Episode 76 Homes Under the Hammer

Hello. In today's challenging market, could you hack it in the world of property?

-And if you get it right, it's such an exciting way to earn money.

-Yes.

It can be very rewarding buying your home under the hammer.

There are tense moments in the auction room. Who will make the right bid at the right price?

Yes, property can change people's fortune for better and worse.

So what inspired the people who bought on today's show?

On a trip to Chatham in Kent, I appear to have stepped back in time.

It's not been decorated since the '80s.

Whereas in Staffordshire, it's time to salute the humble building block.

Thank you, Staffordshire or Stoke-on-Trent bricks.

And in County Durham there are things inside this house that really aren't great.

I've got a horrible feeling it's not going to get better outside.

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

-when they went under the hammer.

-Your lot, sir. Well done.

I've come to the Kent town of Chatham.

Situated on the River Medway, its naval dockyards date back to the 16th century.

The refurbishment of the waterfront has transformed the local area and brought it bang up to date.

I'm here to see a house that was built in the 1950s,

around the same time as the Queen's Coronation and at the end of food rationing in Britain.

A time of celebration and when house builders favoured generous proportions and large plots.

Can you tell I'm a fan of the era?

So what is the guide for this sizeable three-bedroom property?

£110,000-£120,000.

# Lost in the '50s tonight... #

'On closer examination, this house might be a bit lost. It certainly needs some sprucing up,

'but has plus points like a garage and double glazing.'

You know, porches are really good when it's cold. They keep such a lot of the freezing wind out in winter.

Now this is in dire need of a major facelift here.

I don't think this place has been decorated since the '80s,

but I'm looking beyond these very dated brown doors in this sad timewarp of a kitchen

and I'm imagining a crisp, clean, contemporary home for somebody.

OK, so you don't get the old architectural features in here, but the trade-off is space.

And we all want more of that.

'The conservatory off the kitchen is a bonus, but the layout is rather convoluted.

'Having to access the living room from the kitchen is not ideal.

'The downstairs area of this house is begging to be reconfigured.'

I think you really need to clear this house of its furniture before you can see what it's like.

You could think about potentially knocking this wall down

and really opening up the kitchen, using this area as a dining room,

but you've got the additional space of this little conservatory at the back.

OK, it's got a flat roof. You always get a few problems with flat-roofed conservatories.

There may have been a leak. Somebody's been poking around up there to have a look.

So it's advisable to get somebody in to have a look at the roof, but I look at it as a bonus room.

It's lovely and spacious with a fantastic view out to the garden,

but single-glazed windows, I think they're rotten, so I'd take the whole front out.

You could replace it with some nice bi-folding doors or even big French doors.

Imagine how nice it would be here in summer. Fantastic.

'But before you get carried away, the roof required urgent attention.'

# When the weatherman brings the rain

# I have found my winter coat again... #

'But it's not just the flat roof of the conservatory. There are signs of damp at the front as well.'

Whenever I view a property, I always make it my business to look up.

Just have a look at the guttering and downpipes.

If they're cracked or blocked, it can cause no end of problems,

so factor them into your budget. They're often overlooked, but are so important.

This house most definitely requires some new guttering.

If I took this house on, it would be on the top of my "to do" list.

'Thankfully, there doesn't seem much to add to that list upstairs.

'The layout of this semi is fairly standard for its era and type,

'with two double bedrooms

'and a single bedroom. Even with all this furniture and wardrobes, there's plenty of room.

'It is going to need redecorating, but you would expect that.

'Of course, you wouldn't normally expect to have to clear out furniture.

'And something else for that "to do" list is the bathroom.

'That needs a total overhaul.

'With major reconfiguration, roofing, guttering, a new kitchen and bathroom, that list gets long.

'With all that to think about, did the guide price of £110,000-£120,000

'make this house from the Fabulous Fifties nifty? Or not?

'What does a local estate agent make of it?'

It's predominantly a residential area

with fantastic links to the M2 and M20 motorways.

I like that it's a corner plot with the garage to the side.

They are good-sized rooms with a conservatory off the back.

-It would appeal to a family.

-'Let's discuss figures. Once done up, how much could a buy-to-let investor

'achieve here?'

The rental market is very buoyant.

I do believe that we would achieve approximately £800 per calendar month.

'And what could it be worth after a full makeover?'

In the current marker conditions, I do believe the property will achieve approximately £160,000.

I'm worried this could turn into a bit of a money pit,

but the bones are here, so jus keep to a strict budget

and then somebody could make a healthy profit. Who wanted this at auction?

Lot 30 we go to now, which is a three-bedroom semi for improvement.

I'll take 100 to start me. £100,000. I'm on the way.

And 10 now do I see? We all know it's worth it. 110 at the back.

115 do I see? 115 I have. 118 against you now at the back.

118 bid I've got. 120?

120 can I say? 120, I'm obliged. 122 now. It's against you.

120,000 in the middle of the room.

122 I'm looking for. 122. 124?

123. 124.

124, can I say? Yes, 125. And 5.

125. And 6. 126? No?

At 125,000, standing again, I will sell for the first time. £125,000 for the second time.

Third and final time at £125,000. Are we all done?

'While the successful bidder Bob kept his cool, his wife Christine is a lot more excited.

'They live 25 miles away. Bob owns a printing business where his son, Nigel,

'started his printing career before being headhunted by another company.

'I met Bob and Nigel at the property to hear about their plans.'

-Guys, congratulations. I bet you are so happy you got this.

-Yes, we certainly are.

-Bob, you were at the auction.

-I was.

-What was that like for you?

-It was very good, very exciting.

I was there with my wife, Christine. We've viewed the house before.

Unfortunately, we didn't have time to view inside, but now we have actually purchased it,

-we are pleased.

-So, Nigel, what did you think when your dad spent that amount and he'd not seen inside?

I was a little bit surprised. They've always bought commercial properties.

I've been inspired by your programme and I've always wanted to have a go.

Dad's had an accident in the past and I've taken over looking after the commercial side

-of his portfolio, in a way.

-Bob, what happened to your leg?

I had an industrial accident.

And there were a few complications afterwards and so I needed several operations to correct it,

particularly the alignment of the lower part.

Bob was out of action for quite some time and relied on his son, Nigel, heavily during that period.

A few months ago, I had a frame around my leg. At 5 o'clock in the morning,

before he set off for work in London, he was tapping on the door to alter it to straighten the leg.

And at ten o'clock at night, he'd finished his work from five until ten in the evening,

back in again at the family home to make sure everything was fine. You can't ask for any more.

I can't ask for any more.

-# Couldn't ask for more

-What more could I ask for?

-Couldn't ask for more... #

'This commitment is going to extend to the two working together on this property.

'They have experience in the commercial sector, but this is a new venture for them.'

Bob, why the change to residential?

I think as I'm thinking of retirement, it's a form of pension.

Also, if I get my figures right, I'm looking for a return

of probably...6% return.

-Mm-hm.

-Far better than you can get in the bank.

What are you going to do to turn this place around? It's in a right old state.

Obviously, we'll clear the place. Then we'll have the place rewired,

new bathroom suite upstairs, plaster each room, redecorate, new carpets.

The kitchen, we'll perhaps move the doorway slightly. We'll have some double doors out here

with a bit of decking to the side. We're looking for it to be a family home.

-At the moment, it's neglected.

-Is it a father and son project or will you do most of it yourself?

I think I'll have mainly the input in it, with a bit of fatherly advice

where he feels I'm falling off the rails!

But, yeah, this hopefully will be the start of something quite big.

I've been watching my father's footsteps on the commercial side.

Now we're going into residential. It's a good starting place for me.

It's great Bob has Nigel to help out with this renovation.

The only downside with this project is that they aren't that local.

Both live about 25 miles away.

So how are they going to cope with the commuting?

We've just purchased our motorhome. A 21-foot motorhome.

We named it Brian. We've seen the state of the kitchen and bathroom. Not up to scratch.

So we intend to use the motorhome on a three or four-day spell.

-How much do you intend to spend?

-£16,500.

-To do everything?

-Yes.

-And what's your timescale?

-We're looking at four months.

What do you want to do with it, Bob? Sell it on with a profit?

I think I'd look at both options, but initially it was to create a comfortable family home.

I'm really looking forward to seeing it. Good luck with this project. I hope it really goes well.

-Thank you.

-Well done.

-Thank you.

Thank goodness for Brian the caravan. Without his trusty motorhome,

Bob wouldn't be able to stay on site and keep on track.

I'm worried, though, about that budget. If he spends too much, he could even make a loss.

Join me later to find out what happens.

Today I'm in the Hartshill area of Stoke-on-Trent,

a really popular area for commuters with easy access to the motorway.

But you've also got the University Hospital of North Staffordshire and that means potential renters,

in terms of students and hospital workers. Sounds like a great place to buy a property at auction.

Hospitals are always a great source of potential tenants, particularly a university hospital like this.

Medical staff often move around the country while training, so they look to rent rather than buy.

It sounds like this property that went to auction guided at £65,000 may appeal to buy-to-let investors.

Like many houses in the area, the property I'm here to see is a traditional terrace,

but it's an end terrace, which is an added bonus. Seems in good nick.

So with that hospital, the potential rental there, it could be a safe bet.

It's all about what we find inside.

So any surprises in store? A very traditional layout.

Through into your front sitting room, I'd have liked a fireplace,

but that could be put in simply. I know it's just decoration, but that's quite sweet.

"Life isn't about waiting for the storm to pass, it's about learning to dance in the rain."

Well, let's hope that the rain in this instance is kept well out.

But I'm not seeing anything that concerns me too much so far.

Into the rear sitting room. Traditional layout, stairs there,

a fireplace which has been blocked up. I'd like that opened up.

Traditionally, the house would have stopped at this point. Somebody's built an extension.

That's where the kitchen is housed. It's not huge, but it makes the most of the space there is.

It could definitely be improved by getting rid of this humungous cupboard with the hot water system.

Remove that, put a combi boiler in and open this up even more.

At the moment, this is your bathroom. It's very small, right at the back here.

Not too many issues with the location, but the size is lacking so get rid of that cupboard,

maybe move the back door a bit, create a much nicer family bathroom

and you're doing pretty well.

'The bathroom may be small, but so is everything in it.

'Look at the basin. It would be no use for sloshing around. It's tiny!'

# Tiny bubbles... #

'I like a bubble bath as much as the next man, but I'm not keen when they're on the wall.

'It might just be condensation, but it might be signs of damp.'

# Tiny bubbles... #

'The kitchen looks tired and needs upgrading,

'but it's a relatively small space so shouldn't be too big a job.'

# Pink, it's my new obsession... #

'Upstairs in this house that was guided at £65,000 plus, there's a pink colour scheme

'right the way through to the rear bedroom.

'It's a good-size room in good order, like the front bedroom, where the colour's been replaced

'with a monochrome animal print feature wall.

'You do get the feeling that whoever lived here before had a really happy, optimistic outlook on life.

'Will the outside of this house be as upbeat?'

At the rear of the property, as well as the extension, you've got this garden. It looks a bit drab,

partly to due with the time of year, but get a nice bit of lawn in there, some nice plants,

and it'll make a big difference. While I'm out here, one thing that strikes you is the bricks.

It's worthy of note. They are absolutely beautiful, probably very local.

And you know what? I've got a thing about bricks.

This is a modern brick, right? Look how boring that is.

It's orange and all the same colour. Now this is a traditional brick,

probably fired in this area. Look at the colours - you've got blacks, dark oranges, yellows.

You probably think I'm going loopy here, but this would have been... What do you mean, "Yes"? No.

This would have been made locally, probably hand-fired,

and I think it's a really wonderful architectural feature.

So thank you, Staffordshire or Stoke-on-Trent bricks.

'As the property's an end of terrace, you get a lot of bricks on show. Shame they're painted over.

'The detail at the front is very nice, even though the windowsills need attention.

'We asked a local estate agent for her advice about the work required here.'

I would recommend new kitchen, attention to the bathroom,

attention to the damp downstairs,

double glazing and redecoration throughout.

'So once you've cleared that little lot up, what standard of refurbishment would be advisable?'

I would recommend a basic specification throughout

because I could see this going into the buy-to-let market and being rented out.

-What rental income could it generate?

-Once modernised,

I recommend renting this property out at £475 per calendar month.

What about a re-sale valuation, the possible return on the investment?

Once this property has been modernised to a basic standard, I'd be looking to achieve

in the region of £70,000-£75,000.

Well, it's a property that's got a lot going for it. A good area, a solid house,

which doesn't need too much doing to it. And you get those fantastic Staffordshire bricks for free.

Let's see who fancied it.

Lot number 59. An end-of-terrace house close to the hospital. Good investment opportunity.

What shall we say? 50,000?

45, then? 45 bid. Thank you.

£45,000. Can we say 50?

Yeah, 50 bid. At £50,000.

At 50. I'll go in ones if it helps.

Yeah, 51. 52.

53. 54. 55. 56.

57. 58.

59 anywhere else? At £58,000.

Are we all done?

At £58,000 for the first time.

At £58,000 for the second time.

Third and final time, then, at £58,000. Are we all done?

-Sorry. That's just not quite enough. If the bidders would like to talk.

-'This lot was withdrawn

'because it didn't reach its reserve price, the price below which the vendor isn't willing to sell.

'However, a satisfactory deal was struck eventually with husband and wife team Sharon and Chris.

'They've been married for 29 years and live locally.

'Chris works full-time as a telecoms engineer and Sharon part-time as a medical administrator.

'I met up with them to find out their plans.'

-Chris, Sharon, lovely to meet you.

-Hello.

-Congratulations.

-Why didn't you bid in the auction?

-We just bottled it on the day.

We didn't dare. We couldn't believe it would have gone for less than the asking price.

The reserve was 65. Then it was 58 it got up to.

-But you didn't think about bidding?

-No.

-We looked at each other to bid, but didn't.

It does happen quite quick. I can understand. In the heat of the moment, you have to decide quickly.

It ran away with us a bit. It is quick.

We heard this bid of £58,500 or thereabouts

and then I dropped a bit of paper on the floor and by the time I'd come back up, "It's not enough."

-And we thought, "Well..."

-So you went up. Were you told then what price you needed to pay?

Yes, they said 60,000, so we were happy with that price.

'I'm not surprised they reckon they've got an unexpected bargain at £60,000 for this end-of-terrace,

'especially as similar houses are selling for around the £70,000-£75,000 mark.

'But what did they buy this for?'

Purely rental income. It's a bit of a long-term investment for us.

We don't see ourselves working until we're 67, as it is now. The pension age keeps increasing

and pension returns are diminishing and money in the bank isn't getting a great return,

so we just thought property seems to be the way to go. So we're on the bandwagon.

-Tell me what you're going to do to sort it out.

-The first thing is double glazing, new doors,

we're going to replace the fireplace, do something with that, new kitchen.

We'll have someone look at the tiles. A couple are loose.

Just general painting and decorating.

-No layout changes?

-No.

-None planned.

'So if they're not going to do anything with that cupboard

'and keep things just as they are, they can probably get away with a minimal spend here.

'What budget do they have in mind?'

-Perhaps about £7,000, we think.

-We do have contingencies on that.

A couple of thousand more. It depends on the roof, if it was completely condemned.

-And the boiler. We're not sure.

-We need it to be checked. And the electrical wiring

by somebody who's qualified.

'They've set themselves a goal of 3-4 months to get it done

'and will do most of it themselves. They've got another property in Crewe, so they have got experience.'

How have you found dealing with tenants? A lot of people are put off renting for fear of midnight calls,

-"My boiler's broken".

-We've had ours fully managed.

-Right.

-Any problems they've dealt with for us.

-You pay a little bit more to the management agency.

A percentage to the agent, yes. And we're quite happy so we don't have to get involved, face to face,

with the tenant. We're a bit soft. If they were a bit short of money one week, we might just say,

-"Oh, it's OK." So we're quite happy for a management company to just...

-Do that for us.

-Well, congratulations. Good luck.

-Thanks.

-Look forward to seeing it.

So Chris and Sharon expanding their property portfolio with this little terrace in Stoke-on-Trent.

Not too many issues to sort out. Maybe some damp in the bathroom.

I'm sure they will take it in their stride. Find out how they get on later in the show.

Coming up: in Dipton, County Durham, there's no getting around the fact

that for all this house's plus points...the layout's rubbish!

Back in Stoke-on-Trent, is this going to be Chris and Sharon's last property investment?

-I'd be quite happy to do another, but we agree to disagree.

-We do.

But first we find out why Bob and Nigel are so chuffed with their renovation efforts.

Overall, we're really pleased.

The Kent town of Chatham on the River Medway has a proud maritime history

and the redevelopment round the docks is for a new generation.

Earlier in the programme, this 1950s three-bed semi was bought

for £125,000 by Bob, who runs his own printing company. His son, Nigel, is also a printer,

but doesn't work with his dad. Bob has built a buy-to-let portfolio

of mainly commercial property. The plan was for Bob to project manage this house,

while Nigel refurbished it on his days off.

Bob, why the change to residential?

I think as I'm thinking of retirement, it's a sort of pension.

Also, if I get my figures right,

I'm looking for a return of probably...6% return.

They'd set a budget of £16,500 and four months to refurbish the house.

Then Bob would decide whether to sell or let it. There have been some delays.

We meet Bob, Nigel and new puppy Jessie one year and 10 months later.

But hasn't the wait been worth it?

The house has a new porch,

off-street parking and the leaking roof's been repaired.

You no longer have to go through the kitchen to get to the lounge

and a new door's been created. Much better!

The kitchen has a crisp white, black and charcoal colour scheme

and looks very smart.

At the back of the house, that dilapidated conservatory that ran all the way along the sitting room

and kitchen has been split into two rooms, as Nigel explains.

Initially, we realised we had to rebuild. In doing so,

we made a garden room here, put some French doors in there,

put some doors at the back. We split it in two because it was too big to make it one room.

So we put it in two and made that a utility room.

Overall, we're really pleased.

It's a fantastic result, but they did aim to do it in four months. Mm, what happened?

I was meant to be doing most of the work, but due to my son having a spell where he wasn't well,

my dad sort of took back over and he's produced it to a very high standard.

Absolutely. A great team effort.

The entire house has been replastered and the three bedrooms are superbly finished.

This 1950s house has big rooms, so the rear bedroom lost a corner to the enlarged bathroom.

More quality fittings.

And as if this wasn't enough, they've submitted plans to improve the place further.

That would be for a granny annexe, single storey, basically, on the side of the property,

then the main house would have a fourth bedroom en-suite.

In the meantime, the space has been put to good use.

I've tried to tidy the whole area up here to create a soft area here

which could be used for a children's play area, perhaps a pet. We designed it for more of a barbecue area.

We fenced it off because, basically, the area needed tidying up.

And I just think it works really well.

Nigel and Bob have done the decorating themselves,

but employed qualified gas and electrical tradesmen.

Did they keep to their £16,500 budget? How much have they spent so far?

About 26,000.

25,200, so yes, we've gone over budget.

Ooh, just a bit! With the £125,000 they paid at auction,

that takes their total investment here to £150,200.

There's still the kitchen and bathroom to tile and a few snags here and there.

The house was rented out before Bob bought it

which has made him undecided about whether to let or sell.

It would break my heart, I think, if I came in and found it how it was before,

so I am sort of split between the two - whether to rent it out or whether to sell on.

Maybe some expert valuations from two local estate agents

will help Bob make his choice. What do they think of it?

What a fantastic job he's done! There are a couple of things to finish off,

but the standard is fantastic.

They've done it to a lovely neutral standard throughout.

It's lovely how they've separated the utility room, giving it a bit of extra space.

They've utilised the space very well.

The driveway is fantastic. They've made the bathroom bigger

by taking a bit off a big bedroom. What a great idea!

If Bob and Nigel do decide to let it,

how much income could the house generate in its current three-bedroom configuration?

If I rented it, I would get £850 per calendar month.

In the current market, we'd look to achieve £950 per calendar month.

Those rents would produce a yield of between 6 and 7.5%.

-I had a vision of 900 a month, so I think we're...

-In the middle.

-..pleased with that.

-Yeah, pleased.

If they're successful with their planning application

and decide to sell the property with the permission, how much could it be worth then?

The third bedrooms are always smaller on these properties. This would sell at £175,000.

Sale value, we'd look to market this property probably in the region between 180,000 and 190,000.

That valuation range would produce a gross profit

of between £24,800 and £39,800 before taxes and expenses.

A little bit lower than anticipated.

We were thinking, with the application for the annexe, 195.

That was the figure we had in our head.

Maybe adding the extension is the answer.

You'd like to think it would go up in comparison with what they spent, but I don't think it would.

I think if they spent £50,000 to extend it, they might get £40,000 more for the property.

You won't get properties for £250,000 down here.

If the extension is built, the estate agents' valuations increase

to between £210,000 and £220,000.

With all that financial information, is Bob any nearer to deciding whether to sell or rent?

-I think myself, personally, I'm tempted on the rental element.

-Yeah.

The finish Bob and Nigel have achieved here is excellent,

but has it been worthwhile?

Yeah, it's taken longer than anticipated.

-But, um...

-A bit of fun.

-Yeah.

-Great.

Today, I'm in County Durham in the former mining village of Dipton.

It's approximately 12 miles from Newcastle and three miles from Consett

and I'm sure it's lovely when the sun shines, but for now, I just want to find some shelter.

Well, it's a bit of a yucky old day today, but who cares?

It's one of those ex-miners' homes I'm here to see.

This is it. It's a two-bedroom mid-terrace. It had a guide price of 30,000 quid.

Let's get inside!

Well, let's hope it's drier inside than it is out.

And to be fair, I have been in some houses where that's not the case.

But what about the layout? A bit of a corridor here. I don't particularly like that.

It feels very sort of cramped in.

That feels like a stud partition wall, so maybe that wouldn't be too bad to get rid of.

Under-stairs cupboard... Does that look like the sort of thing you'd expect a telephone to be in?

It just does at first glance to me. Through into this room here.

I guess this was previously the kitchen, but that's now elsewhere.

You've got this room with far too many doors in it.

It makes it a pretty useless space, to be honest.

Through into this side of the front of the property, the other side of that wall,

and you've got your living room area. You've got an open fire with a gas fire placed in front of it,

but the layout's rubbish, isn't it?

# Something better change

# I said something better change... #

"Rubbish" is perhaps a rather strong word, but what I mean is that it doesn't feel right

and there's no natural flow.

The lounge is only reachable via the corridor and through the back reception room

which has now become a corridor leading here, there and everywhere.

It really does need to be changed.

Things aren't much better with the kitchen.

For some reason, the kitchen has been positioned in this little lean-to area at the back.

It's bad on so many different levels. I don't know where to start.

If you look at the thickness of the walls here,

that's not going to be a cavity, so there is no damp-proofing in here.

It's got lots of glass and lots of light, but it's a very cramped space

and for a room that you use such a lot, it's not good.

I've got a horrible feeling it won't get better when I go outside.

Yeah, pretty much as I predicted,

a flat, felt roof.

Not ideal at all. Basically, it's got to come down.

The good news though is you've got a decent-sized rear yard,

some outbuildings and, more importantly,

space to potentially put a proper extension on this place.

Yes, the outbuildings might be worth keeping

as a useful workroom space,

and there's an outside loo,

but the pre-fab extension, well, that simply has to go.

# Since you gotta go

# Well, you'd better go now... #

Not only does it not meet current building regulations, it's starting to fall apart.

But what about the rest of the house?

Well, upstairs, I think the bathroom might need a bit of attention,

although it's not black and white whether to keep or replace the suite!

And the two bedrooms? Well, redecoration and new carpets are a must.

The electrics need replacing and there's work needed on the ceilings.

Once the old furniture is removed, they're both a decent size,

so, overall, I think this place is worth having a go at upgrading and improving.

What does a local estate agent think of this two-bedroom, terraced house?

It's a nice-looking property from the front. It's a stone-fronted house.

It's a good, traditional, solid property.

Some work needs to be done to the property,

including pulling down the kitchen offshoot,

which would either be then replaced or simply left with the dining area turned into a kitchen/diner.

If this property that was guided at £30,000 was rejigged and refurbished,

how might it fare on the rental or re-sale markets?

In the current market, once renovated,

I think this property would be achieving somewhere in the region of £70,000 to £75,000.

You would put the house on the rental market for somewhere in the region of £400 to £425 per month.

Those valuations suggest that take away some parts of the house and re-divide others

and this property could add up to being a good investment.

Well, intrinsically, this is a good-sized house.

It's just that the internal layout is a bit mixed up at the moment,

so I don't think it would cost too much to put it right.

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

So we're going to move now down to Stanley, County Durham.

Mid-terraced house, it requires refurbishment. It has gas central heating, partial double glaze.

I'll start at 24.

Thank you, at 24,000, to get us going.

£24,000 bid.

Do I have 25 anywhere else? 25 bid.

26. 27. 28.

29. 30.

31. 32? 31,000 on the front row.

You're out. I'm at 31,000 on the front row.

I'll take 32? 32 bid.

33. 34. 35.

36. 37. 38.

39. 40.

41. 42. 43.

43 at the back. 44.

45?

I'll take 500 if it helps. 44 and a half?

It's on the front row at 44. 44 and a half. 45.

45 and a half? Front row at £45,000.

I'll take a half? I'm selling once at 45.

I'm selling for the second time at £45,000.

Sold to the gentleman on the front row at 45.

'And so for £45,000, £15,000 over the guide price,

'the successful and delighted bidder was Ray.

'He works as a sportswear supplier and has been keen to start a property developing sideline.

'This is his first investment.'

-Ray, great to meet you.

-Thank you.

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

I live near the village, 400 metres down the road.

I thought, "I know the area well, it's an ideal property, especially as it needs some work done to it."

Ideal location. I can come at night-time after work.

-Will it be an investment property?

-Hopefully, renovate it top to bottom

and most likely, put it on the buy-to-let market.

Why did you choose this house, other than it's in the village?

I got this one because I missed out on another one, so everything was all set in place.

This one came up and I jumped at it straight away because I wanted to get started,

get something on the rental market as soon as possible.

'Despite this being Ray's second choice, he had seen the property.

'In fact, he tried to buy it before the auction, but his £38,000 offer was rejected.

'But now, having paid £45,000, the house is finally his

'and he can at last get started on the renovation.'

-It's got an interesting layout.

-It has. I'm going to change that. That's one plan.

Tell me how you'll sort it out.

Where we're standing now, hopefully, will be the kitchen, so it's going to be a kitchen/diner.

I'll block this off and have the original door to the right.

-So that will be a front sitting room?

-It will be, yes. It'll be all separated.

And the extension at the back?

I'll remove that altogether and tidy the back up, make it a bit more presentable.

Upstairs, I'll modify everything, new central heating system, new electrics

and fresh plaster to give it nice, sharp edges and then decoration throughout.

-What's the timescale for the work?

-Two to three months.

-The budget?

I'll hopefully be in between 8,000 and 10,000 to complete everything.

'Ray seems to know exactly what he wants to do here.

'Indeed, as he's local, he has seen inside similar properties,

'so he knows what layout changes can be done and, more importantly, which alterations are worth doing.

'But even so, there's a fair amount of rearranging, rebuilding and rejigging to be done here.'

-Who's doing the work?

-I'm going to do most of it myself with friends and contractors to help out.

-What do you do when you're not doing this?

-I work for a sportswear company.

I supply team kits to schools, colleges, universities and local sports clubs.

Where have the DIY skills come from?

It's just a hobby, something I really enjoy.

-I grew up with a lot of it and I want to get more involved in it.

-Good stuff.

-How many properties have you done?

-This will be my second renovation. It's my first investment property.

The other one is my home and we renovated that from top to bottom. That gave us the bug.

What tempted you into doing it now?

The low house prices. I'm trying to take advantage of it when there's some good deals out there.

-Congratulations.

-Thank you.

-Good luck. I look forward to seeing how you get on.

-That's great. Thank you.

So, Ray's first investment property and he's sticking to the area he knows well,

which is a really good thing to do.

How is he going to get on? Will this be here when we get back?

You can find out later in the show.

If you want to profit from property, timing is crucial and you have to be flexible with your plans.

And not let time pass you by. Let's see how our buyers got on today.

We're heading back to Hartshill, Stoke-on-Trent now

where earlier, we met Chris and Sharon.

They'd purchased this two-bed, end-of-terrace property for £60,000.

Just! The property didn't reach the reserve price in the auction room,

even though that was within the couple's budget.

-I'm confused. Why didn't you bid in the auction?

-We just bottled it on the day.

We couldn't believe it would have gone for less than the asking price.

-But you didn't think about bidding at that point?

-No.

-We looked at each other to bid, but didn't.

So neither raised their hand in the auction room,

but luckily, it didn't put paid to their plans to purchase this place.

Once they did, they aimed to get it ship-shape in three to four months.

We're now back six months later to see if they've managed to bring out the sunny side of this property.

# Let the sun shine, let the sun shine, let the sun shine

# Let it all go, let it all go, let it all go

# Let the sun shine, let the sun shine, baby

# Let it all go, just let it all go, baby... #

And it seems they've stuck to their plans here.

There's new double glazing, new doors,

new carpets, a new fireplace downstairs

and there's a brand-new kitchen.

The kitchen's been stripped out.

There was some damp on this side of the wall which has gone back to plaster.

That side of the wall was skimmed, but we ripped out the entire kitchen.

The cooker was originally over there with just a gas point which we've had taken out

and then we moved the oven to where it is now and it works quite nice.

Overall, the kitchen came out just about as we planned, really. It's turned out quite nice.

Because I've done all the work myself, it's come out to no more than £1,200.

That includes the tiles, all the furniture and the flooring, tiling. That's it at the very most.

So that's part of their budget explained, but what about the rest?

They aimed to spend £7,000 on the renovations here,

but had a contingency of up to 9,000.

Pretty much on target, really.

I think the whole lot, with solicitors' fees,

any agents' fees and stuff like that in purchasing the property, it's come out to no more...

-Seven and a half is about what we came to last night.

-Yeah.

Keeping their budget at 7,500 is pretty impressive,

given that this project wasn't as straightforward as it looked,

particularly when it came to sorting out the damp issues in the house.

Those involved pulling up floorboards and installing a damp-proof course

which also affected their timescale.

It did slow us down. We had to wait two to three weeks for somebody to come out,

then another two weeks or so for them actually to come and do it,

-so that was a month that we'd lost anyway.

-That's right.

So their three to four months was extended to five and now they're almost finished,

but there's a valuable lesson to be learnt here.

When planning a renovation, do be sure to build into your schedule

not just how long it takes to get a job done,

but how long it will be for the right people to be available to do it,

even if you're putting every second you have into it.

-How many bank holidays are there in a year?

-Every bank holiday this year.

Every Saturday and Sunday since April.

-Near enough.

-Yeah.

There's no denying they've put the hours in, but has it been fun?

I enjoy it.

I enjoy it. Yes, I'd be quite happy to do another project.

-But I think we have to agree to disagree, don't we?

-Yes, we do. Sorry.

Perhaps the potential returns will change Sharon's mind.

She and Chris purchased this place for 60,000.

And with £7,500 on the work, their total outlay comes to 67,500.

We invited two local estate agents to the property

to see if they're impressed.

My first impressions are that the property's had a full refurbishment.

New kitchen. I like how they've stripped it right back and really refreshed it throughout.

The property's very nice.

Very airy, very spacious. Obviously, neutral colours as you'd expect.

It's a typical two up, two down terraced property.

The biggest thing with this one is it sets itself apart with a lovely back garden,

so that's going to be a very good selling point.

And if Chris and Sharon did want to sell, how much could they put it on the market for?

In the current market, I would look at achieving in the region of £75,000 to £80,000.

We'd achieve between £75,000 and £80,000 in this current market.

-I think that's about what we expected for this area.

-Yes.

It might be a touch more than I expected when we initially bought the property, but that's about right.

It's nice to hear they're pleased that their potential pre-tax and expenses profit

would be between £7,500 and £12,500.

However, they're still keen to go ahead with the original plan of letting it.

How much could they earn if they put it up for rent?

On the rental market,

I believe this property could achieve in the region of £400 to £425 per calendar month.

I'd expect to achieve between £400 and £450 per calendar month.

Yeah, I think the one at 450 is about the one that we'd prefer to chase if we possibly could.

-425 might be about right, kind of in line with what we're expecting.

-Yeah.

Either way, the rental yield is impressive, sitting at between 7 and 8%.

We know Chris is keen to do another, so now she knows the financial potential,

would Sharon be convinced?

Not for a long, long, long time.

Never say never!

In the small village of Dipton in County Durham, a two-bed terraced house went up for auction.

Although it was basically structurally sound, its downstairs layout was less than ideal.

There was no direct access to the front lounge and a rear reception room that was more like a corridor.

Then there was the kitchen housed in a pre-fabricated rear extension

which was flat-roofed and single-skinned.

Quite frankly, it either had to go or be replaced.

# Where did it go...? #

But with two decent bedrooms upstairs and a reasonable family bathroom,

this place had lots of potential for anyone willing and able to untangle the awkward layout.

It was snapped up at auction for £45,000 by local man Ray.

He works as a sportswear supplier, but had refurbished his own property

and had been chomping at the bit to get his first investment project under way.

I got this one because I missed out on another one, so everything was all set in place.

This one came up and I jumped at it straight away because I wanted to get started

and get something rented out as soon as possible.

# Baby, I'm ready to go... #

So Ray was ready to go.

Armed with an £8,000 to £10,000 budget, he hoped to prepare it for the rental market

in two to three months' time.

# Baby, I'm ready to go... #

Now, nearly five months later, we return to see if the house is ready to go.

It's certainly looking sharper with a crisp, new, white front door.

At the rear, have we seen the back of that rather inadequate extension?

# Yea-ea-eah

# So good to be gone, so good to be gone

# Yea-ea-eah

# So good to be gone, so good to be gone... #

Inside, not only has the lounge had a full renovation,

including central heating, new plasterwork and a damp course,

but the layout has been altered.

The rooms have been widened and the access to the old rear reception room changed...

..in order for it now to accommodate the kitchen.

We've done a lot of work in the kitchen to get to this stage. Much of it was heavy, horrible, dirty work.

We've blocked the wall up which was here. We've removed the chimney breast.

It's created an extra three foot on the kitchen, so we can get a lot more units in.

The original extension was damp, rain was coming in and it was unsightly,

so we demolished the whole lot and now we've got a nice, clean view out of the kitchen into the yard.

It is a work in progress. I hope to have it done in the next few weeks. Can't wait to finish it.

So when it's finished, this is going to be a much improved kitchen and utility area...

..while upstairs, the bathroom has also been brought bang up to date

with a brand-new suite, tiling and an electric shower installed.

Ray has also found a way of maximising the space in the two bedrooms.

The main difference in the front bedroom is we ripped out two cupboards, both in the corner,

and again they've created more space.

In the back bedroom, we've taken out the chimney flue which has allowed us to square the room off.

It gives you nice, square walls and once more, it's been painted, so it looks nice and clean.

Apart from the gas and electrics, Ray has done most of the work with some help from friends and family.

He's mainly worked in the evenings and at weekends,

so not surprisingly, his two to three-month timescale has slipped.

He still has to finish off the kitchen and utility area

and there's also the space at the back, so what's to be done there?

Finish off the concrete we've dug up and maybe do a bit of block paving or some timber decking

immediately out the door to create a nice sitting area.

I'll tidy up the outbuildings. They're useful storage.

For the likes of mountain bikes or outdoor equipment,

you've got somewhere to put it away from everything else.

Ray hopes to finish off the remaining jobs in the next few weeks.

How much has it cost to get this two-bedroom, mid-terraced house ready for the rental market?

We are slightly over budget. The original budget was in the region of £10,000.

We'll be looking at 13 to complete it.

We put a better bathroom suite in than first expected

and a damp-proof course which we didn't budget for at the very start.

A £13,000 spend on top of his £45,000 purchase price

takes Ray's total outlay to 58,000 without costs or fees.

So has it been money well spent? What do two local estate agents reckon?

My overall impression is very good. They've re-plastered the walls,

put in a lot of contemporary fixtures and fittings,

just what first-time buyers want.

The house is looking very good.

The owner has put a lot of time and effort into the refurbishment.

There's a bit of work left to do in the kitchen and the rear yard needs some finishing off as well,

but once done, it will be a very nice property.

Some of the highlights for me would be the inglenook fireplace in the lounge, the brand-new fitted kitchen

which will be superb and the bathroom as well. It's re-carpeted and redecorated throughout.

Ray hopes to let the two-bed house out, but after spending £58,000 on it,

does it add up to being a good investment?

Once the house is complete, I would consider placing it on the market in the region of £70,000 to £75,000.

Once the property is complete, I would market it at £70,000.

That's definitely the ballpark figure I was looking for.

That's a potential pre-tax profit of between 12,000 and 17,000.

How could it fare on the all-important rental market?

When the work is finished on the house,

I would place this on the rental market for somewhere in the region of £400 to £425 per month.

I would offer the property to market for rent at £425 per calendar month.

Definitely what I was expecting. Hopefully, I can achieve that.

A rental return of between £400 and £425 per calendar month

will see an annual rental yield of over 8%,

so that's plenty of incentive to get Ray to finish it off,

get a tenant in and start getting revenue for the house.

So how does he feel about this, his first property investment project?

It's been a lot of fun renovating the property, especially with the help of friends and family.

Everything went to plan. It's been an experience.

That's it for today. We'll have lots more stories from the auctions next time on Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.

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