Episode 10 Homes Under the Hammer

Hello. Like many people, Lucy and I are extremely interested in property.

And that means every aspect of it.

I'm always on the look-out for a bargain.

So where can you get hold of one?

One option might be to go to your local auction.

There are property auctions all over the country throughout the year

so you really are spoilt for choice.

So what properties made our buyers part with their cash on today's show?

Let's find out.

In Cumbria, I get my hands on quite a pair!

This is the chimney breast from the two chimneys downstairs.

One there, one there, coming up into a central chimney here.

In east London, I bang the drum for fixing the peculiar layout

of this first-floor flat.

Ta-da!

And in Derbyshire, who could ask for more than this?

What you have here is just a really straightforward nice family house.

All of 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 at 52,000.

The town of Whitehaven is a popular place for Cumbrian commuters

who want to live within easy reach of Carlisle.

There are villages and small towns nearby

that are definitely worth a look,

not least because they're in such a beautiful landscape.

Just outside Whitehaven is the small rural town of Cleator Moor.

Absolutely stunning location,

right on the edge of the Lake District fells.

It's also got passing through it this, the coast-to-coast cycle route

which takes you all the way from Whitehaven to the north-east coastline.

Cleator Moor's skyline is dominated by the Dent Fell.

So if you like the great outdoors,

this is the place for you.

If you prefer the great indoors,

there's also a decent selection of shops.

Just a few minutes' walk outside the centre

is the property I'm here to see.

Two-bedroomed mid-terrace. Had a guide price of 35,000 quid.

Take a look!

Not a lot of money, then. Do you get much property?

Well, let's find out.

Through the front door, straight into your living room.

Yeah, it's OK.

It doesn't smell damp. It looks like it's in half-decent condition.

Stairs here up to the bedrooms.

Then through to your rear sitting room.

Originally that would be where the property would have ended.

Basically this would have been the kitchen, et cetera.

I notice there's a bit of damp going on in the corner here.

That definitely needs to be checked out.

But at some point, somebody has extended the property out here.

And this now creates your kitchen.

My guess is it's a single-storey extension.

You're always dubious about whether it's been built properly,

has it got cavity walls, but they look reasonably thick so hopefully they are.

If you're going to find damp, you're more likely to find it here.

But so far, so good.

There's certainly accommodation on the ground floor

thanks to the extension.

And the kitchen looks to be in good condition.

Apart from the damp in the rear reception room,

the window's rotten, so that will need replacing.

But there are some lovely original features.

Upstairs, there's a bathroom suite in fair condition,

which, given the colour, is a shame, really!

The bedroom at the front of the house is a good-sized double.

But hang on - we appear to be missing a bedroom in this allegedly two-bed mid-terrace!

A-ha! This is where it is!

Up here in what I imagine was originally the attic or loft space.

It's described in the catalogue as having two bedrooms

So it's obviously got the required planning permissions et cetera.

You'd want to check whether or not it meets current building regulations

but in terms of a space, I really like it.

You've got a roof light throwing lots of light in here.

It's reasonably lofty, which is good news,

and then you've got this absolutely fantastic feature.

This is actually the chimney breast from the two chimneys downstairs.

One there, one there, coming up into a central chimney here.

This is a real nice additional bonus to the property!

It's a welcome surprise you could easily miss from the front of this house

that went to auction guided at £35,000 plus.

The pebble dash and windows appear OK,

but the roof looks as though it's original.

And it's a similar story at the rear of the property.

But check it out, because as we saw inside,

at least one window is rotten.

Inside, the property pretty much like most two-bed terraces

that you come across.

But when you come out the back here, it all goes horribly right!

There's a garden, which is quite long,

but then at the end of it there is this.

A most magnificent view of the Lake District fells.

Fantastic!

With its huge garden and fantastic views,

at a guide price of £35,000 plus,

this place ticks a lot of boxes.

We invited a local estate agent to come and have a look at it

and tell us where it sits in the local property market.

The area's nice. There's quite a lot of families and older people.

The property itself has got lovely views from the rear.

Downstairs is quite sizeable.

The upstairs is on the smaller side.

Just having the one bedroom and an attic room.

There's definitely potential to make more of the attic space.

But is there any way of making the space more family friendly?

You could actually put in a double extension so it gives you enough bedroom

and also an extension of living accommodation downstairs.

An extension's a possibility.

But would it be worth spending the money on it if you were an investor?

Let's crunch some numbers.

What if this two-bed terrace guided at £35,000 plus was just renovated?

What could it sell for, and what rent could it achieve?

Once renovated, I imagine it would get somewhere in the region of £85,000.

And for rental, you're talking probably round about £350 per calendar month.

What impact would an extension have on those valuations?

If you were to extend the property and put a two-storey extension on,

you're probably talking about £95,000 for the re-sale

and for rental probably round about 400 to £450 per calendar month.

Hmm. Might be a bit tricky to make an extension work if you're an investor.

But if you're buying to move in,

you might just go for it.

Well, it's a good-sized house in a really lovely location.

There's work to be done inside,

but all in all, I think a good one to go for.

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

Let's move on at 27.

Two receptions, two-bedroomed mid-terraced property.

Bedroom and bathroom to the first floor,

second attic bedroom.

Right. 35-plus. Let's get this one away.

35, anyone?

At 30, then?

30 I've got seated.

At £30,000 we're in.

32? 32 I've got. 34.

34. 36?

36 I'm bid. And 38.

And 40?

39. And 40?

And 41.

42. 43.

Shaking her head at 43.

With you, sir, at 42. You've been with me all the way.

At £42,000. Are you out, sir?

At £42,000. First time.

42 second time.

And £42,000, then. Third and final time.

All gone, all out. Selling away.

You sir. Well done.

That successful bid of £42,000 came from Neil

who was at the auction with his wife, Joyce.

Neil's a printer, and he and his wife live a quarter of a mile up the road.

I met up with him at the two-bed mid-terrace

to find out his plans for the property.

-Neil, great to meet you.

-You.

-Congratulations.

-Thanks very much.

-Why did you want to buy this place?

We've been looking for a cottage, a bit further, sort of semi-rural.

Rather than being stuck in the middle of a town,

more semi-rural, nice views from the front, back and side.

So I was driving past it one day on the way to my mother-in-law's

and I thought, "There's a house there. Shall we have a look?"

So it just went from there, really.

-Right.

-Yeah, and we come up trumps with it.

Apart from the views, what was it about the house you liked?

When I first came to look at it, the estate agent showed us through

and I didn't get to that door.

I looked through, looked upstairs and walked back out and thought, "There's no potential in this."

So I went back and I went for a bike ride.

Then all of a sudden, I seen the potential.

For some reason, I don't know why, I could see the potential and I could see it finished.

So I came back and done another look at the house.

Then I seen it in a totally and utterly different light.

'I'm really pleased Neil's bike ride got him thinking

'and that he decided to come back and take a second look.

'Otherwise he could have missed out on this. What's he got planned for the inside?'

What are you going to do to sort it out?

My first impressions were open plan.

I think we'll take away that wall

which is the staircase,

put another staircase in its place,

open that fireplace up with a natural log burner.

And I'll make a kitchen area through there and a nice utility.

The bathroom, as it is now, I'm going to open all that up

and put a new bathroom suite in.

At the moment it's run off a header tank.

So I'd be going combi-boiler.

New radiators. Maybe replaster the walls.

That's quite a long list of jobs,

but Neil won't do all of it himself.

His nephew, who's a builder, will be doing the structural work

and he'll hire plasterers, electricians and other trades.

Neil has already sold his own house to a work colleague

so whilst he and his wife are waiting for this place to be finished,

they're living in their holiday caravan on the Solway coast.

Naturally, he's keen to get this finished before winter sets in.

-And what's the budget?

-I'm looking for no change out of £12,000.

If it goes beyond that, I'm looking at 13, something like that.

What about the top floor? There's an interesting attic room, isn't there?

-Yeah.

-What are you going to do with that?

It's got a fantastic feature. The two chimney breasts running into one.

I could just see a bed going in between it and a headboard.

It'll be a second bedroom, definitely.

Have you checked out if it's building regulation compliant?

Not at the moment, no, but I'm hoping it is.

It was sold as a two-bedroomed house.

What about outside, at the back? There's a bit of space.

There's a long narrow garden. It's overgrown.

It needs doing.

It'll be very, very low maintenance.

Maybe a bit of decking. But definitely a lot of paving.

-Great. Congratulations.

-Thanks very much.

-Good luck. Look forward to seeing how you get on.

-No problem.

A spontaneous purchase from Neil after a sudden change of heart about the place.

But he certainly seems happy with it now, especially those views.

Lot of internal walls coming out, though!

Hope it's still here when we come back later in the show!

This is Canning Town in east London.

A place that seems to have suffered more than its fair share of lows over the years.

Developed as an industrial area,

it gained the reputation as one of the worst Victorian slums.

Attempts to revamp it in the 1930s were thwarted by bombs in World War II.

And in the 1960s, high-rises loomed over the landscape.

But now, regeneration is on its way

with nearly £4 billion of planned investment

and a feeling things can change in Canning Town.

They certainly can, can, can.

There are really good transport links to the City and to Canary Wharf

and the Olympics have brought nearby suburbs along in leaps and bounds.

Now it's Canning Town's turn.

High kicks all round.

When it comes to housing stock in London,

Victorian terraces are always best sellers.

So I'm pretty pleased the property I'm here to see is at the end of this road.

It's a top-floor flat and it had a guide price

of 120,000 and three bedrooms.

Seems a lot for a house of this size? Just check it out.

Now, you might expect three beds if this was one whole house,

But a three-bed first-floor flat?

I've got to see this to believe it!

I'm not going to be polite about this.

Because it absolutely stinks of damp in this flat.

So a bit worrying straightaway.

You can see it's been neglected.

All the plaster peeling off the wall.

And the kitchen! Normally, you'd expect this room to be the bathroom.

I've seen hundreds of these flats.

And that's a really unusual place to put the kitchen.

Here is the bathroom. Probably one of the smallest bathrooms I've ever seen.

Very small bath. But I could live with that.

And then right at the back of the property,

is the tiniest of bedrooms!

Look, that's the culprit. That's where the damp's coming in.

Total neglect. It absolutely really does stink!

And I know I'm always going on about "bring the outside in", but not literally!

I mean, look. Really, really not a good start.

The place is riddled with damp, so a full survey wouldn't go amiss here.

Back past that teeny-weeny bathroom, past the titchy-witchy kitchen,

towards the front of the house, where things start looking up a bit.

At least this room is a decent size

but what is it?

One of the three bedrooms? I think this is probably the sitting room

so there must be two more bedrooms above the front door.

Oi-oi, that's a bit strange.

This is where I expect to see two lovely sashed windows,

the room bathed in sunlight.

And this might be a bit of a clue.

Ta-da!

Yes, somebody has just shoved two walls up

to create two separate rooms.

You've got one here. Again, it's tiny.

And this is poky!

You would hardly get a single bed in here.

It really isn't working for me.

I would like to take all these walls down,

open this space up and have a really nice living room.

So that's sorted. Where's the kitchen going to go?

Hmm. A bit of a puzzler.

But I think the best bet is to re-jig the current kitchen/bathroom area

and make a decent-sized bathroom there.

Keep this room as the master bedroom,

and make the front of the flat into an open plan kitchen/ dining room/living room.

That would mean turning a three-bed flat into a two-bed.

But the layout would work so much better!

What does a local estate agent think?

The number of bedrooms should be reduced to two.

The three bedrooms are very small

and they just don't work.

It's been done for a rental purpose and it just doesn't suit the property.

A man after my own heart!

Bearing in mind the guide price of 120,000,

what impact would re-jigging the flat have on the re-sale value?

Converted back into a normal, a proper two bedroom

should be around 230, £240,000.

So still a very tidy potential profit there

on that re-sale valuation.

What about the rental market?

The rental for this property

as a two-bedroom would be between 1,100 and £1,200 per calendar month.

This could be an attractive two-bedroomed flat

in an area due for an uplift.

Which may take values with it.

Let's find out who fancied it at the auction.

Move on now to 213.

Three-bedroomed first-floor flat.

140, anywhere?

Somebody like to start me off?

OK. We'll start there. 120 I've got.

121 anywhere?

121. Thank you. 122.

123. 124. 125.

126. 127. 128.

129.

129. 130. 131.

131. Thank you. 132.

133. 134.

135.

Have a think about it. It's with you, sir. Bid's at 134. 135.

136. 137.

137. 138.

139. 140.

141. 142. 143.

144. 145.

146. 147.

148.

149. 150.

151.

151, sir? No? OK.

Leave you to it.

The bid's with you, sir. £150,000.

Against the gentleman in the middle.

Anybody else for lot 113?

If not, 150 for the first,

150 for the second.

151. Nearly.

151. Sorry! 152.

153. 154.

155. 156.

157.

157. 158.

159.

No?

Back with you. Bid's £158,000.

Against the gentleman at the back there.

Anybody else?

If not, 158 for the first.

158 for the second.

158 for the third and final time. Are we all done?

Sold. 158. Well done, sir.

That successful bid of 158,000 was placed by Jason,

who's a property developer.

I met Jason's business partners, Adam and Trevor, back at the flat.

Trevor spilled the beans on exactly what happened on auction day.

I was there that day. When I turned up, it was very busy.

And I looked at it and the lot number was 100 and something

so I thought, "I don't want to stay here all day", but Jason stayed. He was bidding on a few lots.

The ones he went to buy, he didn't get.

So he stayed around. I went back to the office.

He phoned me and said he'd seen a particular property,

and I thought, "OK." And he told me what it was, a three bed.

I thought, "OK. Sounds good." And he said he'd bid on it.

Did some figures on it, told him, he went back to the auction.

He phoned back ten minutes later and said, "I've got it."

I thought, "Fine. Fantastic."

So you hadn't even planned to buy this flat on the day?

No. We hadn't seen it, either.

You didn't want to walk away empty-handed.

He didn't. He's very determined.

He's that kind of character.

But when we checked the documents, ten minutes later when I looked at it,

I thought it was a three-bed house.

So we had it in mind it was a house. Well, I had it in my mind it was a three-bed house.

And it turned out to be a three-bed flat.

So it was quite funny at the time.

That's not really something to laugh at. There's quite a difference there in price.

Three-bed house or three-bed flat. So you must have thought you had a bargain!

-Yes!

-Yeah.

-But...

So what's your involvement going to be in this project?

Basically, I'll look after all the construction works

that take place within this flat-not-house!

OK. You've got a couple of walls that you can literally push down!

Exactly. We shall be doing so.

The figures actually still stack up even though it is a flat.

So we were actually quite lucky!

'I don't know if lucky is the word I'd choose!

'Remember the golden rules? Do your homework, view the property and don't buy blind.

'You could end up in a world of pain

'or at the very least in a rather damp and dingy flat.

'But these guys are seasoned property developers

'and have the contacts to investigate the source of the damp.

'So what are they going to do about the dodgy layout?'

With your professional hat on, how do you see this property?

Obviously whoever was here before has tried to cram in as many bedrooms as possible.

How do you see it?

Basically, we've applied for planning to turn it into a four-bed flat.

-If it doesn't go through...

-A four-bed flat?!

-We can go up.

-What?! I am so surprised you said that.

-A four-bed flat?!

-Yes.

-It's bad enough as a three!

We're going up. It's not out of what's existing. It'll go up a little.

Otherwise, it'll be two-bed. So I'd knock down the wall next door

and join both those rooms,

bring it out a bit and have an open-plan living room / diner / kitchen area.

-So you're going to move that kitchen.

-Yes.

-Good. It doesn't work there at the moment.

And the bathroom will move into the kitchen space.

And it'll open up that back bedroom a bit further as well.

-Absolutely.

-So that increases the size there.

So you've got two good-sized bedrooms as opposed to lots of small ones.

Do you think you'll get permission to go into the loft?

We don't know till we try!

Do you not think that might be overdevelopment of this flat?

Possibly. But the thing is,

if we can purchase the freehold, then we can look at our options from there.

Whether we're going to rent it, we haven't decided.

Whether we'll get the option to have planning on there

and not do the work, just do it as a two-bed and then sell it on with the planning.

We'll just decide what's best for us.

What sort of budget have you got to do the work here if you go with the two-bed flat?

Optimistically, we were coming out around £15,000.

£15,000 to do the work.

'They're giving their team three months

'to turn the place back into a two-bed.

'During that period, they'll look into their options for buying the freehold to the loft

'and creating more space up there.

'But these busy boys are in no real hurry to get this one finished

'as they have other property irons in the fire.'

How many projects have you got ticking over at the moment?

Probably got seven or eight projects currently running.

-So you are really busy.

-Yes.

-Yes.

-You're flat out.

Sounds like you might need to take somebody else on to do a bit of viewing for you!

-What do you think?

-Yep!

-Good idea?

-Yeah, great idea!

Guys, congratulations. It's been great talking to you today.

-Quite an exciting project. Well done.

-Thank you.

-Cheers.

That is a bit of a big shock.

Thinking you've bought a house and you end up with a ropey three-bed flat!

Their plans are better thought out, though, I'm glad to say.

Although a four-bed flat may be overkill.

You can find out what they do later in the show.

'Coming up: this property's garden tests my horticultural knowledge.'

Trees and...stuff at the back there.

It's lovely.

'In east London, the transformation of this first floor flat

'has to be seen to be believed.'

It's fresh, it's clean, it's inspiring.

'But first, in Cumbria, Neil's chuffed to bits with his refurbished attic space.'

This room, definitely, is the room of the house.

The Cumbrian town of Cleator Moor sits in spectacular countryside.

This two-bed terraced house on the outskirts had a grandstand view of the Lake District fells.

That was what attracted Neil and his wife, Joyce,

who decided to move a quarter of a mile just to get a peaceful spot

and boy, had they got one here!

However, it wasn't love at first sight for Neil.

When I first came to look at it, the estate agent showed us through

and I didn't get to that door.

I looked through, looked up the stairs and walked back out.

I thought, "There's no potential in this."

I went for a bike ride. Then all of a sudden, I saw the potential.

For some reason, I could see the potential and I could see it finished.

Bit of a back pedal, there.

But Neil was intent on chasing this one down.

He paid £42,000 at auction for the mid-terrace

and planned some serious demolition work with the help of his nephew.

He intended to remove the walls either side of the stairs

to create an open-plan kitchen/diner.

He'd set a budget of £12,000

with an extra £1,000 contingency.

He hoped to get the work completed in about three months.

Seven months after our first visit,

we're back to see how the mid-terrace is looking now.

Wow! What a transformation!

Opening up the downstairs has worked really well here.

This room now is our new kitchen.

It used to be the old parlour.

We took the kitchen from the old utility area

and we brought it into here.

We took this wall out. This was basically a chimney breast.

We took that out and decided to build, with the bricks that were left,

a brick feature

We've put nice drop lights in

we've coved it and fully centrally heated.

The original back door of the extension has been blocked up

and new French doors installed.

The stairs needed a 90-degree turn to provide head height

and two steel joists now support the ceiling where the walls were removed.

There were also layout changes in the bathroom.

In the corner there was basically a big large cupboard,

an airing cupboard. We pulled that out,

made it a lot more spacious

which enabled us to put a 1400mm walk-in shower

and a free-standing bath.

What a lovely room.

Neil's really got the styling spot-on here.

In the front bedroom, the colour choice is perfect.

And just take a look at bedroom two up in the attic.

This is the room that took the most time.

We decided to put a dormer window in.

To be able to do that, we had to put two steels in.

These both held the weight of the dormer.

This here, we chipped all the original plaster off

and exposed the original brickwork.

We repointed it.

And then we're left with that feature there.

This room, definitely, is the room of the house.

Adding the dormer was a great move.

Even on a winter's day, what a view of those fells!

With this vista at the bottom of his garden,

I can see why Neil's gone for the no-grass low-maintenance option.

The house has new pebble dash, tiles on the roof

and stone surrounds on the windows.

Neil works full-time as a printer

and employed his nephew, who owns a building company, to manage the project,

although Neil's been on site three or four times a week.

It's been a big refurbishment.

All the interior doors have been replaced and a new combi boiler's been installed.

Neil had a very long list of works for his rather tight budget.

So how did that work out?

I originally said 12 to £13,000.

But with the dormer window, that wasn't in the budget,

the French windows to the back added to the budget.

12 to 13,000 soon turned into something like 19.

With the £42,000 Neil paid at auction,

that takes his total investment to 61,000.

There's still work to do.

Some tiles to go up in the kitchen and balustrades to add to the stairs

then the house will be ready to move into.

We invited two local estate agents

to the refurbished house

to hear what impression it makes on them.

The actual finish is quite contemporary.

The colours are neutral.

But downstairs particularly with the woodburner and the country kitchen,

it does retain that cottage feel.

It really does suit the market,

particularly for the location, the cottagey feel is really nice.

I really like the kitchen in particular,

and the bathroom is lovely. Really immaculate.

The changes to the attic have made a massive difference to that room.

But most importantly, it's opened up the views to the Ennerdale Fells.

Neil and his wife Joyce are about to move in and make it their home.

But how much rental income could the property generate

if they had been looking to let?

In the current market, I could get £375 per calendar month.

I would rent this for 400 to £425 per calendar month.

Those valuations would give a yield in the region of eight per cent.

Very acceptable, really.

But unfortunately,

I'm not really interested in the rental business.

Neil has invested £61,000 in this property.

If he was looking to sell,

both estate agents suggested he puts on the market for an initial asking price

of £75,000.

But to be prepared to accept slightly below that.

So a potential profit of £14,000 before tax and expenses.

But it doesn't sound like Neil's planning to move any time soon.

It's going to be my home for quite a long time, I think.

Unless another project comes up which lures me away from it.

But at the moment, the sight of the Cumbrian Fells,

I'm quite happy here. I'm quite happy here for the moment.

I'm on the edge of the Peak District

in the village of Ambergate.

It's about a mile from Belper where the River Amber meets the River Derwent.

The property I'm here to see is just in a little estate over there.

But before you even get there, there's this lovely kids' park.

It's all looking good so far.

I've come to this lovely elevated spot above some stunning Derbyshire countryside

to see a property that sold under the hammer.

It was a three-bedroomed semi-detached

with a guide price of £69,000 plus, and it's just here.

The garden needs a bit of a tidy up

but the house looks pretty well cared for.

So, what do you get for your money?

A little entrance area here.

Stairs up to your bedrooms

and then through into the lounge.

First thing to notice is it's in quite nice condition.

The carpet's reasonably good, the walls have been painted recently.

It's got double glazing although it is quite old.

No central heating by the look of it.

They're storage or electric radiators so not ideal.

You'd have to factor in the cost of putting in central heating.

But in terms of layout, through the lounge into the kitchen.

This is a bit of a disappointment.

For a start, you've got this protrusion here

which is taking away a lot of space, so that's not ideal.

And then the kitchen units. They're serviceable, I suppose,

but I'm more concerned about the layout.

It just... It isn't working.

There's something not quite right about accessing your kitchen off the sitting room.

It's not ideal when you've got armfuls of shopping bags.

But I think there is a solution in the front hall.

I reckon that isn't a proper wall.

That's been put in at some stage after the house was built.

It's blocked off what the natural corridor would be into the kitchen.

Take that out, and suddenly you've got a much better feel for this property.

Change the layout,

and the flow of this house that went to auction guided at £69,000 plus,

would only be improved.

I wonder if upstairs has any issues?

So, up here, any nasties to discover?

Probably not, but you never know.

Got the bathroom at the top of the stairs.

It's a bit old-fashioned!

A white suite in there would make a big difference.

But that's something to consider anyway.

A box room there.

Another sort of slightly small bedroom there which isn't ideal,

but it's compensated for by the fact that the front bedroom, the master bedroom,

is a really nice size.

Nice window with views out over the hills and stuff there.

And possibly enough space to put in an en-suite. I don't know if you'd bother.

All in all, what you've got is just a really straightforward nice family house.

But there is still room for improvement.

The second bedroom is a small double.

You could move the wall between it and the master bedroom

which is plenty big enough.

But whatever you do, the views from up here to the front

and the back are just fantastic.

A really nice bit of news.

A good garden. It's quite hilly

but it's just lovely.

It's got great character, this little bit here.

You've got this rockery bit and brilliantly, trees and stuff at the back there.

It's lovely.

To learn a little bit about the local property market,

we invited an estate agent to come and have a look around.

The property itself is one of those very solid ex-local authority houses.

It's had some basic modernisation. It's quite presentable.

But it does need a bit of TLC to make it just right for moving in.

It's ticking boxes, then.

After a refurbishment,

how much could it be worth on the open market?

When renovated, this property could achieve £110,000

maybe a little bit more in really good order.

What effect would a good refurbishment have

on the potential rental income here?

The rental market for this type of property is very strong.

There's very little rental accommodation available in this area so it would let almost overnight.

I would think around £525 per calendar month.

What is there not to like about this property?

It needs a bit of work to modernise it, but I think it's a real auction find.

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

Lot number 16.

An improved three-bedroomed semi-detached house

in a cul-de-sac location.

A proxy bid in on this property.

I'll start the bidding at £70,000 on a proxy bid.

71 at the back. 72 with me.

72. 73? 73. 74.

75 somewhere else?

Commission bid at 74. 75.

76.

77. 78.

78. Commission bid at 78,000.

79.

80,000.

81?

£80,000. The bid's with me. It's in the market.

80,000 for the first time.

80 and a half. 81 with me.

81,500, sir? 81,500.

The proxy's out. 81,500. The bid's in the room.

At 81,500. 82, quickly, somewhere else?

At £81,500 once.

Twice. Third time.

Sold at 81,500. Thank you.

That successful final bid of 81,500

was made by Paul, a full-time developer.

Apart from this house, he owns ten other properties plus his own home.

I met him back at his latest purchase

to hear about his plans.

-Paul, pleased to meet you.

-Pleased to meet you, Martin, I really am.

-Congratulations on this place.

-Thank you.

-Tell me why you wanted to buy it.

It ticks all the boxes.

It's where I want to be at the moment.

I think that it's a house in a place that's family orientated.

I think, yes, it needs things to do. It's tired.

But I think I can do it justice and I think I can do something with it

and turn it round and make a rough diamond into a shiny diamond.

Well done. Is this something you do, or have done before?

Yes, I've been doing this for 12 years.

I started off looking after my parents' properties.

Learnt the business.

Still look after my parents' properties.

And wanted to do my own thing.

So with that, I bought a few properties myself

and carried on and carried on

and built up to where I am now.

Right. Obviously the last 12 years have been an interesting period in the property world!

-Yes.

-Have you sort of ridden the rollercoaster?

You have to do your research.

You have to have the right team of people around you.

But there are bargains out there to be got.

If you've got a passion for what you do,

you'll find them and you'll make something out of it.

-You obviously have the passion.

-Oh, I love it.

I love it. People say I'm a workaholic.

"Haven't you got time to do anything else, Paul?"

But I think you've got to do that to be successful.

You've got to live it, you've got to want it and you've got to love it.

Brilliant. Let's talk about this house. Why this particular one?

I've been looking for a while. I'm on one at the moment, which is when you tend to look for the next one.

This was one I was interested in.

I felt that it would be a nice family home and that's why I bought it.

Tell me what you're going to do to it.

The usual things. I see central heating, I see double glazing.

I see kitchen, I see bathroom.

I don't particularly like the flow of the property as you walk in.

I feel we need to open up in the hallway

and make the passageway through into the kitchen.

Behind the wall of the lounge there's outhouses.

-So I hope to break into there.

-Oh.

One, to give a bit of light and bring the garden into the lounge.

And also a bit more room.

-And also take a corner off to add to the kitchen.

-Right.

-You know?

-Sounds like a great plan.

Paul is certainly taking this rough diamond in hand.

I really think the changes he's planning for downstairs sound great.

He's had a think about the first floor

and is opting to refurbish that totally

but will keep the existing layout.

So what does he intend to do with the renovated property?

My A plan is to sell it.

And my B plan, if the market isn't right,

then to rent it and re-borrow on it and carry on in the same vein.

What's the budget for sorting it out?

15,000. There is a contingency for more.

You get a feeling when you go round and you've done a few properties,

if a couple of rooms need replastering, you know how much because you've had it done before.

So when you go to auction, you're always totting these figures up.

Which helps to give you a guide of how far to go with it.

I would have gone up to 85.

But I got it for 81,500. There is £1,000 I have to pay towards costs as well.

But I did look at the legal pack so I knew that.

-One rule I did break, I didn't come into the house.

-Ahh!

I know. But I did look through the windows

and went next door to see the house next door and talk to the people about the area.

Paul's a big Homes Under The Hammer fan,

so well knows it's one of our golden rules

to view a property inside.

But in this case at least he did do some other sensible research

and, of course, he does have 12 years' experience under his belt.

So what's the timescale for sorting this one out?

I'm going to say four to five months and you'll probably say that's a bit of a time,

but I'm saying that because we're on a property already.

So we'll finish that which is a month or just over a month to do

and then we'll be on here.

If it all goes to plan you'll make a reasonable profit

-and move on to the next one.

-Yeah.

I love what I do anyway. With houses, unless you really make a lot of mistakes,

you'll do OK.

It might not be straightaway, it might be a few years down the line,

but generally, you should do OK.

Will it be you doing most of the work, or at least overseeing it?

I'll source all the things I want.

I've got a team of people that work with me

and basically know how I like things to be done. And go from there.

Congratulations. Good to meet you.

-I look forward to seeing how you get on.

-Thank you, Martin.

Really glad to see you. OK. Thank you.

Well, Paul giving an almost textbook account of how to be a proper property developer.

I don't think he'll have any issues with this one.

The only thing will be will he manage to sell it in these still quite tough market conditions.

Find out how he gets on later in the show.

There's been plenty of time for our buyers to have started work on their properties.

But have they been beset by disasters?

Who knows? Time is money, so have they made it or lost it?

Let's go back and find out what's been happening.

Back now to Canning Town, east London

and this three-bed flat with a very peculiar layout.

Property developer Jason had bought it at auction for 158,000

but it soon became clear that Jason and his business partners Adam, on the left here,

and Trevor, on the right, were not all on the same page!

I had it in my mind I was buying a three-bed house

and it turned out to be a three-bed flat!

So I phoned him up. It was quite funny at the time.

That's not something to laugh at! There's quite a difference in price.

Three-bed house or three-bed flat?

-You must have thought you had a bargain.

-Yes!

-But a flat...

-Yeah.

The boys had designs on the loft space

but first they were planning to spend 15,000 and three months converting the flat back

to a two-bed.

Three and a half months later, it's time to check up on the Canning Town flat.

MUSIC: Can You Feel The Love by Elton John

Yes, I think we're all feeling the love here.

The flat is transformed and the new layout works so much better than before.

Over to you, Adam.

Here in the kitchen it was actually two bedrooms.

We had a partition wall that ran across the middle, with a doorway.

That all needed to come out to create this living area

along with the kitchen space.

When we took the partition down, the ceiling came down

so we had to re-board it.

We had to move the boiler from the kitchen, which is now the bathroom, into here.

And we've had to put a vent through to the exterior wall.

To create this open living space.

The changes at the back of the flat,

moving the bathroom to where the tiny kitchen was,

and enlarging the second bedroom

mean the flat now has a layout which actually makes sense.

Yeah, the layout is fine.

It works in a nice way. It flows.

It's contemporary, it's fresh, it's clean. It's inspiring.

It's very bright so it works well.

Nice one, Trevor. And boy, am I glad to see they've sorted out the damp problem.

It was toe-curlingly bad on my first visit.

The main problem with the damp was in the hall area.

We had a bit of ingress down by the front door.

We injected by the front in the hallway

and up in these bedrooms cos it was quite bad and smelly in here as well.

Once we took back the plaster and had it all inspected,

it turns out it was just real serious condensation.

So we lit the boiler. Once it was up and running,

for a good couple of days to dry out the place,

replastered and it's all absolutely fine now.

What about their plans to go up into the loft

and create two more bedrooms and an en-suite?

A planning application's going in to put an extra floor above this one here to create more space.

We've got designs, we've done the drawings and the layout and it looks fantastic.

The boys are not yet sure if they'll sell the flat on

or keep it and rent it out.

As and when they get permission to go up into the loft,

they'll make a call as to whether they do the work

or maybe sell on with that planning permission in place.

They've pretty much kept to their three month timescale.

But what about their rather optimistic 15 grand budget?

It was 19 to £20,000 but we did keep it reasonable

despite the fact that we've got what appear to be high-end fixtures and fittings.

So we've done quite well

but lost a bit of hair over it, as you can see!

But no, it's all gone well.

A £20,000 spend would bring the total outlay here

to 178,000.

We asked two local estate agents for their thoughts on this renovation.

It looks really nice. They've done a really nice job.

They've done it aesthetically with the age of the building.

It works really well and there's certainly a market for this type of conversion.

It's definitely going to appeal to a first-time buyer.

Someone getting on to the property ladder for the first time.

Or maybe even an investor in this area

because you'll get a very good rental return for a two-bed here.

So if the boys do go down that rental route,

what kind of income do the experts think this refurbished flat might achieve?

We would expect it to achieve £1,300 per calendar month.

I would expect to achieve somewhere around 1,300 to £1,500.

Those rental valuations would mean a yield of between 10 and 11.5 per cent

which is not bad at all.

What about selling the place on?

I would expect the property to achieve somewhere in the region of 250,000, at the stamp duty level.

We'd probably market it slightly over, just to see what the market says.

We would expect it to achieve anything between £250,000 to £260,000.

-Hmm. That's not bad.

-Yeah. I'm all right with that.

250 to 260 is fantastic.

-Yep.

-Especially for a property we hadn't even seen!

-So it's happy days.

-We've done all right there.

A profit before tax and expenses of between 72 and 82,000

really is very happy days!

But will they let their business partner buy blind for them next time?

No, certainly not.

But again, the price was enough that we could take a risk.

Anything higher than what this was, no we wouldn't do it.

Back now to Ambergate on the edge of the Derbyshire Peak District.

Full-time property developer Paul

had bought this three-bedroomed semi in an elevated position

with wonderful open views for £81,500.

He currently owns ten other properties that he lets out.

The dated decor in this place needed updating

and Paul planned some structural changes to the downstairs layout.

I don't particularly like the flow of the property as you walk in.

I feel we need to open up in the hallway

and make the passageway through into the kitchen.

Behind the wall of the lounge there are outhouses.

So I hope to break into there,

one to give a bit of light into the lounge

and also take a bit of a corner off to add to the kitchen.

Paul had set a budget of £15,000 with a contingency fund and allowed four to five months for the work

as he had another property to finish first.

Well, it's now seven months later

and back in Ambergate, he's keen to show off the finished results.

And the wait's been well worth it.

The hall now does lead through to the kitchen.

And the former coal stores have gone,

replaced with French doors which gives valuable extra space in the living room.

There's new double glazing throughout

plus central heating, and a new combi-boiler in the kitchen.

Quite a bit's changed in here because I felt it was a bit small

but you can't do too much about doing extensions.

So I decided to open the kitchen up by reinstating the door

but doing that meant that I took all the units away.

What I decided to do then

was to take the pantry out

just so you could get like a nice turn round

and use the pantry space.

So we had to put the RSJ in.

I wondered then where to put the cooker

so I decided to take a corner out of the outbuildings

from where the lounge is,

put the cooker in there in its own personal space,

and I'm happy with how it's gone.

Utilising the space from the former coal stores has made such a difference.

Obviously this is the lounge.

What we had here was a wall going straight across

which we knocked out and brought through with the French doors at the end.

Beyond the French doors we had a retaining wall

which was about two foot away from where the French doors are now.

So I felt that we had to go back with that and make a patio area

cos if you didn't, you'd have a walk out with nowhere to go, really.

So we excavated out there and we did that.

And I think it's made a nice lovely room.

Upstairs, the layout of the three bedrooms hasn't changed.

Just the decor.

Including this floral feature wall in the main bedroom,

er, which makes quite a bold statement!

But the peach bathroom suite has gone.

Bad weather delayed the completion on Paul's other property,

so work on this house did take five months.

Good going considering what his builders had to do outside

to make the most of the elevated position.

When I first came to view the property,

I noticed it was a very sunny area

with nice views.

So I thought this would be spot on for a decking area

which obviously we've made it into.

Paul had budgeted £15,000 for the refurbishment, with a contingency.

Did he need that extra money?

Yes, 15,000, I said.

It has took five more. It has been 20,000.

But I feel I've got value for my money.

With the 81,500 he paid at auction,

plus the £1,000 in costs mentioned in the legal pack,

that takes his total investment here

to £102,500.

We invited two local estate agents to view the property.

What does the agent who saw it originally think of the finish

that Paul's achieved here?

I think taking the outbuildings down was a good move.

It's made the property a bit bigger and also brighter.

I like the property. I think the location is absolutely superb.

It's been presented very nicely.

Tastefully. And all in all, a very good property. Very saleable.

I thin there are certain aspects to the decor.

Particularly the floral patterns

that might marginalise some people.

But the overall look is very homely and feels warm.

Paul is looking to sell, but there is a healthy rental demand locally.

If we put this property within our rental portfolio,

I would say around the £550 a month mark.

There's very little rental property available in this location.

The property would let almost overnight.

I would expect it to achieve around £550 per calendar month.

A potential yield of over six per cent, then.

But what about the resale value?

Is the house worth more than the £102,500 Paul has invested?

I think a realistic asking price for this property on the open market

would be £109,950.

I'd put this on the market at 125,000,

with a view to receive offers around the 120,000 area.

That valuation range from a shade under 110 to the stamp duty threshold of 125,000

would produce a gross profit of between 7,500 and £22,500

before tax and expenses.

Well, we're round about the sort of region I thought.

Obviously the stamp duty threshold is 125.

If I can get it for round about that sort of figure,

what I've paid for it to the return, I've got to be happy at that.

Paul's love for property developing is infectious.

And after 12 years, he's rather good at it.

Daft question, I expect, but what's next for Paul?

Onwards and upwards, really.

I like the challenge.

As you can see, I have a passion for the job.

It's what I do. It's what I love

and it's what I want to carry on doing.

That's it for now. We'll have more auction stories for you next time

to inspire or possibly scare you away!

-Yes, on Homes Under The Hammer. See you then.

-Goodbye!

-Goodbye!

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