Episode 8 Homes Under the Hammer

Hello, now people get involved in buying property

for all sorts of different reasons,

either as a place to live in or work in, or to rent out or sell.

But the main concern is getting value for money.

Now, how do you go about doing that?

Well, maybe buying your next home under the hammer.

Now, you do need to do your homework before you buy at auction.

But once that's done, you could get yourself a real bargain.

So here are the potential money-spinners that went

under the hammer on today's show.

This purchase in Deal, Kent, proved a big surprise for our buyer.

And when I got it, I couldn't believe it.

While in Derby,

the best reason I've heard yet for getting into the property game.

It's made me feel young again, something to get up for.

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.

# It's a done deal... #

This is Deal in Kent, just eight miles from Dover

and the south coast. And what a beautiful spot it is, too.

Miles of beach, a castle, narrow, winding shopping streets,

just lovely.

And I reckon, if you are after traditional seaside charm

with a boutiquey vibe, then Deal is your destination.

You can walk from the beach to the property I'm here to see

in under a minute.

Which is amazing! And the property

itself, well, it is a three-bedroom maisonette,

and it had a guide price of £85,000.

This maisonette is on the first

and second floor of this bay-fronted period property.

First things first, this place feels huge. It is huge! Wow!

It's incredibly dated. Look, there is woodchip wallpaper for days.

This will take you for ever to get off but it will be a worthwhile job.

The kitchen towards the back, again, that will need to be ripped out.

You have got a little bathroom through here.

I'm just wondering whether you have got any nice spindles here.

So far, all the character has been stripped out of this place.

Nice big room, you could have it as a bedroom, living room,

not quite sure what you would do with it.

You have the stairs leading to the upper floor and wow,

look at this room!

At the front of the property it's really sunny and bright

and on a day like today, it really is fantastic.

It would be great for entertaining.

Look at this amazing bay window, although on closer inspection,

you might want to get that refurbished.

Check that out, a seaside view, marvellous.

I think this property has lots of potential

if this floor is anything to go by.

So what about upstairs?

Not a bad master bedroom. Again, needs a bit of work.

It gets worse as you go on. The blue room through here is very eaved.

Lots of wallpaper falling on the floor

so I would want to inspect the roof space.

And the beigey room, well, very small.

So you do have three bedrooms but they all need work,

so whoever takes this on better have their cheque-book handy.

The property is in a great location,

so you wouldn't miss the absence of a garden.

I think there's a lot going for it at that guide price of 85,000.

Did a local estate agent agree?

What value would he put on this after a refurbishment?

With a decent refurbishment and updating,

I would estimate a value between 150 and £160,000.

Wow!

So if you were able to get it at anything like the guide price,

there could be a significant profit to be made,

even after refurbishment costs.

Would it be a good buy-to-let investment?

Could it achieve a decent rental?

I would anticipate in the region of £650 per calendar month.

On a sunny day, it is so easy to get carried away

and just fall in love with a property by the seaside.

But in this instance, it makes sound business sense, too.

Let's see who else fell for this one at the auction.

Good-looking property. It is a large maisonette.

Three bedrooms, needs some improvement.

But close to the seafront and good for the town centre as well.

I guess we would like to start at £85,000.

Where'd you want to start me? Ever the optimist.

Where are you going to start me?

85, I've got, straight in, £85,000, to the lady at the back.

At 85,000, at 85. Now 90. At 90.

I've got the bid of £85,000 from the lady

sitting at the back on the aisle, at £85,000 I've got, then.

Maiden bidder. £85,000 sitting at the back for the first time.

If there's no other bids? It would be a good buy at £85,000 or 88.

-Second time at 85...

-86.

-86,000, you heard his voice. £86,000. 87 now?

At 87. And eight. 88.

At 89,000, I'm waiting.

At £88,000, standing then by the entrance. 89, it's against you.

If you're done, for the first time at £88,000? She's not, 89. Make it 90?

At £89,000, it is back with you, then, for the first time,

second time at £89,000...

Third and final time at 89,000, sold. £89,000.

And the bidder with the red hat on is Mary.

# Show me Mary

# How does it go?

# Show me Mary

# Show me Mary...#

Mary is a retired housekeeper from London, where she currently lives

in a rental property and she has bought this maisonette for £89,000.

That's only 4,000 over the guide price.

Well, I said this was a business opportunity.

I wanted to find out from Mary if that is what made her come to Deal.

-Mary, congratulations.

-Thank you.

-You got a deal here.

I mean, it is amazing that this was not that much over the guide price.

-No.

-Was it just a lucky streak, do you think, on the day?

I think so.

I mean, when I looked at this place, I fell in love with it straightaway.

To be honest, I didn't think I'd get it.

I said, "Oh, no, there'll be so many people after it, it's hopeless."

And when I got it I couldn't believe it!

Mary got started by selling her own home in Forest Gate,

London, which she originally bought in 1977 for £9,000. Blimey!

As we speak, Mary owns and rents six properties in different

parts of Kent, so what are her plans for number seven?

I would probably let it out.

Eventually, I'll sell it but I will let it out first,

maybe move in to it.

Have you got a vision in your mind of what this place is going

-to look like?

-Oh, yes. It will be a lovely new kitchen,

a new shower, new carpets.

What sort of budget have you put aside for a job like this?

-Maybe 10 to 15,000.

-Really?

Mary plans to finance the project through the rentals

she collects from her other properties.

She has estimated a timeframe of just two months to complete

the work.

You don't seem fazed by any of this or stressed at all.

No, no, I just love property.

Mary, congratulations, good luck with this project.

Thank you very much.

Well, Mary has got a cracking deal here in Deal, and I'm sure

with her experience, she will get it sorted out in no time at all.

You can find out how it goes later in the show.

Derby, with a population of just under a quarter of a million,

is a thriving city.

With a history of local manufacturing,

it has been key since the Industrial Revolution.

The property I am here to see is just a mile-and-a-half south

of the city centre.

A two-bedroomed, ex-local authority property which, according to the

auction catalogue, requires a scheme of renovation and improvement.

That could explain the relatively low guide price of £30,000 plus.

Now, of course, renovation

and improvement can mean a whole lot of different things to

a whole lot of different people, from a quick lick of paint to

knocking down walls and taking out fireplaces.

First thing I'd say is strip the floorboards back. I like those.

That would be beautiful.

Um, you're going to have to do something with the roof,

but the layout is quite nice.

Basically, large living room here and then through to the kitchen.

You could contemplate taking out this wall here to create

a real nice, open-plan living space, which would be quite pleasant.

The kitchen itself, whatever you do, is going

to need total refurbishment.

Um, uh-oh! As will the electrics, by the look of it.

Of course, that's something you need to be looking at

when you come to see a property.

Look to find where the electric board is.

Old, cartridge-type fuses with a bit of fuse wire in them,

that indicates the whole thing is going to have to be ripped out and replaced.

But, doing the renovation, you'll probably want to do that anyway.

At least you'll know the house is then sorted.

One thing I don't notice down here is a loo, which is good news,

because it means it's upstairs. Fantastic.

And, yes indeed, there it is - complete with a fine example

of that great bathroom favourite, an avocado suite.

So, a completely new refit is needed here, I think,

to bring it up to modern standards.

The bedrooms are both a good size,

although when you have installed your new central heating,

you could get rid of that hot water tank and make this room even bigger.

And the garden has space in spades.

The only slight issue is, only half of it's yours.

At the moment, it's very sort of communal.

Either you think about keeping it like this,

if you get on with the neighbours, or you put a fence in here.

Other than that, it needs a bit of tidying up.

Useful little old air raid shelter there, which you can store stuff in.

But what I'm much more interested in is this.

It's basically access to an outside loo. At the moment,

you can't actually get in there because it's full of stuff.

Now, much as I love outdoor loos, I think that space

could be much better utilised in the kitchen.

So, basically, knock down that internal wall,

open up the kitchen, that'd be great.

Other than that, just a few hours with a Strimmer

and a hedge trimmer and you'd be well set.

Let's find out what a local property expert thinks about this house.

The big question is, with a guide price of £30,000, is it worth

spending a lot on refurbishing this house for sale or rental?

Once renovated, this would have a value, in this location,

of probably no more than about £75,000.

In terms of rental value,

you would rent this out all day long at £475 a calendar month.

Hmm! Well, a bit of renovation required indeed with this one but,

intrinsically, a good house.

So, let's see who fancied it when it went under the hammer.

Lot number one is in the Cavendish area of the city.

It's a two-bedroomed town house.

Would somebody like to start me at 25,000? 25,000 for it.

Who's got 20 to start me? Thank you, sir. £20,000 is the opening bid.

21 somewhere?

21 I've got at the back. 22 is bid.

23, 24, 24, 25, the lady has bid.

26,000, 27 is bid.

28 I've got.

£29,000. 30 is bid here.

At 30,000... 31...

'Plenty of interest for this one, then,

'and bidding continued at a fair old pace in £1,000 increments

'until it reached £46,000, which is where we rejoin it.'

£46,000, I'll take five...

46,500, 47,

47,500, 48,

48,500, 49,000,

49,500, 50,000...

£50,000... 500, 51 is bid.

£51,000, 500 elsewhere?

At 51,000, it goes for the first time, for the second time...

500, 52.

At 52,000... At five again?

500, 53, 53,000.

Definite? £53,000, going once, going twice, third time...

Yours, sir, well done. 53,000, thank you.

Well, that was a frantic auction, but the man who got it

when the gavel finally fell was retired civil engineer, Pat.

Pat retired four years ago

and he bought this property with an eye to enhancing his pension.

He came to meet me back at the house with his eldest son,

also called Pat.

-Pat, Pat...

-Yeah.

-..great to meet you both.

Tell me why you wanted to buy this place.

I was bored out of me face sitting at home,

because I retired two or three years ago,

and I bought a caravan in Skegness, I've still got it

and I'm still bored, so I thought I'd go and buy a house and do it up.

Right, so the money side of things didn't come into it?

-The money side, I obviously do want a profit.

-Right.

I haven't done it to lose, but if I break even, I'd be still happy.

Right. And what's your involvement going to be?

He's going to replaster, rewire, plumb radiators,

-and then they're getting the blokes in to redecorate...

-Right.

..skirting boards and everything like that.

-So whose house is it going to be?

-My dad's. It's yours?

-Mm-hmm.

-Fantastic.

With a view to renting it out, or selling it on?

No. If it's successful, I'll want to sell it straightaway.

I'm going to put it on the market for two months,

and if it doesn't sell, it's going back to the auction.

-Right.

-With a reserve on.

Buying a house because you're bored is something I've heard before.

But their devil-may-care attitude about being happy

if he breaks even is definitely a new one on me!

What do you think about what your dad's up to?

If it makes a profit, he's done a fantastic job. If you're losing money, he's an idiot.

But can't you convince him to, like, take a bit more of a leisurely life, kind of thing?

He's a young 69-year-old.

But surely there are less stressful ways of keeping busy.

What about, like, hobbies like golf or... You know?

-I don't want to be playing golf.

-No?

It's not my sort of hobby, no, definitely not.

Tell me what you're going to do to the place.

New windows, new doors externally, all new doors internally,

architrave, skirting board, kitchen, central heating...

-New radiators, central heating.

-It's all been ordered now.

And as for the open-plan situation out the back,

there are plans to put up a fence.

And who's going to begin the work, then? Are you going to be...?

-I've got contractors in.

-I'll be here as well.

Are you going to get your hands dirty a bit?

Oh, without a shadow of a doubt.

I can decorate and paint and I can do quite a few things.

And in terms of internal layout changes, any plans for that?

Just the kitchen. We're knocking a couple of walls down on the far side

-and one wall where there's an outside loo.

-Right.

We're knocking that down.

What amount of money are you going to spend on it, do you think?

-I'd say...

-No more than 12.

-Definitely...

-No more than 12,000.

-No, no more than 12,000, no.

-A timescale?

-Three months.

-Three months.

So, all in all, excited about taking it on?

Yeah, I'm...

It's made me feel young again.

-It's made me feel something to get up for.

-Good, well, congratulations.

-Lovely to meet you both.

-It's nice to meet you as well.

-Good luck with it, look forward to seeing how you get on.

-Nice to see you as well, like.

Well, the two Pats certainly seem to have got it off pat

when it comes to doing the renovation.

Will it be pats on the back at the end of it all?

Well, you can find out later in the show.

Well, it has been quite a few months since we last saw those properties.

Do they look any different?

Has all that time and money been well spent?

Let's go back and find out.

What could be better than to be beside the seaside in a light

and airy place with a sea view?

Well, that's what we found

when, earlier, in the coastal town of Deal in Kent,

we saw this three-bed maisonette that was just seconds away

from the seafront and with a sea view from its bay window.

The first floor definitely had a touch of charm about it.

Unfortunately, the top floor was more "ugh".

It was bought at auction for 89,000 by Mary, a retired

housekeeper from London who was surprised to land the property.

Mary had 10,000 to 15,000 to spend on what she hoped

would be a two-month renovation job.

But it was eight months later we caught up with Mary to find out

if her place in Deal was now ideal.

The front room, with that lovely, big bay window,

is certainly looking good. And to help the place feel more homely,

Mary's placed some items of furniture that certainly add

a touch of class to the surroundings.

Next door, the second reception room has been redecorated with

brand-new carpet.

At the rear of the maisonette, the old shower room has been

replaced with brand-new units and new wall and floor tiles.

But it's the kitchen that has had the major overhaul.

With contemporary new units and tasteful tiling, it was,

for Mary, the most crucial aspect to renovating this maisonette.

When I saw it, it was in a terrible state.

It must have been about 40, 50 years old.

I knew it was a complete write-off. It was horrible, and the windows...!

But I was determined it was going to get done. And it did in the end.

Upstairs, the three bedrooms have been redecorated, all in soft,

neutral colours that can look good when bathed in sunlight.

So the maisonette makeover is now complete.

The electrics were up to scratch, so no rewiring was necessary.

But several walls needed replastering, and some still had on

that dreaded woodchip wallpaper for Mary's builder to contend with.

The horrible woodchip, it all had to come off.

And I even came back once and watched him.

And what a job they have to do to get it all together!

Ooh, I wouldn't like to do it, I tell you.

Neither would I, Mary, neither would I!

Stripping woodchip wallpaper is one of the worst jobs

when renovating and, more importantly, it's so time-consuming.

But surely that didn't account for the six-month overrun?

I had to get permission to get the place done as it was a leasehold.

And, unfortunately, it took about two months to go through.

I was nearly giving up, but I got the permission in the end.

And Mary's verdict on the final result?

I am really delighted with the place now. I think it's fantastic.

And to get that pleased look from Mary,

it took more than she expected,

with her original budget of 10,000-15,000 pushed to £17,000.

With her purchase price of 89,000,

that would take her total spend to £106,000.

And while overspending on the budget is no-one's cup of tea,

the location here certainly makes up for any downsides.

Oh, it's the coast. I've got a thing about the coast.

I've always liked water. I just love...

I mean, I'm born under Pisces, the fish, if you believe in it,

but I've always had a thing with water, you know.

Mary is really pleased with the maisonette

and she's keeping her options open.

A smart move in a very uncertain market.

What do two local estate agents make of her investment?

I think if this property were let now in the current market,

it would have a rental value of about £650 per calendar month.

I would recommend a rental value in the region of £650 to £675

per calendar month.

If I can get even 650, 680, that would be good.

If either those valuations could be met,

then Mary would get a healthy annual yield of around 7.5%.

But having spent £106,000 on the maisonette,

what sort of resale value could Mary achieve?

I think the value of selling this one now is going to be

something in the order of £140,000 to £145,000.

I would consider a market value for this property in the region of £150,000.

If Mary could get either of those figures,

then she could stand to make a pre-tax profit of 34,000-44,000.

Oh, that's not bad. Not bad at all.

So it's another successful addition for Mary's portfolio,

but even now, she's got no intention of putting her feet up and relaxing.

I'm selling the property, then I'm going to use the money to

buy another property at auction and see if I can get that done up.

See what I can make out of it. I mean, any...

Even 15, 20 grand is OK without killing yourself, isn't it?

We're returning to Derby and this two-bedroomed

mid-terrace which was bought at auction

for £53,000.

Pat senior, together with his elder son, Pat,

planned to renovate the property with a budget of £12,000.

We came back after just two months to see

how they'd got on.

In here, as you can see, there's a big transformation.

There was a big brick wall there which we knocked down.

There was a wall across here which was a brick cupboard which

we knocked down.

Got everything back to the bare brick and re-boarded and re-plastered,

and fitted a new kitchen, which I think worked out pretty well.

So, that outside loo we couldn't even get into has been

incorporated to help make this a bigger, brighter kitchen.

Upstairs, too, they've given each room a complete overhaul.

I done the whole thing, tiled it,

new bath and new toilet and new sink. Tiled the floor.

Decorated it. I done the whole thing. I'm very pleased with it.

The central heating has been refitted throughout the house,

freeing up space in the second bedroom where the old water

tank and immersion heater were.

We painted all the paintwork and obviously the new windows and everything.

Done all the garden. Moved the shed.

-The air raid shelter is still there, actually.

-Yeah.

And Pat has also erected a fence between his property and next-door's.

So how did the budget pan out?

The original budget, I said I wouldn't go over 12,000

but it's got to about 14, I think.

It went to 14,200, but it takes what it takes.

And I'm still delighted with it anyway.

-Still a bit of profit in there.

-Yeah.

Pat's total spend is £67,000 and although he said he'd be

happy to break even, his son thinks there's a bit more profit in it.

Would two local estate agents agree?

We invited two along to ask their thoughts.

The house looks really tidy, really smart now,

it's like a brand-new house inside.

It has everything done to it, new heating, new windows, new doors,

new timber work, re-plastered. It's like a brand-new house.

It's a really good job.

It's done to a fairly good standard.

It's not the best, but it will certainly do.

Nice and clean so, yeah, looks good.

Let's see if they can agree on what it would be worth

if Pat chose to sell it.

I think if we were to put this property up for sale,

I'd be looking at achieving around about £80,000.

I think we would put the property on the market at £79,950.

I've already been quoted 85 to 90.

Well, that didn't impress Pat much.

Let's see if they fare better with their rental appraisals.

If we were to rent this property out, I think

£450 per calendar month would be achievable.

I think this property would rent at £450 per calendar month.

It would never be rented anyway.

-It's not bad that, is it?

-No, it ain't.

Pat's been clear all along that he bought his house with

the intention of fixing it up and selling it.

With that auction price of 53,000,

plus the £14,200 renovation costs,

even if they sold at the estate agent's valuation of £80,000,

it's a profit of around £13,000 minus taxes and expenses.

So, how has the whole experience been for the two Pats?

It's the same as father and son working anywhere.

You have your fallouts, but we still get on all right

and we still walked out the house every night happy enough.

We come happy enough and then we started.

Well, Lucy and I hope you enjoyed watching Homes Under The Hammer

and we'll have lots more stories for you next time.

Yes, join us then for some more hot properties and maybe

-some not so hot properties. Goodbye.

-Goodbye.