Episode 4 Homes Under the Hammer

Despite slightly confused market conditions,

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

And if you are prepared to take the plunge,

auctions are a great place to start.

It can be fast, it can be frantic,

but it's interesting to buy your home under the hammer.

Now, this show isn't just about bricks and mortar,

it's about real people with real stories to tell

-and we never know how things are going to turn out.

-Is it a dream?

Is it a nightmare?

Stay with us as we follow more lots which sold at auction.

In Stratford, east London,

the third bedroom in this flat is just a bit on the tight side.

Look, I can touch either side.

In the north-east, near Gateshead,

this semidetached house appears to have a pressing problem.

I've just noticed this on the carpet.

Somebody having a bad day with an iron.

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!

This is Stratford in east London,

home to the 2012 Olympic and Paralympic Stadium

and now an area with thousands of new homes,

fabulous transport links and a mega shopping centre.

In fact, it sort of has the feeling of a new town

rather than an old one.

Well, if you were after urban,

you will be happy with this location.

Railway line just over that wall,

busy road in-between and Stratford itself only 15 minutes that way.

Now, it's undoubtedly going to be noisy at times but, hey,

you'll know that before you even walk in the door.

So, the property itself is this.

It's a first floor three-bedroom flat

and it had a guide price of £140,000.

Well, what a nice surprise. Loads of space up here.

You've got three rooms to the front of the property,

this nice little corridor,

and then at the back, I'm presuming this is a reception room.

What have we got through here? Little bathroom.

A bit disappointing, it's a bit on the small side,

but it's nice and quiet, nice big window as well,

and then right at the back, you've got the kitchen.

Now, this certainly needs some redesigning. What have we got here?

Oh, a bonus room, everybody likes to see this.

Now, that gets me a bit excited because potentially,

you could think about opening this space up

and having a much nicer kitchen, little utility area,

you could even think about going through into there.

So, what you thought was a very poky, small reception room

has now turned into a nice big kitchen/dining/entertaining space.

This surprise room also has some stairs

which leads down to a small garden at the rear.

The three front bedrooms all seem to have a fair bit of wear and tear

while one of the larger rooms looks like it's got a damp problem.

Now, this is a teeny weenie third bedroom by anyone's standards.

A single bed measures three foot by six footish

and if you think your arm span is the same as your height,

well, I'm five foot five, and look, I can touch either side.

You will not get a bed in here.

I reckon this is a study or a cot room at best

and you would struggle to rent this out to a separate individual.

I'd say it's more of a 2.5 than a three-bedder. So, the solution?

Well, you could reconfigure the layout,

have the living room and kitchen at the front

and turn the rear rooms into two decent-sized bedrooms.

Or you could think bigger.

I've been told that the loft space comes with this flat -

ie, it's included in the deeds -

and you own the roof and the void space above.

Great, if that is the case, although I would check thoroughly,

as some vendors have been known to assume they own it

just because it's only them who have access.

But if you do, there's a clear opportunity to extend up there,

make this a proper three-bedroom and increase the value.

Loft conversions of course, well, they don't come cheap.

So, would it be worth splashing the cash on this one?

A local estate agent came along to give us his opinion.

Realistically, can you call this a three-bed flat?

You can class it as three bed because it's got its own window

but realistically, it's two bedroom plus a study.

So, with that 140,000 guide price,

what sort of returns could the flat make?

If it was fully renovated,

I'd personally value it between £200,000-£205,000.

The agent also reckons that rental returns

of £1,300-£1,350 pcm are possible,

but how much value could a loft conversion add to this property?

If it was just a loft extension, with a loft room, with an en-suite,

potentially around 10, 15,000, whereas, if it was a dormer,

which would cost a little bit more money,

you can potentially add another 25,000.

And the rentals?

Per calendar month with an extra bedroom,

you're looking at around another £300 extra.

A reasonably priced flat in an affordable area

with heaps of scope to improve.

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

Lot 89, invite your bids on this, 170 anywhere?

If not, you tell me.

Thank you. 150 I've got. 151 anywhere? Thank you. 151, 152.

153, 154, 155. 156.

157. 158. 159. More competition.

159. 160. 161. 162. 163.

164. 165. One more?

Rounded off, 166, £165,000.

Anybody else? If not, 165 for the first.

165 for the second.

165 for the third and final time.

All done? Sold. 165. Well done.

And the successful bidders were married couple Ilie and Joanna.

Joanna is from Lithuania while her husband Ilie is Albanian

and together, they help run a restaurant

and Ilie's building company.

I met them back at the flat to find out exactly what they had planned

to serve up with this property.

Guys, congratulations, lovely to meet you today.

How much did you want this flat, Joanna?

Well, we had a few properties in mind

and this one was one of our favourites

so, we came to see it twice which was,

which was only one property that we went to see twice

so we went for it.

So, what is it about the flat that you like so much? Tell me.

First, it is the location. Second, it's the size.

Third is the roof which is massive, like, really good height.

You can get...you can convert into a loft conversion. And that's it.

So, interestingly, you've spotted the potential straight away

which would be to go up into the loft but my next question,

guys, do you know that you own the loft space?

Have you checked it out?

We did. We checked with the neighbour.

We've checked with the solicitor and they said it belongs to us

-so, hopefully, it's all good.

-So, Ilie, tell me what you do.

-I've got a building company, loft conversion company.

-I love it!

You've got a loft conversion company!

I hope you can do the loft. Why wouldn't you want to do that?

Ah, now it all makes sense.

What about any structural work down here?

You've got a kitchen that doesn't really work very well.

Little odd utility room.

How are you going to make the best of this space at the back?

Well, I've looked at the chimney.

It seems not to be doing anything at the moment.

I have to check with the people downstairs as well,

but I think that we can possibly remove it all off

-and just have an open, like, a big open space there.

-Wow.

That is going to be fantastic

because this isn't the biggest of rooms.

If you can open it up, it will be fantastic.

And what about the front rooms?

Basically, rewiring has got to be done

and some of the plumbing bits,

but I think in terms of opening them up,

I'm not sure we're going to do that, probably keep it the way it is.

They aim to spend £10,000 renovating the flat

with £20,000 ready for the loft conversion.

While Ilie will be getting his hands dirty and project managing,

qualified professionals will be called in for any plumbing

and electrics that needs seeing to.

How involved are you going to be, Joanna?

Well, I'll just look for cheap materials.

That's going to be my job, to find the best prices in the market.

But he's going to be managing the team and that's going to

-be his responsibility, to do a good job on that.

-Probably colours.

Yeah, colours and design is going to be mine, definitely.

-Is that what you enjoy doing?

-Yeah, I love it, I love it, so...

Guys, good luck with this. I can wait to see the outcome.

-Congratulations. Well done.

-Thank you very much.

So, a restaurant, a building company

and a development on the side.

Joanna and Ilie have a busy time ahead

and a real opportunity to make the most of this tired flat.

Find out how it all goes

and if they do own the loft space later in the show.

I'm in the northeast of England.

Three miles from Gateshead, four miles from Newcastle upon Tyne.

This is Whickham - what's on offer?

Let's find out.

This area is situated in a high position which,

on a fog-free day, overlooks the Tyne

and I wonder while I'm on the lookout

if I'll find a property bargain.

So, I am in this well-liked and desirable residential area

and sitting on this corner plot is the property I'm here to see.

It's a 1940s/1950s semidetached, three bedrooms,

guide price was £124,950.

Bit precise that, isn't it?

But look, great kerb appeal, nice driveway, manicured borders.

Nice flowers and shrubs. Let's hope the inside matches up.

A bit of flaking paint and some maintenance to do,

but first impressions, very promising.

Well...yeah, good start.

Nice sort of open feel the moment you walk through the door.

You got your stairs leading up to the bedrooms.

Bit of storage there, but nice feeling of space.

Very classic layout for this era and style of property.

A door there leading through into your front lounge area.

Through to your kitchen. Now, this is classic.

This often lets this style of property down.

It is too small for the size of the house,

especially for today's modern living.

So I'm thinking, immediately, taking out a few walls to

open that really out into the dining room area there.

Then through into the dining room. I'm laughing.

Just noticed this on the carpet.

Somebody having a bad day with an iron.

Don't ever iron on the carpet!

But more clues for the era of the property...yeah.

Lovely, dividing doors in-between the rear dining area

and the front living room.

They probably want to come out, don't they?

As does this fire.

But what I'm seeing straightaway

is this is just a really nice, solid house.

Just needs a little bit of updating.

So, upstairs and the bathroom where it should be,

a combined bathroom and loo which is good,

and you've got your three bedrooms.

One at the back, a smaller one there at that front

and this really nice-sized big double with the bay there.

I'm laughing again because...

Bedroom wardrobes - hm.

Lovely.

# Baby, let's be forgiving

# And try to be willing

# To listen and just let it slide. #

What doesn't ever date, though, is space.

Now, this is where it all gets a bit weird,

because through this slightly small door, you come into this area.

Now, I am actually above the garage

and the little utility area.

And there is this... Well, how would you describe it?

It's a conservatory, it's a workshop,

laid out for at the moment.

A greenhouse? But, you know, it's space.

Aesthetically, it's not going to win any design awards,

and the unusual features don't stop there.

Well, at the rear of the property, it does get very, very weird.

Because you come out of the rear door onto this sort of decking area.

I mean, there's a shed, there's this fence,

and that's the neighbour's garden.

I don't know what the history here is,

whether this property sold its garden to build these houses,

or the other way round, I just don't know.

But whatever happened, it's not what you expect, is it?

Yes, it's all a bit baffling.

Can a local estate agent straighten me out

on this property, guided at £124,950?

I think this property would benefit greatly

from an extension to the side.

Perhaps take off the workshop on top of the garage

and build up to make it more spacious.

That's a fairly big job, and costly.

So, we should think about the numbers.

What if the buyer just went for a straight refurbishment?

I think if this property was done to a reasonable standard,

then you could expect to achieve about £175,000-£180,000.

And the agent reckons that extending over the garage and adding

another bedroom could take the resale value up to £200,000.

But how did rental sound without an extension?

If this property was to go onto the rental market, I would expect

to achieve approximately £750 per calendar month.

What do we think of this solid little house

with its quirky little workshop?

D'you know what? We like it a lot.

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

We are going to go to lot number 53. Any bid at £125,000?

I'll take 120 to start, or we will withdraw.

Thank you, the gentleman sitting down, at £120,000.

122 standing.

124? 124.

126?

128?

130. 132.

I'll take one if it will help. 1 bid, 131.

132. 132 bid.

133. No?

I'll take 500. 132½.

132½ bid.

500 as well? 133.

133½. No?

New bidder at 133½.

134.

134½.

134½ bid. 135?

135½?

No? We're going one to the 135.

I'm going for the second time at £135,000.

Sold to the gentleman on the back wall at £135,000.

The bidder who looked as pleased as Punch is Paul,

at the auction with his girlfriend Michelle.

He got the house for £135,000 and Paul is a local lad.

He's been buying and selling

and refurbishing property for around 12 years.

Prior to that, he worked in computer-aided design,

designing and installing industrial doors.

'I met him to find out his plans for the house.'

-Paul, good to meet you.

-Nice to meet you.

-Congratulations.

-Thank you very much.

Tell me why you wanted to buy the house.

Er, basically the price that I paid for it was, er,

it was a decent price. Erm, and the location as well.

What are you going to do with it? Is it to rent out or what?

It's for me and my girlfriend to move into.

What was it about this particular house that you really liked?

I think the size, and just the potential, really.

I think it's been well kept but it's outdated, it needs doing up.

So tell me what you're going to do to it

to bring it up to scratch in your eyes.

Well, what we're going to do is, obviously, first take everything out,

like the old wardrobes, er,

-take the wall out between the kitchen and the dining room...

-OK.

..and then it'll be a case of getting the electricians in, getting them

to redo the electrics, cos I think the electrics are on the way out.

Er, it's got a new boiler in, but it's upstairs in the bathroom,

so I want to take it down into the utility room, out of the way,

and then the new kitchen in, new bathroom suite in.

What kind of money have you got set aside for doing the work?

We've got 15,000 set aside.

Er, that's just for materials, that's not for labour,

but, er...I'll be doing most of the work myself anyway.

Paul's a qualified tiler

and he can plaster and fit kitchens and bathrooms.

But he will use a certified electrician and employ a plumber.

He thinks the work will take around six months,

and both he and his girlfriend Michelle have properties that they

have to sell before they move in

and make this their first home together.

It seems like you've done well for sure. Congratulations.

-Thank you very much.

-Good luck with it.

-Look forward to seeing how you get on.

-Thank you very much.

Well, I think Paul's done really well with this place.

It's a lovely house and it just needs a little bit of modernisation.

One thing's for sure -

I think his tiling experience will come in very handy.

How will he get on? You can find out later in the show.

Well, I'm sure all our buyers hope their journey has been worth it -

they took the right turns and avoided the pitfalls.

Decisions, decisions, have they made the right ones?

Let's go back and find out.

We now head back to Stratford in East London,

where earlier we saw this three-bedroom first floor flat,

sold at auction for 165,000.

It was bought by Ilie and Joanna, a busy husband and wife team

who help to run a restaurant and Ilie's building company.

This shabby place needed a total makeover,

and with one of the bedrooms barely big enough for a single bed,

Ilie and Joanna aim to convert the loft

to create a large en-suite bedroom.

Grand plans, indeed!

Do you know that you own the loft space? Have you checked it out?

Well, we checked with the neighbour,

we've checked with the solicitor, and they said it belongs to us.

Three-and-a-half months later,

we are back to see what Joanna and Ilie have done with this flat.

Well, it's certainly an impressive start.

Ilie has taken out that chimney to open out this space beautifully

to create a new kitchen dining room, complete with stylish new units.

The rear reception room has been made over

into a more relaxing space...

..while just along the landing, a new bathroom suite

and tiles have a real touch of class and style about them.

And as for the three bedrooms, all made over to a high standard,

and with the same decor,

and with laminated flooring throughout.

But as great as all this looks, there's one thing missing -

there's no loft conversion.

So does that mean that the question of who owns what

is still up in the air?

We do know we owned our loft space.

We applied for planning permission,

er, which we are due to get in the next week or so.

With Ilie and Joanna finally securing the loft, work will

hopefully begin soon on the second phase of transforming this flat.

But the negotiations for the freehold also led to another

big change to the layout.

So when we bought the property, the kitchen was tiny.

It had a funny room at the back, and small kitchen here,

so we knocked the wall down and make it nice and spacious.

We installed a new kitchen, new tiling, decoration, lighting,

everything was done from scratch.

And as Ilie and Joanna still plan to rent the flat out,

the garden, which we now have access to,

has been given the low-maintenance approach,

with fence-to-fence, wall-to-wall decking.

Back inside, and the flat has a great contemporary feel about it.

But having gone to all the effort of bringing the flat back to life

and giving it that impressive finish,

Ilie doesn't aim to undo all the hard work

when the loft conversion starts.

Usually, we do most of the work from outside,

so it doesn't really do much till the stage when we install the stairs.

So, by that time, they will only have cut the ceiling here

to install the stairs and then there won't be any disruption here.

Project managing the renovation was down to Ilie,

who didn't get his hands dirty as much as he'd anticipated,

while Joanna contributed by digging out the best bargains

for materials and furnishings, and decided on the final decor.'

We wanted to put a bit of style in the property,

because I think people are a bit tired of just magnolia walls in

their rented properties, so we put a bit of vintage,

retro style, which is very nowadays.

The couple took a month's holiday before getting started

on the flat, and managed to get it done in six weeks,

two weeks longer than planned.

They still anticipate the budget for the loft conversion

to come to 20,000,

but did the original 10 grand budget for this flat hold up?

So far, we've spent about £15,000,

that's including the furnishing and decoration and everything.

Add that to their purchase price of 165,000,

and the couple have spent £180,000 on the flat.

Should the flat be sold, the agents reckon that this

£180,000 investment could be sold for between 180 to 200,000.

However, Joanna and Ilie set off on this project with

the aim of adding it to their rental portfolio.

They hope to get £1,400 per calendar month

without the loft conversion,

so I'm sure they'll be more interested in the rental values.

As it is now, I would say 1,300 per calendar month.

I would say in the region of £1,300 to £1,400 per calendar month.

In fact, the good news is that, since we filmed them,

they've managed to rent the flat out for £1,500 per calendar month,

giving them an annual yield of 10%.

So will this entrepreneurial couple be dishing up some more properties?

We know we can do this, and that's...

These are the things we like to do.

We've just purchased one, just two or three days ago,

but, yeah, I think this is what we'll be doing.

Yeah.

We now head back to the northeast of England,

and to Whickham near Gateshead, where earlier we met Paul,

who bought this semidetached house for £135,000.

He has already bought, sold and refurbished several properties,

and this one was the next in line, except for the selling part,

because once done up, he aimed to move in

and live in it with his girlfriend Michelle.

The couple had a budget of £15,000,

which hopefully should have been enough, and a six-month schedule.

It was six-and-a-half months later that we returned to Whickham

to catch up with Paul to find out

if they had finally made this their home.

Well, if home is where the heart is, Paul has certainly

put his into this wonderful, fresh and spacious new downstairs layout.

And it's farewell to that tiny kitchen

and hello to a spacious open-plan kitchen-dining room,

perfect for modern living.

And upstairs the bedrooms have been given the same treatment.

Those sliding wardrobes have slid off into history to be

replaced by contemporary units much more suited to the 21st century.

And overall, I think Paul's got

a lot to be pleased about with this renovation.

Over the moon.

Very rarely do you buy a property

and it works out exactly how you want,

but for this property, it's just...

Yeah, I'm absolutely over the moon with it.

Quite right, too.

He's certainly added a lot of space down here

by creating a new downstairs layout.

For the hallway, we got rid of this entrance

from the hallway to the kitchen, made that a cupboard.

As a consequence, you've got to walk through the living room.

We got rid of the sliding doors,

opened this area up, which is a nice open space.

We took the wall between the dining room and the kitchen out

and now we've a lovely entertaining area,

which we've already had a couple of parties in

and it is great for entertainment.

The workshop was finally taken down.

But that meant the garage had to have a sloping roof installed

and the newly exposed wall rendered.

At the back, the garden has had a decking overhaul,

but its limited size means that what you see is what you get.

For the house, Paul got his usual team of certified professionals in

for the electrics and plumbing

with the remainder of the work being done by himself.

And since this was going to be their new home together,

girlfriend Michelle gave Paul a helping hand.

Michelle did a lot of the painting and decorating.

To be fair, her input was a massive help to me

because any job that I gave her, she was brilliant.

She's never picked up a paintbrush in her life until this house.

To be fair, she was absolutely fantastic.

You'd expect a house that would be their own

to have a high standard of finish, and this place does not disappoint.

But would that come at a cost to their budget

and their six-month timescale?

We hit the target in moving in. However, for the budget,

I said originally I thought it was going to be about 15,000.

It ended up being about 18,000.

With that renovation cost added to their purchase price of 135,000,

the total outlay for the house is now £153,000.

So, time to find out from two local estate agents

if it's money well spent.

We start off with the agent who visited the property

before Paul got his hands on it.

If I was to put this property onto the market,

I would recommend an asking price of £185,000.

I think the property could be worth somewhere in the region

of £175,000-£185,000.

Those valuations mean that Paul and Michelle

could stand to make a pre-tax profit

of between £22,000-£32,000.

Over the moon with that. That means that everything is covered anyway.

So all the hard work was worth it. So, yeah, happy with that.

Paul has carried out a really fantastic refurbishment

to this house and created a lovely, cosy family home.

But with those possible profits,

is he tempted to treat it like his other projects and sell it on?

As far as the figures are concerned, fantastic price.

I mean 185 at the top.

But it's irrelevant, we're going to stay here,

hopefully for a long time, and maybe start a family.

That's it from the plucky buyers on today's programme,

but there's plenty more where they came from.

So join us next time for more Homes Under The Hammer.

-Goodbye.

-Bye.