Episode 3 Homes Under the Hammer

-Hello, and welcome to the show.

-For many, buying and doing up property

is just a dream, but for others it's a wonderful reality.

So are you a doer or a dreamer when it comes to homes under the hammer?

Well, buying at auction is exciting but it can be stressful.

The hammer goes down and, in a second, you've bought a house.

So if you are planning to buy at auction, make sure you're prepared.

So let's take a look at the auction properties

that were up for sale on today's show.

In Stoke-on-Trent, are things looking up for this two-bed house?

Just check the roof, cos I can't see what kind of state it's in.

And talking of roofs...you've got this, a London roof terrace.

It's just fantastic. I love it.

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.

Your lot, sir. Well done.

Vauxhall in south-west London has changed massively

over the past 15 years.

It used to be an area dominated by offices and factories.

Now it's a popular, sought-after destination

with lots of new housing developments, cafes, bars

and incredible transport links.

100 yards from the hustle and bustle

and I'm here to see today's auction lot

tucked away on this beautiful little square.

You know, it feels a world away from busy, bustling Vauxhall.

And here it is.

Now, it's detached but I'm afraid it's not the entire building.

I'm here to see the two top flats.

Now, the average one-bed flat in this area can command

as much as 350 grand,

so I was very excited to hear the guide price on this, just £310,000.

I'm going to get inside.

Now, this is interesting because the flats are described in the auction

catalogue as being non-self-contained.

That means they've not legally been converted.

So what you're really buying here is one property across two levels.

What you've got to decide is whether you want to keep it as one

or take the time and trouble to get planning permission

to turn it officially into two flats.

On this floor, you have a lounge and a bedroom with a bathroom leading

off it, and the kitchen is on the floor below,

along with another toilet.

The second flat has a kitchen but it's just as tatty as the other one.

But fear not, when all seems doom and gloom,

there is one glimmer of hope.

Permission for conversion for two flats was granted eight years ago

but that has now lapsed.

This nugget of information, well, it may give you some sway with

the planners but, as we know,

planning restrictions can change from year to year.

The thing that made them happy eight years ago may not prove popular now.

On the top floor alongside the kitchen, there are two more

good-sized bedrooms, a very dirty bathroom and a separate loo.

And if you still aren't quite convinced,

there's one more set of stairs I haven't tackled yet.

I wonder where they could possibly lead.

Well, if you're wowed by all the greenery

and pretty little spaces outside,

look, you've got this, a London roof terrace.

It's just fantastic. I love it.

Brilliant!

So, it's nice to end on a positive.

The roof garden is this property's crowning glory.

So with a guide price of 310,000,

it seems like a lot of property for the money

but is it worth all the hard work?

I asked along a local property expert to give his views.

It would probably turn out to be a spacious one-bedroom flat

so you could possibly get up to the ranges of £325,000 to £350,000.

A two-bedroom flat in this building with a roof terrace,

you probably would achieve around about, let's say £400,000.

If it was stripped out and converted to just one large flat,

how much would it be worth then?

You could expect to get up to around about £600,000, possibly.

With one-bedroom flats achieving £1,300 per calendar month

and two-bedroom properties fetching £1,700 per calendar month,

it seems like a great investment for buy-to-let.

There is an awful lot of work to do in this confused house.

But if planning goes your way and you manage to separate these flats,

the rewards will be high.

Let's see who wanted this property

and its beautiful setting as we go to auction.

Three floors. You've got two non-self-contained flats.

Start low at 300. Not going to go below three.

300? In the ar... Yeah, 300.

305. 305.

you310. 315.

320. 325.

330?

-330.

-330.

-331? 332.

-335.

-335.

336. 337.

340. 341?

341.

-3...

-345.

-345.

346. 3... 350.

351.

351. Another spot on the right. 351.

-352.

-355.

-355.

3...

360. 365?

360. Standing up. Anyone else? 360.

First time, second time,

third and last time. Have you all done?

HE BANGS GAVEL Sold 360.

That one and only bid made by Bill

secured the two flats for 360,000.

His wife Kumi seemed rather excited,

and I think she has every right to be.

I met them back at the property to find out their plans.

Congratulations. This really is a gem of a property

and you got it on auction day.

So how much had you, in your minds, intended to spend on the day?

-Well, it was your money.

-400. 400,000 was our budget.

It's a fantastic building but it's just a bit confused on the inside.

So what are you two going to do to get the most out of it?

Well, um, the possibility is one property,

two floors with a roof garden,

or two flats, so one floor each.

We haven't decided on that yet.

We've got to start immediately now with getting electricity

and water into the place.

And then we'll do a strip-out, first phase demolition,

and start obviously building up, plastering, services,

without still knowing whether it's going to be permission

for two properties or one property.

We'll get the result of that within three months, hopefully.

Kumi wants me to finish it in three months after that.

I'm telling her six.

-So nine months in total.

-So, come on, roughly how much have you got

-to spend on this?

-150.

-£150,000 to really bring it up to scratch.

-Yeah.

So not only is this property sitting in a beautiful area,

but Kumi and Bill plan a real luxury finish which could entice

no end of interested renters.

But once all the hard work is done, I really wouldn't be surprised

if we return and find these two have fallen under the property's spell.

Guys, I'm so excited to see the outcome of this property.

And I've got a cheeky suspicion that I think you might be moving in here.

-Bill, I can see the twinkle in your eye.

-I don't know what to say.

-Just wait and see.

-Wait and see. Good luck with it.

-So nice to meet you, Kumi. Thank you.

-Thank you.

Something tells me Bill and Kumi are going to end up moving into

one of these flats. I just know it.

They are so taken with this square. I can see why.

But, as ever, everything is subject to planning.

Will they get the go-ahead for the two flats?

You can find out what happens later on in the program.

I'm in the dynamic conurbation that is Stoke-on-Trent.

I'm here to see a very traditional mid terrace

in this row of similar properties.

Good, solid housing stock. Make great homes or investment properties.

This is it. The guide price was £45,000.

Let's take a look inside.

Well, you're certainly protected from the elements by a variety of doors.

You've got this porch thing going on then through to the main door,

but it doesn't half make getting in a bit of a struggle.

And squeaks like you wouldn't believe.

And I just know if this is going to be a running theme of this house,

because you come into this little corridor

and there's this stud partition.

I would've expected to walk straight in from there into the front room.

And certainly with the addition of that porch, you don't need

to have this wall here, but it is only a bit of wood and plasterboard,

so get rid of that, open this up.

Because at the moment, what could potentially be

a nice little front room is actually horribly claustrophobic.

Not only is it light on space, the decor isn't what

you would expect either - black and white tiles and that parquet floor.

It's got a bit of a '30s theme going on

and there's definitely a door theme going on too - here's yet another.

I've never seen anything like that before. How very strange.

It's like a semi-cellar. It's not really, is it? How odd.

Strange things, properties, but through to the rear sitting room.

Actually, this room at last feels a little bit more open.

Chance to breathe. Another very interesting fireplace.

Stairs up to your bedrooms and then, very traditional layout, through

to the rear of the property where you've got the kitchen.

Um, well, you know, it could be nice. At the moment, er...

Why on earth would you do that - paint the ceiling gloss brown?

Anyway, kitchen, yes, it could be nice, and then through to the loo

and the bathroom. Just all needs a bit of work.

Basically, this house looks pretty sound and pretty standard,

despite the fact that the decor seems to have come from the era that style

forgot, when brown ceilings were all the rage.

When was that exactly? Will upstairs be pretty standard too?

Yep. Two bedrooms.

# And that's typical... #

Just as you would expect - two decent-sized bedrooms, no bathroom

and some tired decor.

Well, out the back of the property and what would have originally been

a yard area of a two-up two-down terrace

has been filled with probably the most popular and typical

extension in the country - single storey,

which houses the kitchen and the bathroom.

Um, yes, it makes perfect sense. This out here, not in bad nick.

Nice that you've got the alleyway at the back there.

While you're up there, by the way, just check the roof,

cos I can't see what kind of state it's in.

# And that's typical... #

And an initial look at the roof shows it might need some work,

so best get someone to look at it.

# And that's typical... #

The backyard, like the inside, also needs a bit of sprucing up,

but I think it's all pretty straightforward.

If you were to buy this to let, you might keep the layout as is

and just renovate it.

If you wanted to make it your home,

you might think about some layout changes.

# And that's typical... #

But what does a local estate agent thing about this two-up two-down?

The main challenge of this property is to bring it to an up-to-date

standard which would certainly require new kitchen, new bathroom,

decor throughout.

There does seem to be some signs of damp as well,

so it possibly needs a damp-proof course and possibly a rewire.

And after all that had been carried out, what could this house,

that was guided at £40,000, be worth?

I would anticipate a resale value in the region of £75,000.

That sounds encouraging. What about rental?

I would anticipate a rental income in the region

of £450 per calendar month.

So not too many surprises with this one.

A fairly standard terraced house just in need of some sorting out.

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

Mid terraced house, two bed, popular spot, double glazing,

two reception rooms. So can we start the bid at 32?

32 right at the back of the room. £32,000.

Right at the back of the room. Have we got 34? 34 bid now.

34. 36? £36,000.

38? £38,000. I'll go in ones if it helps.

Can we say 39? At...

39, new bidder. 39,000.

40? £40,000. 41?

£41,000. 42?

Somebody in the aisle. 42? 42 at the back. 43?

44. 45. 46.

47. 48.

No? 48 still seated. Somebody at the back?

No. 48 still with you seated. At £48,000.

Another one anywhere else? If not, selling it at £48,000.

For the first time at £48,000.

For the second time. Third and final time.

Bid seated. No mistake at 48,000...

You bought it, sir. Well done.

£48,000 secured the Birches Head terrace,

which was bought by Nick and Cloge.

I met them at the house to find out

what drew them to a property in Stoke.

-Nick, Cloge, great to meet you both.

-Nice to meet you.

-Nice to meet you.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

As an investment. We just want to try, you know.

Nick's always wanted to do something like this.

I wanted to do it. So we went ahead and bought it.

-Are you mates or what?

-Son-in-law.

-Oh, right.

-Son-in-law.

-Got it.

And did that come about over a Sunday family gathering or something?

-Yeah, it did. Yeah.

-Yeah, pretty much.

-Oh, great.

-It was kind of more or less me that wanted to do it.

-He didn't really want to.

-Right, but you've drafted him in.

-Yep, drafted him in. Yep.

-Kicking and screaming.

-Yeah.

Cloge has started to build a portfolio

for some income and for a retirement fund.

He used to work in a car body repair shop but is now focusing on property.

With one already in this street under his belt,

he must know what to expect with these houses.

-So, have you got a builder's type DIY background?

-No.

DIY background, but obviously for the major stuff -

electrics, damp course, anything like that - I'll get a tradesman in.

The central heating, I'll get people in.

Checking the electrics, I'll get people in to do that.

With the rest, I'll be knocking down, the painting,

the decorating and bits and pieces, you know, I can do that myself.

-Do you both have jobs when you're not doing this?

-I do. I do.

-He's semi-retired.

-Right. What do you do?

-I work for a local bookmaker.

So are you betting on this being a success, are you?

It should be, yeah.

-What's the first thing you're going to do?

-Get these nice carpets up.

Right. What's the budget for the work?

-10,000 to 12,000.

-Right. And timescale?

-Three to four months. Probably the four months.

-Right.

-Well, all interesting stuff. Congratulations.

-Thank you.

-Good luck to you both.

-Thanks very much.

-Look forward to seeing how you get on.

-Thank you very much. Thank you.

So what odds would you give Nick and Cloge

on making a success of this place?

Oh, I think fairly good ones.

Find out how they get on later in the show.

Well, making the right design decisions when it comes to doing up

a property isn't just about choosing the paint colour.

It can actually seriously affect your profits.

Transforming your ideas into a reality can be a thrill,

but did our buyers get it right?

Let's go back and find out.

We're off to the south-west London area of Vauxhall.

Described as two non-self-contained flats,

it was a number of higgledy-piggledy rooms

spread over the first, second and third floors

of a lovely old brick-fronted building.

And it was bought at auction for 360,000 by Bill and his wife Kumi

as part of their property development sideline.

It's a fantastic building but it's just a bit confused on the inside.

So what are you two going to do to get the most out of it?

Well, the possibility is

one property, two floors, with the roof garden,

or two flats, so one floor each.

We haven't decided on that yet.

Despite having no definite plans,

they hope to complete the full renovation in nine months

and on a budget of £150,000.

Now, over two years and three months later,

we're back with Bill and Kumi to see what they ended up with.

Wow. Wow! They've certainly upped the whole building's kerb appeal.

So let's go through the communal entrance

and see what they've done upstairs.

Well, we got planning permission to make it official - two flats,

which is really what we wanted to do,

which obviously gives a better return on the project.

So now on the first floor there's a one-bedroom self-contained flat.

Well, that is impressive,

with fantastic period features and high-quality flooring.

But in the corner of the room, there are steps. Where are they going to?

Now, that's an amazing kitchen space.

This is the first-floor kitchen,

coming from the first-floor lounge area.

And this is quite a big kitchen for a one-bedroom flat.

Because I love cooking, I really like space here.

There's a small cloakroom off Kumi's spacious kitchen

and then onto a fab bedroom.

There's an impressive ensuite bathroom.

And it's up a flight of stairs to what is now

the two-bedroom flat on the upper floor.

Remember that rather sorry rundown living area?

Well, just take a look at it now.

Well, this is the living area for the top flat.

And I think the most obvious thing we've done here

is we've taken the ceiling out and we've got a vaulted ceiling now.

To go with that fabulous kitchen-diner,

there's the two bedrooms and both are ensuite.

There's even a storage room in the loft space.

Kumi and Bill have really eked out every inch of this building.

But why has it taken over a year and a half longer than planned?

I think the main problem is that

it took us a year and three-quarters

to actually get power into the building.

It wasn't just the power that caused some problems.

They were also delayed by planning issues

and whether the roof terrace was a terrace or just a roof.

Having finally resolved all the issues,

they've ended up with two great properties.

So what's the plan now?

Originally the idea was about investment.

But since we started doing this project,

we really started falling in love with the square, the house.

So we would like to move in into one of the flats.

But we have so much stuff. I have a grand piano.

So one of the flats would not be big enough for us for long-term.

So what we would like to do is, having moved here,

we look for another property in the square

and when there is a nice house, we move in there.

Yes, I always thought they just might be tempted.

While Kumi might not feel there's enough space for a grand piano,

I would guess this conversion has cost a grand or two.

So does Bill know what the total bill is?

I know exactly how much we spent, down to the penny,

because I keep a log of it.

And it's, uh, by the time we've paid the bills, it'll be 300,000.

£300,000 is a doubling of their original £150,000 budget.

And with the £360,000 purchase price,

their total investment without taxes and fees is now 660,000.

Has it been worth going for that high-end finish?

What do two local estate agents think?

Well, for this flat, from a value point of view,

I'd be suggesting putting it onto the market at about £450,000.

I'd say you would push it to go onto the market at £450,000.

And what about the upper two-bed flat?

You'd probably have to put that property on the market for £650,000.

The two-bed flat upstairs with that roof terrace is exceptional

and I'd sort of stick my neck out

and suggest £650,000-£660,000 in the asking price on that one.

Well, those figures could potentially see

a combined value for the two flats of over a million pounds!

That's a pre-tax profit of up to £450,000. Wow!

I think the flats are gorgeous, and I'm so impressed.

What do they think about that?

-Good news.

-Yeah, I think we'll sleep well tonight.

It was in Stoke-on-Trent in Staffordshire where

we first saw a two-bedroom mid-terrace house.

And though there was less than an ideal downstairs bathroom,

the two bedrooms really didn't lend themselves to any layout changes,

so in essence, the place just needed a full refurbishment.

That suited Cloge and his American son-in-law, Nick.

Tell me why you wanted to buy this place?

Um, as an investment. We just want to try, you know.

Nick's always wanted to do something like this, I've wanted to do it,

so we went ahead and bought it.

And did that come about over a Sunday family gathering or something?

-Yeah, it did.

-Yeah, yeah, pretty much.

# Well, I talk about it Talk about it

# Talk about it Talk about it... #

Well, they say talk is cheap,

but in this case, their little chat cost Cloge and Nick £48,000 to buy

the house at auction, and then there was going to be

an additional £10,000 to £12,000 to do the refurbishment.

The plan was to complete the work in three to four months,

with Cloge doing most of the work himself,

while rookie Nick helped out where he could.

And now, five and a half months later, we're back with Cloge, Nick

and Nick's young son, Phoenix, to check on progress.

Well, no real changes outside, but it was the inside that needed them

to roll up their sleeves and crack on.

Hey, and talk about changes.

Removing the hallway has really opened up the front room.

And the rear reception room's not bad, either.

But what about that all-important kitchen?

And bathroom?

Great job, lads.

The two upstairs bedrooms have been spruced up and are ready to go.

So, how has it been?

We spent...we must have spent about a month just cleaning everything out.

We didn't order a skip straightaway, we just got some bags,

-some rubble bags, and we put all the rubbish in the rubble bags, didn't we?

-Yeah.

And we put them outside, so we got about 50, 60 rubble bags outside.

Then we ordered the skip and went to pick up the rubble bags

and didn't realise they were biodegradable and we couldn't lift

-nothing up, so it was like double the job, weren't it?

-That was, yeah.

That was a bit of a laugh, but apart from that,

everything else has gone pretty OK.

Bit of a laugh? Yeah. That sounds like bags of fun.

But I think they've done a top job, particularly in the kitchen

and in the bathroom.

Well, the bathroom and the kitchen,

it was actually all designed by my wife.

What she did is she drew it down and says,

"I want you to do it this way," and I have to do exactly what

she tells me to do, because inevitably I'll get it wrong.

I would come down and just crack the whip

when he wasn't doing what he was meant to be doing, so, uh...

All right. Crikey.

Poor old Cloge sounds like he was having to take orders from all sides.

When he wasn't doing the work on the house, he was babysitting one of his

seven grandchildren, and it seems THAT role might be getting even busier.

My wife's expecting our second child,

so, six months and she'll have the baby.

We don't know what it is yet, so...but as soon as it's born,

we'll have it down to the next property and earning its keep.

BOTH LAUGH

Yep, that's it, start them young.

So, has getting the whole family involved kept costs down?

-We have actually spent £12,000 on it.

-£12,000, yeah.

Got probably a bit more to spend, maybe another £500, £600,

maybe £1,000, but we...I'm pleased, really, with the budget, because, you know, we're very close to it.

Assuming a final budget of around £13,000,

with a £48,000 purchase price,

their total costs, without taxes and fees, would be £61,000.

Does that add up to a successful start for this family team?

What did two local estate agents think?

The likely rental income for the property would be in the region

of £425 per calendar month.

I'd put this property on the market for £395 per calendar month.

Even the lower £395 per calendar month would generate a rental

yield above 7%. Not bad.

Now, more importantly, how would the house Cloge

and Nick have invested £61,000 in fare on the resale market?

I would place this property on the open

market in the region of £75,000.

I would put this property on the market at £73,000.

Well, that's roughly what we expected, yeah.

That's about right, yeah. We're happy at that.

So, potential pre-tax profit between £12,000 and £14,000.

Not bad for starters.

So, is that enough encouragement for them

to continue with property developing?

Definitely, yeah, we've enjoyed it. I've had some good fun. Nick's enjoyed it.

He's learned a few things, so I'd definitely do it again.

We hope you've enjoyed our insight into the world of auctions.

Yes, make sure you join us for more, next time on Homes Under the Hammer.

-See you then.

-Goodbye.

-Goodbye.