and it had a guide price of 495,000.

Well, this is the worst house on the street.

What a renovation job!

Look at it! The walls have completely blown.

You've got a pocket full of lathe and plaster here.

Look, it's just completely crumbly.

You can tell it's lathe and plaster because of all the old horsehair.

The front door, nobody likes to see that.

It's stunning yet also scary.

You've got beautiful features like that cornicing in there.

Big, lovely windows. But, look at this,

years and years of layers and layers of old wallpaper.

You've got a lovely second reception room through here.

Again, with fireplaces. All this original wood. You can smell it.

It's absolutely beautiful but in a right old state.

The panelling here. Look at this!

I would love to sand that down, really bring that back to life.

Now, towards the back of the property,

this is where it gets really bad.

It stinks of damp. You can see the paper's peeling off.

I mean, just look at that!

This is quite interesting.

Outside, the level is so much higher.

And, obviously, that's where all the water's coming through -

causing all this damp.

This place hasn't been touched. Look at this! This is an old gas pipe.

Many, many years old. That's where the flame would have been.

It's stunning. You've still actually got coal out there,

in the coal store. This would have been the scullery.

The little sink's out here.

It's just mind blowing to see something like this.

You know what, these don't come along every day on the open market.

What an opportunity for somebody!

But properties like this could easily become an obsession

with the heart ruling the head.

With absolutely everything needing to be done here,

it will need a brave soul to take it on.

# Brave boy

# Brave boy

# You are fine in every way

# Brave boy... #

So, time for a reality check.

Yes, the front room has a lot of character

but also a lot of crumbling.

The second reception room has fabulous features

and frightening ones.

As for the gigantic garden, it's a horticultural horror.

It's all getting a bit scary.

So, time to do what you should never do

in a horror film, venture upstairs.

Well, up here, on the half landing, I cannot quite believe

somebody's tried to patch the ceiling up with newspaper. Look!

It's like a quilt. There is so much going on up there.

But it is quite reassuring to know what is going on.

There's obviously massive leaks. Water's pouring through.

Somebody over the years has tried to put that back together

but it's not working and it's going to need sorting out.

And, through here, there is daylight peeking through.

You can see there's a hole in the roof. A little bit scary.

Very, very daunting indeed.

But, interestingly, it still has got those beautiful features -

the spindles, the lovely wood that's used here.

Not quite sure what this is. Is it holding the wall up?

Is it holding the staircase together?

I'll have to pass on that one.

Really lovely bedroom.

Two whacking great big holes in the floor boards.

And, again, a stunning bedroom.

Look, you've got these beautiful windows letting in lots of light,

although the skirting board's coming apart, the floor's dipping.

There's another great big hole over there.

The wall's crumbling down but, hey, let's not worry.

Because I still love it.

# Love. Woo oo

# Love is strange

# Oo oo

# Lots of people, whoa oh

# Take it for a game... #

You'd certainly have to be game to take on this project.

At the rear, behind the half landing, is another bedroom,

bathroom and a loo.

As with everything else, all in desperate need of repair.

This is a virtually untouched Victorian home.

OK. It has a gaping hole in the roof, an overgrown garden

and rotten windows, but, did I mention? I love it.

This could be an amazing restoration project

and there's room for expansion.

With planning permission, the downstairs living area

could be extended at the side or across the back of the house.

Or you could go up into the loft where it's got a roof, of course.

This is a project that needs a big heart and a big budget,

even if you got it at anywhere near the guide price of £495,000,

it could easily become a money pit.

We asked along a local estate agent to tell us what she thought of it.

I was very excited to come along to this road.

Not very many properties come up here.

I was very interested to see this one.

Obviously it's very, very neglected. But, you've got so much scope here.

The size of the rooms. The amount of original features here.

The location. Obviously, it's going to be a huge project for someone

but in the right careful hands, this could be absolutely amazing.

But, could it see amazing financial returns?

I think it's really worth considering extending the property.

Both out into the garden.

Equally so, if you were to go up another level, you would bring

this property into a completely different level of price bracket.

Extending this property on top of the necessary remedial work

would be a massive undertaking.

Would it be worth it?

If you really went to town and extended the property, I would

suggest you would certainly market the property round about £850,000.

What about rental?

I think that we would certainly market the property

at around about £3,000 to £3,500 per calendar month.

I don't think I need to harp on about the blindingly obvious -

that this home needs masses of work -

because that, to me, is the appeal.

An unrenovated time capsule of a house that could be

utterly beautiful and make some serious profit at the same time.

Let's find out who went for it at the auction.

475. It's worth that all day long.

475? 475 standing up.

480 in the aisle. 485.

490. 495.

500.

This proved a popular lot in the auction room.

So, we rejoin as bidding reached 585,000.

585. Yeah?

590. What's that? 587.

588. 589.

590. 590 at the back now.

591?

590 at the back. First time. Second time.

Third and last time. Are you all done?

Sold, 590.

That successful £590,000 bid - 95 grand over the guide price

was made by Nick, who was at the auction with his wife, Robbie.

Nick's a chartered surveyor, dealing in commercial properties,

and enjoys residential development as a sideline.

Sounds like he's just the person to take on the challenge

of this piece of Victoriana.

Nick, congratulations!

Was this house really worth spending nearly £100,000

-over the guide price?

-I think it was.

At the auction, almost everything was 100,000 over the guide price,

-if not more.

-What was it about this house

that you wanted and loved so much?

It was a great opportunity to work with something in this condition.

-What's your background?

-I work in the commercial building environment.

And that's... I am a surveyor by trade.

So, I've got some advantage on that front, I hope.

When you walked in the front door, what did you think?

Oh, my God, what a mess! Like anyone would.

You do think, "Oh, my God, what a mess!"

-But then you think, "Wow, what an opportunity!"

-You do.

You also think this is going to put a lot of people off,

so, hopefully, it's got some profit in it somewhere.

Nick wasn't put off, as just like me,

he focused on the real potential of this property.

He's going to project manage the renovation

and bring in a trusted team that he's built up

over the last six to eight years of developing to do the work.

So, what has he got in mind for this palatial pad?

This needs another bedroom and bathroom.

So, a loft conversion to get that.

We're either going to push further out the back or out the side.

That I'll know on Monday when I sit down with the council.

-What would you rather do?

-I'd rather go on the side.

This needs to be a kitchen/family room. The garden is brilliant.

You can't see it from here.

So, you know, a glass folding door or something like that.

You've got to do everything here.

I don't think there's a single piece of this building

-that won't be touched.

-Why did you want to take something like this on?

There are so many other buildings you could develop that will not

be so intense, such hard work, and be a money pit.

-This is going to just drain the pocket.

-Absolutely!

-I've set a budget. I know what that is.

-Go on, tell me.

-I've got 100,000 to spend on this.

-100K, that's what I was thinking.

-Maybe more.

-It needs not to be more.

That's it. You're like, don't scare me, Lucy. 100 grand, that's it.

Joking aside, it's good that Nick has a clear budget

from the outset because in a house of this size,

you could easily find yourself getting carried away

and overspending.

He's aiming for a 20-week timescale, which may sound ambitious

but he's got years of experience behind him.

Once the work's been done, he has got some decisions to make.

Lots of options. The first one is,

I'd like it to start washing its face.

So, rent it. Second option is to test the market.

And maybe sell it.

The third option is to sell another house and move into it.

So, it depends how much you fall in love with it, Nick.

I like Wimbledon, I like the area. I've lived around here before.

So, depending on how well you do this,

there is a little cheeky chance that you might want to move in

-with your family.

-There's always a chance. I like these old houses.

The last one we did, a total mess - similar to this.

We were going to sell that but I'm living in it now.

-And you're still living in it!

-Still living in it.

I cannot wait to find out whether you're going to end up

living here with your family. Congratulations. Well done!

So, I think there's quite a large soft spot

in that hard developer's heart for this place

and I'm delighted there is.

Although Nick has a mega job on his hands,

this could be a very special home for someone.

Find out who's moving in later on in the programme.

Welcome to Woodborough in Nottinghamshire -

a charming little hamlet just over five miles from Nottingham.

It offers great properties, surrounded by fantastic countryside.

Well, great rural location and this is the property I'm here to see.

It's detached, three bedrooms, at a guide price of 195,000 quid.

Which, actually, given that it's got a large plot of land with it,

I think is good value for money, although the auction catalogue

does say it needs a scheme of refurbishment and repair.

Judging by the state of the garage alone,

I'm a bit concerned about what I might find inside.

Uh-huh! Well, I like the layout.

Straight through the front door, stairs up to the bedrooms

and you've got a half decent sized corridor here

with lovely parquet flooring. Clean that up

and it would look amazing. Front room there.

Open fire. Very 1930s fireplace. We like that.

No, really, I could live with that, for sure.

Kitchen at the back here, very small for the size of house.

It's sort of just tucked away.

I'm thinking straight away knock down this wall, or at least

put some kind of archway in to create a lovely kitchen/living area.

This is room at the moment - this rear living area -

I'm not quite sure what you'd use this for.

So, yes, knock that through. A really nice-sized space, then.

Because you'd then have a great set of double doors,

Out into this little conservatory area - where the boiler is -

very odd. But straight out into the garden, as well.

This would be an absolutely gorgeous part of the house.

I bet you'd spend most of your time here.

Mind you, on a day like today,

this conservatory really is looking a little sad, and much like

the rest of the house is in desperate need of some tender loving care.

# Try a little tenderness... #

This place has been treated with anything but tenderness.

It's been empty for six years and has been vandalised.

So, it really is quite a sad sight.

On top of that, it's obviously not wind or water-tight,

and, inside, it feels as cold and damp as the weather outside today.

I'm just hoping upstairs might raise my spirits.

# Candy You're the girl I can't forget

# Though we've hardly ever met

# I've always longed to hold you... #

Well, the candy pink wallpaper might be meant to create cheer

but it's not really doing it for me.

But, on a sweeter note, the layout is good

and the bathroom's a decent size.

And, it's upstairs, which is always a plus.

There are worrying cracks and, of course, the ubiquitous damp.

I think there's quite a lot to chew over before anyone takes this on.

For me, the best thing size-wise about this property

is this huge garden.

You're also surrounded by plenty of wonderful, open, outside space.

Well, you certainly can't complain about the rural location

of the property. Just these three houses

and then pretty much nothing all around.

You've got the property itself

and then something, which is really quite exciting.

Up this little lane here, you have this area here -

it's an orchard behind this hedge.

About half an acre.

More importantly, you've got this right of access

to the rear of the property.

Why is that exciting? It's nice to have your own orchard

but, is there a potential for that

to become something like a building plot?

Mm. It's certainly big enough.

We are in green belt land though

so, would you get planning permission for houses?

Highly unlikely at the moment.

You might buy it with a hope that in the future that might change.

In the meantime, it could just be enough to attract

a different kind of buyer to this property - a developer.

So, all sorts of people would have been attracted to this lot.

For the 195,000 guide price,

you'd get a big house, an even bigger garden

and your very own orchard -

all of which need to be brought back to life.

We asked a local estate agent to cast his eye over it

and tell us what he thought.

This property's great.

It offers bags of potential for somebody to come along

and put their own mark on it.

It's a very traditional styled family home

that would benefit from a scheme of improvement

and maybe an extension to either the rear, the side or even both.

It's a great canvas for someone to put their own mark on it.

What kind of return could you expect on any money spent

doing this place up? Let's start with the potential rental value.

Following a scheme of improvements,

if this property were offered to the rental market,

I think it would achieve a rent of £900 per calendar month.

This property offers all sorts of options,

just what could its potential value be?

Following a scheme of improvements, I think this house could be worth

somewhere in the region of £270,000, as one dwelling.

Should a potential purchaser explore the possibilities of building

additional dwellings to the rear, that could be considerably more.

Well, it's a good location

and a property with absolutely bags of potential.

Yes, it will need quite a lot spending on it to get it sorted out

but with that land around it, and just the character

of the place, I think it's a really exciting one to see developed.

Let's find out who bought it when it went under the hammer.

Lot 47. 195.

195 I have as a starting bid.

£200,000. Five.

205. 210, sir.

210. 215. 215. 220.

It's against you at £220,000.

21. 21. 22.

223. 224.

25. 225. 226.

27. 28. 29.

229. Out! Or is that a half? Out!

229. £229,000.

Going once, twice, third time.

Sold. It's yours, sir. 229,000.

That successful £229,000 bid came from Terry,

who attended the auction with his neighbour.

As well as running his own car repair business and MOT station,

he also has a few properties that he lets.

But, as I discovered, Terry and his family -

one of whom is his daughter Billie here - have their own special reasons

for wishing to get their hands on this particular place.

-Terry, good to meet you.

-Good to meet you.

-Congratulations!

-Thank you very much.

-Tell me why you wanted to buy this place?

My property surrounds the orchard at the back.

And anybody could have bought it.

-They could have built some houses on the back.

-Right!

How would that have affected you if they had?

I'd lose my right of way, which I didn't really want.

-It just encroached on my privacy really.

-We're in a very rural area.

-How long have you lived here for?

-31/2 years.

Presumably, the rural nature and the peace and quiet

-was something which attracted you in the first place.

-It was, yeah.

You must have gone to the auction fairly determined then.

-Yeah, I was determined to have it, yeah.

-At any price?

-Yeah, just about.

-Really!

-Just about, yeah.

What do you think about what you paid for it in the end?

I paid too much money, there's no doubt about it.

I paid a little bit too much money.

But to have the peace of mind

and nobody else living here in the orchard, is good.

You say nobody else living here.

It's a house. What are you going to do with it?

There'll be somebody living in this house

but there'll be nobody living in my orchard, will there?

-So, is the idea to rent this bit out?

-It is, yeah.

Terry lives in a nearby property.

Although spending £229,000 may seem expensive just for peace of mind,

he clearly thinks it's worth it.

Of course, he also hopes to make the house work for him financially too.

He keeps these beautiful horses, which his daughter, Billie,

helps to look after.

With the family's quiet rural lifestyle here,

you can see why they wanted to keep it like that.

However, he certainly won't be able to keep his new house as it is.

Tell me what you're going to do to the house to sort it out?

Get it all stripped out for a start. All the repairs will be done.

I'll put a new stone fireplace in here. A log burning stove.

Revamp the kitchen. Knock the conservatory down.

Rebuild the garage. I'm going to spend probably 15 grand on it,

which takes it far over budget really.

-But, it don't really matter.

-Right! Because?

I've got the house and the orchard, haven't I? That's what I wanted.

And, perhaps, you can't put a price on that.

He's set a six to eight week timescale

although I do think he'll find that £15,000 budget tight,

particularly as replacing the decrepit bathroom

didn't appear on his list.

Terry will do a lot of the work himself and already knows

professional tradesmen he can hire in for the rest.

While I was here, I was keen to see more of the land

Terry was so determined to protect.

So, this area here is owned by the property.

-That's the orchard you're talking about?

-Yeah.

The likelihood of that being really converted into properties, though?

Well, they're building a wind turbine 217 ft in greenbelt

down in the valley, so...you never know, do you?

-You never know.

-It would always have sort of...

It would have played on my mind really that if somebody bought it

-they could have done that.

-Right!

So, what are you going to do with that bit of land?

I don't really know. Clear it up.

Probably put a big pond in it and put some ducks on it.

And that's about it really.

There's not a lot you can do with a scruffy old orchard,

apart from tidy it all up, and make it look nice.

But you've almost created a sort of a moat of land around your property.

Yeah. That's just what I wanted, really. Probably a bit selfish.

But, as I said before, I didn't want nobody in my space, really.

-And you're going to get the rental income from the property.

-Yeah.

Well, congratulations, good luck!

I'll look forward to seeing how you get on.

So, what price privacy?

Well, in Terry's case, it was worth nearly £250,000 to him

to make sure that nobody does something untoward

with his orchard and the area around his house.

Lots of work to be done. Can it be done for about £15,000?

You can find out later in the show.

Coming up in the North East town of Gateshead,

there's a property that, um, puts a spring in my step.

Some very dodgy floorboards.

Back in Nottinghamshire, it seems Terry's been splashing the cash.

Way over budget but I'm not particularly bothered

because it looks so good.

But first we return to London where Nick hasn't held back on his spending either.

The room you're seeing is known as the £50,000 room.

We're wending our way back to Wimbledon, where earlier we met Nick.

He'd gone £95,000 over the guide price to purchase

this three-bedroom Victorian terrace for 590,000 at the auction.

I absolutely loved this place, though it wasn't going to be news

to anyone that it needed a total renovation.

But Nick was game for the challenge.

-When you walked in the front door, what did you think?

-Oh, my God!

What a mess! Like anyone would.

You do think, "Oh my God, what a mess!"

-But then you think, "Wow, what an opportunity!"

-You do.

You also sort of think, this is going to put a lot of people off.

So, hopefully, it's got some profit in it somewhere.

I think there definitely was potential profit here

if the right work was done, of course.

Nick's plan was to have the whole place finished

with the help of his usual team in 20 weeks.

Now we're back, six months after we first met Nick,

to see if he was, um, victorious.

Now that's what I call a transformation!

There's not a broken floorboard or damp patch in sight.

And best for last.

Where once there was a sink and coal cellar,

there's now a stunning new kitchen.

This is certainly much bigger than just the two rooms

that were here before.

Originally, the house finished about here

and then there was a coal bunker round the back section.

So, all of that's gone.

We pushed out for a side extension right away along the bank

and then a rear end-to-end,

which gave us enough space to put the kitchen in.

The kitchen itself is high-gloss throughout -

nice solid surface tops.

Under floor heating. Plenty of units. It's a nice place.

It would be the heart of the house, really.

The kitchen itself is about 10,000.

The room that it's in is known as the £50,000 room,

because that's where all the expenditure is.

# Oo, money, money.

# Want your money, money?

# Give me that dirt, deniro... #

Which gives me the answer to my next question.

Nick had set a budget of £100,000

and half of that's been spent on the extension and kitchen.

When we first met, he'd said that the total spend

couldn't be over that £100,000.

It was. Um, total spend was 118.

The choices were really,

some of them were needed, and some were mine.

So, the overspend's about 50/50.

Probably £10,000 worth of my choices.

It didn't need wood floors all the way through. Didn't need five Veluxes.

Didn't need LED lighting but I think it was worth it

and there was about eight, nine grand's worth

of additional roof work and steelwork.

So, over budget but happy.

The roof work carried out wasn't just essential for saying goodbye

to the leaks and holes, but also because downstairs

isn't the only place that's had an extension.

Nick has also utilised what was dead loft space to create

an additional bedroom with an en suite and dressing room.

Initially, Nick loved this house and thought he might move in

with his family but he changed his mind.

Instead, he's transformed it

into a very modern, sleek and marketable family home.

So, did he change any of the original period features?

They've all gone. All of them.

When we made the decision to go for rental,

we thought we'd go for a more contemporary feel,

so we went with new windows throughout.

We then decided to pull all the cornicing out, as well,

and keep everything straight lines.

I can't deny I'm sorry to see those fireplaces

and period features go, but they wouldn't have been cheap

to restore or replace, and Nick had to keep his bottom line in mind.

He had also set what sounded like an ambitious

but unnecessarily strict 20-week timescale.

How did that pan out?

The build work was done in 18 and the finishing's five,

so we've gone three weeks over.

You go for a higher spec out the back, it takes longer to do.

So, a little over deadline but Nick seems perfectly happy about that

given the quality of the end result.

And so he should be.

For the amount of work done,

it's still an extremely impressive turnaround.

The cost of the property at the auction was 590,000.

For the renovation, £118,000.

Making the total spend on this project 708,000.

So, it's the moment of truth.

We invited two local estate agents to the house -

one of whom had seen it before work started.

Absolutely beautiful!

Outstanding! The finish is just unbelievable.

What a lovely, lovely house.

As soon as I walked in, I saw the floor

and the finish is absolutely fantastic.

Then, the view that takes you through to the back rear garden

and you see the actual kitchen and the layout is absolutely superb.

And that quality flows throughout the house. Absolutely fantastic!

I think the loft conversion is absolutely great.

For any lady to have a dressing room as well as an en suite,

has got to be heaven.

They love the place.

But will the value reflect Nick's spend here?

If I had to put the property on the market for sale,

I'd expect it to achieve £850,000.

I think this will easily achieve £850,000.

I think you could even put it on for found about £875,000

and see what happens.

Higher than I thought. So, very happy if that's the case.

At the moment, I'm still staying with rental

but good to know where the finish line is if we need to sell.

That finish line would make Nick a pre-tax and expenses profit

of between 142,000 and 167,000.

But his plan is to let it.

Per calendar month, I'd expect this property to achieve £2,800.

I think this property will easily achieve £3,000 per calendar month.

I think that's exactly what it should be, so, really happy.

Overall it's a good result for us.

It sure is.

And the property has been put on the rental market already.

Having decided not to move in himself,

will Nick be sad to say goodbye?

Particularly to THAT kitchen.

The £50,000 room has become the joke of all my friends.

We're quite proud of it.

I think, before someone moves in, we might even use it.

Gateshead on the southern bank of the River Tyne is benefiting

from a major regeneration programme.

I, for one, can't wait to see what's yet to come.

All that investment is having a welcome knock-on effect,

not just on the city centre, but also on the surrounding areas, as well.

With the street getting a facelift, the property is being spruced up.

Well, today, I'm in the Bensham area of Gateshead.

It's very popular with investors

because house prices tend to be low and yet rental demand is high.

There has been a lot of improvement recently.

You can see those houses there have been really nicely done up.

Sadly, the property I'm here to see wasn't part of those improvements.

In general, the area is on the up.

However, given this is a basement flat I'm here to see,

I'm on my way down.

# Down in a basement

# Where can you go when your money is low?

# In the basement... #

The guide price was £20,000.

So, could this be a bargain basement?

So, in through the front door and one of the first things

we're going to be looking out for - given it's a basement flat -

is any sign of damp.

They are fairly prone to it.

You don't have to go very far up, by the electricity meter there,

some major signs of problems.

And, even just looking down at the skirting boards,

you can see signs of that dreaded damp.

But, it certainly doesn't feel pokey

when you come through the front door. Nice, high ceilings.

Look at that for a bedroom!

Absolutely huge. So, that's really good.

Down this corridor, the second bedroom there.

That's a half decent size too.

So, in terms of the feeling of the place, with the high ceilings

and everything, it does give it a lovely feeling of space.

Through the property, on the walls, a few more tell-tale signs of damp.

And actually more than any of that, the smell.

It smells damp. That is a real giveaway.

How much damage has been done I don't know.

But, rear sitting room area here.

Quite an interesting layout of this flat

because it is basically a basement flat on the front there.

As you come to the rear of the property, it turns into

a ground floor flat, because of the slope of the land round here.

In terms of the layout again, through there, into this, the kitchen.

It's not huge. It really does need a bit of tender loving care.

Even worse, through here too, what is basically the only bathroom,

of course, in the flat. It's right at the back here.

You access it off the kitchen, so it's not ideal.

That said, apart from the damp,

I think this has the potential to be a really cracking flat.

Yes, there are many things here that are far from ideal

and it will need some work.

But, for that £20,000 guide price, in an area that's on the up,

I think you get a lot of flat for the money.

As it's the bottom flat, it also comes with the added bonus

of an outside area - albeit just a yard.

But there's also access to the rear

and, potentially, more car-parking space.

However, the key to whether this could be a sound investment

may depend not on what you CAN see, but what you CAN'T.

So, you don't need a degree in building surveying,

or a damp proof meter, to realise

there is probably damp in this property.

Somebody here has pulled back the carpet.

It's revealed some very dodgy floorboards.

That is a problem with damp. It's not just the damp walls,

it's the fact that, basically, the joist of the floor

going into the walls at some point, if that's damp, that rots away.

You end up basically having to chop out and replace

a large portion of the floor. So what is this...?

Before I go on, look at that!

It has affected, as I said before, the skirting boards, as well.

What's the solution? There are specialist firms that can come along

and sort this out no problem. There is a price to pay.

What are the options? One is to actually what they call tank -

which is to paint a waterproof cement or plaster mix on here -

and that basically keeps the water out that way.

The only problem is, where does it push the water?

There are some more sophisticated systems

which basically line the wall with a plastic membrane,

which then goes down into a channel.

The water goes down into that and then gets pumped out of the property.

It's a more expensive solution

but it may be a better long-term solution in general.

Either way, it's not insurmountable.

As long as you budget it into the cost of the renovations,

then you shouldn't have to worry about it.

Yes, provided it's just wet rot,

and there are no more hidden nasties, with a bit of labour

and the right materials, this may not be as bad as it seems.

Overall, I think there are enough positives here

to make the effort worthwhile.

But what does a local estate agent think this two-bedroom basement flat

requires to bounce up in value?

This property is in obvious need of redecoration and some refurbishment.

There is evidence of damp, so it needs that to be checked out.

Double glazing would be helpful. Maybe a new kitchen and bathroom.

General tidy up.

If all the work was done to upgrade this flat,

guided at 20,000, what could it be rented out for?

I think that this property, if it was done to a high standard

and a good quality finish,

would expect to achieve £50,000-55,000 in today's market.

The rental market in this area is very buoyant at this moment in time.

I would think this flat should fetch £400 per calendar month.

Well, it's a good sized flat.

Certainly, for that amount of money, worth considering.

Of course, your biggest issue is going to be sorting out the damp.

Do that, and I think this could be a great investment.

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

Lot number 17. It's a two bed basement flat.

With gas central heating. At 15 anywhere? One bid.

The gentleman in the white shirt at £15,000. 16 anywhere else? 16. 17.

17 bid. 18. 18 bid.

19. 19 bid. 20. 20 bid.

21. 21 bid. 22. 22 bid.

You want 500? 22,500 bid. It's against you now.

The gentleman in the white shirt at 22,500.

23 bid. 23,500?

23,500 in the doorway. 24?

24 bid. 24,500? 24,500 bid.

I'll take 250. 250 bid at 24,750.

I'll take another 250 from yourself.

25 bid. 25,250?

25,250 bid. 25,500.

No? The gentleman in the white shirt at 25,250. It's your last chance.

Selling once at 25,250.

For the second time at £25,250.

Sold to the gentleman in the white shirt.

For £25,250, the successful bidder

for the two-bedroom basement flat in Gateshead was Stephen.

He used to work in the financial services sector

but, for the past ten years, has been running

his own property development company.

He already has an extensive portfolio of rental properties,

all of them south of the River Tyne.

Stephen, good to meet you. Congratulations!

Tell me why you wanted to buy this flat?

I've just done a big house along the road in this street

and just on the off chance. I went to the auction.

The price was so good, I couldn't not.

-You've already got some properties already then?

-Yeah.

A portfolio of approximately 35.

I started the company in 2002. This is the 10th year of the company.

Some interesting times over that period.

Yeah, we're in an interesting time now.

The last four years have been tough.

What do you think this would have been worth

in the height of the sort of post-2008?

I own three flats on the street behind.

And, the cheapest of those three flats was nearly double

-what I paid for this.

-When was that?

-Seven or nine years ago.

-Right!

You paid double what you paid for this now.

You can see why Stephen thought this flat was such good value.

The flip side to this, of course, is that the flats he bought

seven and nine years ago are still worth less than he paid for them.

So, he's seen the highs and lows of property developing

and how tricky it can be.

But he invests for the long-term,

preparing his properties for the rental market.

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

As you would have smelt when you came in,

the place has got a bit of an issue with damp.

I'm going to get the floors up, have a good investigate,

possibly tank the walls, replace some of the timbers.

They're gone in the corners. We've got some damp issues in the kitchen.

We need a new kitchen. It's very poorly laid out.

The bathroom is in a little bit of a state.

We'll sort the bathroom out, sort the kitchen out.

Sort the damp out. Decorate.

-Find a new tenant.

-And the budget in total?

I've set aside five grand.

£5,000 is going to be tight,

especially with the unknown factor of that damp.

Stephen's given himself six to eight weeks

to refurbish it fully, so he's not hanging around.

-Are you very hands on then?

-Pretty much always hands on.

Do as much as possible.

-Had a little bit of a heart scare recently.

-Heart scare?

-Yeah.

What sort of heart scare?

Not the weekend gone, the one before that,

I had what's been diagnosed as myocarditis,

which is inflammation of the heart muscle,

which, I'm supposed to be taking it easy, but we'll just get stuck in.

You don't think a good precautionary measure

might be to kind of take it easy?

This is me taking it easy.

What, up ladders?

Banging, taking off plasterwork, painting, ripping out doors.

Doing your kitchen units. That doesn't sound easy to me!

I might get someone else to do those bits for the next few weeks,

-just till I get the all-clear.

-Golly! Good health, anyway.

-I hope that's all right. Good luck!

-Cheers!

-Look after yourself.

-Thanks very much.

-I look forward to seeing how you get on.

-Thank you.

Well, there's work to be done to sort out this flat

but Stephen certainly seems to know what he's doing.

The big question is, will he do it

within that fairly tight £5,000 budget?

You can find out later in the show.

The moment of reckoning has arrived.

So, have our property buyers gambled well and backed the right horse?

Let's find out.

Earlier, we were in Woodborough,

this charming little hamlet in Nottinghamshire.

Here, we met Terry, who paid £229,000

for this three bedroomed detached house,

which came with a huge garden and its very own orchard to boot.

Terry lives two doors down from the property he purchased

at the auction and values the peaceful life he leads here.

So, he thought it was worth every penny he paid

to make sure that nobody could build here.

You've almost created a sort of a moat of land

around your property, haven't you?

Yeah. That's just what I wanted really.

Probably a bit selfish.

But, as I said before, I don't want nobody in my space, really.

Well, he certainly has space now, but what has he done

with this house, which was in desperate need of renovation?

We've returned five months after I first met him to take a look.

It's been renovated, all right.

Terry has knocked the tiny kitchen and separate reception room together

to make a much better open kitchen/diner...

although the conservatory's a goner

and the kitchen doors now lead straight into the garden.

He's also used part of the garage to make a utility room

and has added a downstairs loo.

The front room's been redecorated.

That 1930s fireplace I rather liked has been replaced.

Upstairs, there are no more candy-coloured walls or damp patches.

It's all new carpets, neutral colours and a modern bathroom suite.

So, lots of work has been put into all this.

Luckily, Terry didn't have to handle it alone.

Dave's been my friend for probably ten, 15 years.

He's helped me on this project from day one. We've worked together.

We've done tiling, put skirtings in.

He's done the majority of the plumbing.

A lot of plastering, roofing, putting windows in.

He's done lots and lots of work.

I couldn't have done it without him, that's definite.

Outside, and the front of the property looks

way more welcoming than before.

At the back, it's still work in progress.

The garden's still messy

but the debris has been removed from the orchard.

Since it was the apple of Terry's eye,

hopefully it will be fruitful some day.

The orchard means a lot to me

because I'm not going to build on it. It will just be an orchard.

I've got no plans for it

but at least nobody else has got it to do any building work in it.

And ruin everything up here for me.

Terry felt that maintaining his peaceful surroundings was priceless.

Although he paid over the odds for the property,

it was worth it to him.

He'd originally planned to spend £15,000,

which I feared was a bit tight.

So, how DID he get on?

I would imagine the job's cost between 25 and £30,000, really.

Way over budget. But I'm not particularly bothered

because it looks so good.

I don't really want to rent it out because it looks so nice.

So...but that's what it's cost - about 30 grand.

But renting it out is the plan.

After all, Terry may have bought this place for the space

but it also needs to fund itself.

He's got his ideal tenant in mind.

The tenants I'd like are a working family

that will come and look after it.

Because they will look after it.

I'm next door but one.

So, just somebody nice, who will care for it as I would.

Although there is some work to finish outside,

the house is ready to let now.

The job has taken nearly five months,

rather than the six to eight weeks Terry had estimated,

but his timescale was never strict.

And, with the house's new look inside,

I think all that time taken - and the hard work - really shows.

But will it reap financial rewards?

The property set Terry back £229,000 at the auction.

The work has cost him around 30,000, making a total spend of £259,000.

We invited two local property experts -

one of whom was on a return visit - to give us their views.

I think that the purchaser has made a great job

in the transformation of the property.

It's very neutral now with a modern kitchen, modern bathroom

and has lots to offer.

The renovation to the property is very good

in terms of the workmanship that's been put into it

and the quality of work that's been done to it.

Both estate agents pointed out that the value

of the property could be increased by either adding an extension

to the existing building or selling the orchard to a developer.

Well, we know that's not likely.

That would defeat the point of Terry's efforts here.

Privacy and peace have been Terry's reward,

but how much profit would he make in hard cash, should he decide to sell?

If I were to put this property on the market today,

I would look to put it for sale at an asking price of £270,000.

I would suggest a valuation of £275,000,

looking to achieve around about £265,000.

I don't suppose that's too bad at all, but...

we've bought it and spent that sort of money on it,

so, I'd like a little bit more, but I'm not going to sell it anyway.

So, he could make a pre-tax profit of between £6,000

and £16,000, minus the usual selling expenses.

But, Terry's set on letting this property

as he wants to maintain control over it. So, what could it earn?

I would expect it to achieve a monthly rent

of somewhere in the region of £900 per calendar month.

You'd be looking to achieve somewhere in the region

of £950 per calendar month, possibly down to £900 per calendar month.

That's quite reasonable, yeah. Quite reasonable.

A rental income of £900 to £950 per calendar month would generate

an annual yield of around 4%. So, what's the plan now?

Just to get it rented out.

Sort the orchard out and get on with my life.

It was in the Tyne & Wear town of Gateshead that we first

came across a two bedroom basement flat that needed a lot of attention.

Not only did it need a complete refurbishment, but it had the spectre

of damp hanging over it, with patches on the wall and rotten skirting.

Worst of all, the floor joists seemed to be on their last legs,

leaving a rather unsettling bounce to the floor.

But, springing into action at the last moment to save it

was local property developer Stephen.

He bought it for £25,250.

The purchase seemed to be more by accident than design.

Just done a big house along the road on this street.

Just on the off chance, went to the auction,

and the price was so good, I couldn't not.

-Right!

-Really.

Stephen's been property developing in the area for over ten years

and has more than 35 properties.

Having previously bought flats in nearby street,

he felt this flat offered such good value that,

even with the damp issues, it would make a good addition

to his rental portfolio.

Despite a recent health scare with his heart, he hopes that,

on a six to eight week timescale, and with just £5,000,

he could breathe new life into this flat.

Now, nearly 14 weeks later, we're back.

Certainly, the outside's looking a whole lot healthier.

A new front door, double glazing, paintwork, gravel,

and the stairs down to the flat have been fitted

with a smart new handrail.

So, this might be a basement flat,

but from the outside at least, things are looking up.

Inside, Stephen's refurbished throughout - upgrading the kitchen,

bathroom,

fitting new central heating,

replastering, redecorating and carpeting.

On the face of it then, it's all looking promising.

But what about those unseen areas

lurking underneath the floorboards, eating away at the skirting boards?

Once we lifted it, we didn't realise how bad the damp was going to be.

So, we've replaced all of the sub floor joists,

from that radiator, right over to the wall

and right through to the chimney breast next door.

The subfloor timbers were just rotten.

The place was soaking wet underneath.

All of the ventilation under the building was blocked,

so we cleared out all of the ventilation,

replaced the timbers, replaced the floors,

um, treated all of the timbers,

and we've got a nice, firm, steady floor now.

Whereas, before, we had a bit of a trampoline.

With the flat back on the level and the rear of the property tidied up,

Stephen at last got it back on its feet.

But it did take a little longer than he planned.

I said it would possibly be two months

but then I had a holiday and I wasn't supposed to be doing much

because of the little heart thing,

which I've now got the all clear for, which is good, which is nice.

So, I think, timescales, ideally I would have got it done

a little bit quicker, but I think ten weeks' work.

I think we've achieved enough.

Yes, and so do I.

And I'm very pleased to hear that Stephen has fully recovered.

He might have taken it a bit easier than he normally would,

but not by much.

Every day work got done here, I was here. I put the kitchen in,

took the bathroom out and then reinstalled the bathroom.

Done all the damp work. Put the windows in.

I had a couple of friends help, who done a great job for me.

I couldn't have done it on budget without them helping.

But we've got there in the end

and we're pretty much ready for tenants now.

So, with a fair amount of elbow grease and help from friends,

Stephen's successfully got the flat ready for the rental market.

But has that help been enough for him

to stick to that fairly tight £5,000 budget?

I've spent just under five grand. So, I am on budget.

I don't really have a great deal else to pay for,

other than some gravel out of the back.

So, with just a £5,000 spend added to his £25,250 purchase price,

Stephen's made this flat ready for the rental market

for a total outlay of £30,250 without costs or fees.

So, has this been a good investment?

What do two local estate agents think?

I think this property is well presented

and has been finished to a very high standard.

I don't think this would stand on the market too long now.

I think it's a smashing property.

I think that blend of modern conveniences of central heating,

double glazing, neutral decor, absolutely perfect.

Stephen plans to let the two-bed flat out

but, after investing £30,250 on it,

could he see any return if he sold it?

In the current market, I would expect to achieve

£55,000 for this property.

In my opinion, somewhere between 55,000 and £60,000.

I'd be happier with 60, obviously,

which would kind of be a double-your-money project.

Those valuations could mean a potential pre-tax profit

of between £25,000 and £30,000,

as Stephen says, nearly doubling his outlay.

But, for now, it's all about the rental income.

If the owner were to rent this property out,

I would expect to achieve £425 per calendar month.

I would encourage the owner to put it on the market

at around about £450 per calendar month.

That's probably round about

what I would expect to achieve for the place.

Um, possibly, to let it quickly, we might go a little bit cheaper.

Even at £400 per calendar month,

Stephen could be looking at a whopping yield of around 16%.

So, planned purchase or not, this flat

certainly didn't turn out to be a damp squib.

I wasn't looking to buy when I bought this one.

It was kind of an accident

and no doubt there'll be another accident

just round the corner somewhere.

Well, whether you're a full-time property developer,

or a property buying novice,

join us next time for more auction stories.

-We'll look forward to seeing you then. Goodbye.

-Goodbye.

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