Episode 13 Homes Under the Hammer

The auction property market is worth billions every year.

-Don't be put off by that.

-No. Auctions are accessible to everyone.

They're a level playing field.

All you need are finances, bags of confidence... Oh, and some know-how.

With many thousands of lots going under the hammer each year,

there's plenty of choice at most auctions.

Here's what the bidders on today's show decided to buy when they put their hands up.

'In Derby, if it's a pretty compact,

'purpose-built historic building you're after...'

How about this?

'These ivy-clad cottages in Faversham, Kent,

'make me think big!'

You need a big skip and a big imagination.

'And in County Durham, this two-bed flat looks extremely good.

'Maybe too good.'

Is there a catch?

'All these properties have been sold and we'll find out who bought them

'and what they paid for them when they went under the hammer.'

'I'm in the east Midlands, visiting the suburbs

'northwest of Derby city centre.'

It's in the Kingway or Mackworth area of Derby that we find today's property.

Really popular residential spot, this.

Good local schools, facilities, the A38 quite close by

and Derby city centre only three miles away.

This is the property that I'm here to see.

It's a three-bedroom semi-detached. Had a guide price of £72,000 plus.

Looks good from the outside. Let's go explore.

'I do love the fact the house has its own drive

'and plenty of outside storage.

'But will I love the inside?'

Fairly dated double glazed door.

Do you remember when double glazing used to be aluminium colour

before they started painting it white?

Maybe we have to factor in replacing windows into the renovation.

In terms of layout, it's a fairly standard start.

Stairs up to your bedrooms. A reasonable sized entrance foyer.

Small kitchen, so straightaway I'm thinking money to be spent there.

It would improve, big time, the feel of the property

if that was either extended or at least enhanced.

But one room that's really pleasant is this one.

It's dual aspect - front and back.

A living room/dining room that's been knocked into one.

A lot of people did this in the '60s and it works.

It gives a nice open feel to this place.

You've got a fireplace in each side. Again, that's a classic of its era!

It might not be to everyone's taste and possibly something to replace.

The other thing I would think about is double doors into the garden.

All in all, it looks to be in reasonable condition.

I've not seen anything so far that scares me!

# Please don't be scared... #

'The only thing I'm scared of upstairs

'is the amount of decoration needed.

'But there are two good-sized bedrooms and a third smaller one,

'although it's not much bigger than a box room.

'At least it does have a window.

'There's also a shower room up here which needs a brand new suite.

'Even with careful planning, I'm not sure you'd get a bath in here,

'which isn't great if you've got a family,

'but there is scope for development.'

So, at the rear of the property, very decent sized garden.

More importantly, what I see out here is potential for an extension.

At the moment, you've got this ropey lean-to.

Why not do something similar to what neighbouring properties have done -

a single-storey extension?

The good news is, if you did that to within permitted development rules,

as in not too big, you could do that without planning permission.

You still need building regulations.

It would increase the size both of the lounge and the kitchen

and the amount of money it would cost, I think you'd get back in value added to the property.

'Lucy and I recommend you get advice from local planning departments

'before you start a project.

'Councils interpret regulations slightly differently,

'so do check it out, otherwise there could be problems later.

'And it's always best to take heed of a warning.'

AIR RAID WARNING

-How about this?

-CHUCKLES

In the rear garden, an old Anderson shelter.

It's a reminder of Derby's heavy industrial past.

That attracted bombing raids during the Second World War.

These shelters were given to households around the country

to provide some sort of protection against enemy bombs.

You don't often see them these days.

What you'd want to do with it, I'm not sure.

It'll probably end up somewhere to store your lawnmower.

Would you keep it? I would. I hate getting rid of things that are historically interesting.

# Bomb, bomb, get in your shelter Bomb, bomb, don't helter-skelter...#

'There's something you don't find every day -

'a bit of history in your garden, and another reason why I like this house.

'I think it could have been a decent purchase.

'But what does the auctioneer who sold it make of this solid semi

'guided at £72,000 plus?'

If there are negatives, it's the size of the kitchen we're in now.

A lot of these properties have been extended backwards

to enlarge the kitchen.

If you extend it, you're going to add value and increase its appeal.

It's going to be more user-friendly for the 21st century family needs.

The positives are that you've got a solid mortgageable house

that has potential for added value,

as long as you're careful about what you do.

'Once work has been done, how much could it resell for?'

Once renovated, assuming that you don't extend it, you renovate what's here,

its value is probably capped at £125,000 to £130,000.

If you extend it, you would probably influence its value upwards

by maybe another £15,000, but that probably would be about the ceiling.

'What if the owner were to put it up for rent?'

Renovated, I think it would have a rental value in the region of £500 to £525 a calendar month.

If it was a bit larger on the ground floor, with the extension,

you'd push that up by another £50, so maybe 550 to 575 a month.

Well, it's a good solid house in a desirable area.

There's things you'd want to do,

such as the classics of the kitchen and bathroom

and maybe building that extension.

But get it right, this could make someone quite a bit of money.

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

70,000? 70. Thank you. Opening bid at £70,000 on my right-hand side.

At 70,000. 71 someone else?

71, I've got. 71 and a half. I like your enthusiasm(!)

72? 72. And a half?

72 and a half. 73.

73,500. 74.

74,500.

75,000.

75,500. I'll come to you in a minute. 76.

76,500. 77.

77,500. 78.

78,500. 79.

79,500. 80,000...

'Well, this turned out to be a hot lot.

'We rejoin the bidding £10,000 later with the bids at 90,000.'

90,000, fresh bidder.

90. 500.

500. 91.

91,500? 91,500.

92? 92.

92,500? 93?

93,500?

93,500. 94?

94. One more might get it. 94.

No. 94,000, seated bid.

All done once, twice, third chance?

Sold at 94,000. Thank you.

'There was a lot of interest in that property,

'but it was father-and-son team Graham and Marcus

'who finally snapped it up for 94,000.

'I met up with Dad, Graham, at the property.

'He's a self-employed builder.

'His son Marcus is a professional footballer.'

-# Can I kick it?

-Yes, you can

-# Yes, you can

-Can I kick it...? #

'They've already kick-started a career in property development

'and this is their second project together.'

Graham, great to meet you.

Congratulations. Tell me why you wanted to buy this house.

Just to get into the property development business

-and hopefully make plenty of money.

-That's fair enough. So, why now?

It's a lot more to do with my son. He's a footballer and wanted something after his football career.

He said how did I feel about setting a business up with him, a building business?

He knew it was something I'd wanted to do, but financially not been able to do it.

So we took the bull by the horns and went for it.

'Being a builder is definitely going to help Graham on this project.

'How much help will his footballing son be?'

-How's it going to work? Is he going to be hammering nails in and demolishing walls?

-Not yet.

Maybe when his career's finished, but hopefully he's made enough money

where I can still do it and he puts his feet up.

-Cos he's got to look after himself. He can't go falling off...

-No.

He doesn't do it at the moment. He just finances it.

That's good. So why this house, then?

-The first one we did was about a two-minute walk from here.

-Oh!

It was a three-bed property, like this, but it had a flat roof.

We did that to quite a good spec.

-We finished it, put it on the market and within four days, it sold.

-Wow!

We wanted this one because that one did so well.

-Tell me what you're going to do to this place.

-New central heating.

Rewire. Complete replaster. Um...

Build the extension at the rear.

New bathroom, new kitchen. Like I say, just new everything, really.

-Tell me about the extension.

-It's a single-storey in this area,

for the dining room, and going to make the kitchen twice the size.

-Mm.

-And, obviously, the bathroom will be twice the size.

Not a good selling point being so small.

'I reckon they've grasped the real issue with this house

'and have the right strategy to make the property a winner.

'Graham's budgeted around £20,000 for the work

'and has based that on experience of their last development spend.

'How long had he set aside to complete the job here?'

Hopefully, three to four months, if I can stay on the project every day.

Obviously, with the other side of the building firm,

if more work comes in for other clients, I can't turn it down.

Cos that's my living, at the end of the day.

-Fantastic. Well, congratulations! Good luck with it.

-Thank you.

-Look forward to seeing how you get on.

-Good!

So, Graham and Marcus hoping to repeat the success

of their last venture with this property.

I think they're going about it in absolutely the right way.

These are tough times when it comes to selling houses

and people still look for a good quality bathroom and kitchen.

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

'Faversham in Kent was the ancient capital of the county

'and a place where business appeared to be booming.'

Faversham may seem like just another pretty historic market town,

but from 1874 to 1919,

this was the centre of the UK's explosive industry.

There were once six factories here producing gunpowder.

Let's hope the property I'm here to see isn't too much of a blast from the past.

'Most of the factories may have gone up in smoke,

'and the property market isn't booming as much as it was, either.

'But with improved rail links into London,

'Faversham is an increasingly popular place to live.

'Today's auction lot is a quarter of a mile from the town centre.'

I'm on this busy main road to see not one, but two properties

which were sold as one single lot at auction.

Here they are!

Hm, two adjoining cottages and they look like they're in a sorry state.

With these twin properties, it could be less a case of double the joy

and more a case of double the trouble.

I'm going to attempt to go inside.

Eenie, meenie, minie, moe... I'm going in this one.

# Double trouble, I've got

# Double trouble, I've got

# Double trouble

# Twice as much as anybody else Oh, yeah! #

'They're guided at 120,000 to 130,000.

'These two properties in one lot have two neighbours -

'the council depot to one side and an ambulance station to the other.

'Judging by the exterior, this place might need some emergency care of its own.'

Whoa! You certainly need a sense of humour with THIS property.

Can you imagine what the cottage next door is like?

I didn't actually expect it to be quite as bad inside.

You've got floorboards that are lifted. Polystyrene tiles down.

It's old. It's derelict.

-SNIFFS

-Smells of damp.

Hm, you do need those rose-tinted glasses with this property.

But saying that, you've got a nice house here.

You could really work with it.

You could spend a lot of time and energy putting it back together.

Let's have a look at the kitchen.

Oh, dear. Yes. You've got to think about the budget.

You need a big skip - and a big imagination.

# Imagination

# Could make me love you, too

# Imagination

# It's all I want from you #

'Oh, yes, this is one of those where you have to think what it could be

'rather than what it is at present.

'Could the downstairs bathroom go upstairs? Well, maybe.

'The two bedrooms are a reasonable size,

'and there's the bonus of a box room off one of the bedrooms.

'Maybe that could be a third bedroom or even the bathroom.

'You'll have to make the inside work because the small outside space

'with its tiny garden and absence of any parking

'certainly stumps any scope for growth.

'Shame the same can't be said for the plant life on the other half of this lot.'

The most obvious difference between these two houses

is that one is shyly hiding under a veil of ivy.

Many people blame ivy for causing damage to buildings,

but recent studies suggest that if the walls and the mortar are sound,

the clinging area of roots of ivy actually do little damage.

Unfortunately, if the exterior walls are in bad condition,

the roots can get into cracks and cause structural problems.

It is easy to remove. All you have to do is pull the stems off.

But these little root ends get left behind.

You can scrub them off with a wire brush or a pressure washer.

# You really got a hold on me

# You really got a hold on me... #

Well, I can't exactly say this lot is growing on me.

Perhaps the inside will give me more encouragement.

I'm trying not to laugh because I can't get in the front door!

Hello.

LAUGHS

Cottage number two...

A whole lot worse.

'Its layout may be a mirror image of next door,

'but it's in an even worse state, with holes in the ceiling

'and no floorboards in some rooms.

'So, if next door needed some imagination, this needs double.

'For all the problems, I still think this might be a decent investment.

'Sometimes double the trouble can be a way to double your return.

'What does a local estate agent make of this pitiful pair?'

What might be useful is to try and separate the bedroom upstairs

and maybe bring the bathroom upstairs.

Most people like a bathroom on the upper floor.

Negative factors with this property could be the working depot next door

and also we are on a main road.

However, we are in walking distance to the train station in Faversham, which will serve London.

'If someone did roll up their sleeves, hire a giant skip

'and completely refurbish the houses from top to bottom,

'what kind of price might they achieve on the resale market?'

The residential valuation as a two-bedroom property with a bathroom upstairs, with the changes made,

we'd be looking at £135,000.

If we were to leave this as a two-bedroom with a ground floor bathroom, around £125,000.

'And on the rental market?'

If we're looking at this as a two-bed, the rental valuation would be £650 per month.

As a three-bedroom house, we'd be getting the same rent because the location might bring it down.

Property in Faversham is always in demand,

but the two cottages aren't perhaps in the best location.

They also need some work. There's all that ivy to remove, for a start!

Coupled with the layouts - they're not ideal.

You've got the bathrooms downstairs.

So, who was ready to take on this twosome?

Let's find out who bought them at the auction.

Lot number three. We go to the outskirts of Faversham.

Two cottages there.

Renovation required. 120,000 anywhere?

120 I have, thank you. 122. And 125.

128? 128 I have. And 130? 130.

132? And 32. 135.

138? 138.

And 140? 140. 142?

142. And 144? 144.

146? And six I have.

148? 48 is bid. And 150?

150. 152?

152. 155?

155. 158?

At £158,000. Take 1,000 if it helps.

159.

160. 161?

Well, for the first time, then, at £160,000.

You're out, right. Out at the back.

For the second time at £160,000.

Third and final time at £160,000. Are you all done?

Gentleman's bid here. Sold at 160.

'So, for £160,000, the successful bid for the pair of dilapidated semis in Faversham came from Ben.

'He's in the army and has bought it with his brother, Dan,

'as a part-time renovation project.

'The cottages are properties eight and nine in the partnership's growing portfolio.

'I met Ben along with his brother, Dan, at their latest purchase.'

-Congratulations.

-Thanks.

-You brave buyers, you!

What was it about the cottages that drew you to them and made you want to buy them?

Architecturally, they look good. They're nice buildings.

-Primarily, it was the price.

-Yeah, the price.

Did you have much time, Ben, to get in and have a good look around?

No, the council wouldn't let us in cos they condemned the properties.

They had no access to the properties prior to the auction.

We looked round the outside, had a look through the windows,

assumed worst-case scenario and went from there!

-What did you think when you came inside?

-It was better than what we were expecting.

There's not much damp.

Apart from a few missing floorboards, it's generally OK.

There's also the fact there's three bedrooms.

We suspected as much from the outside,

but it was in the catalogue as two two-bedroom places.

-We have very low expectations, which helps.

-That always helps!

-Always think the worst and anything else is a bonus!

-Absolutely.

'It seems Ben's army background has prepared him to take on anything.

'But with brother Dan working in online advertising,

'they're busy people, so a major project like this will stretch them,

'both in time and money.'

-How have you managed to finance this, guys?

-It's not been easy.

We don't have tons of money sitting aside to pay for it.

We had to put as much money in as we could and get a bridging loan.

-That's...

-Ugh!

-Yes, quite expensive.

-That's VERY expensive.

-Can be.

-Motivates you to get the place done quickly.

As soon as we've done the places up we'll remortgage them and pay off the bridging loan as soon as we can.

So the pressure is on, financially. You've got to get in this house, do it up and get out.

-Where are you going to start, Ben?

-We'll start on this one.

That one's different, I suppose. The exterior's a bit worse.

So we'll get in this one, sort it out, rent it, remortgage and then that's us, bridging loan paid off.

-What about cottage number two?

-Another three or four months.

Our intention is to long-term rent both of them.

The quicker we get tenants in the better.

'So the race is on to get at least one of these

'up and running for the rental market.

'But there's an awful lot of work to do here.

'Particularly tough when it's not their full-time job.

'How will they set about tackling their terrible twins?'

Let's start with this cottage. What are you going to do in here? Any structural work, Ben?

The plan is, for either of them, no structural work.

It's too expensive for what we'd get back.

It's to leave the layout the same, no building work,

rewire, replumb, replaster.

Completely redecorate and leave, layout wise, as it is.

-And the bathroom's downstairs?

-We'll leave it downstairs.

Let's talk about that cheeky extra bedroom that you've got.

-What are you going to do with it?

-We debated this one.

We could put a corridor in but it makes the large bedroom small.

Our thoughts were, if we were to live here,

we'd use that smaller bedroom as an office or a nursery.

-I think it'll work quite well.

-Or a dressing room.

-Yep.

-It would be a lovely en suite.

-Fantastic.

-We need big dressing rooms, clearly.

-We so do!

-What's the budget for the work?

-10,000 to 12,000 each.

-Each cottage?

-Yeah.

-And what's your time frame?

Maybe two months, probably more like two and a half to three months.

We'll be doing most of the work ourselves.

Just getting a few people in to do a bit of plumbing, bit of electrics.

We've done similar things like this before,

so we have a fairly good plan on how long it will take.

It's a really exciting project.

-I can't wait to see what it's going to look like.

-Thanks very much.

Lovely to meet you both. Dan, Ben, thank you.

Wow! They plan to do a lot of the renovation themselves.

That means juggling full-time jobs with working on site.

Will they really be able to get these sister semis sorted?

I wonder. You can find out how the boys get on later on in the show.

'Coming up, in County Durham,

'there's a flat which appears to be all tickety-boo.'

It's looking great, so far.

'Back in Faversham, Kent, these brothers know their roles.'

-I'll smash some stuff down and he'll...

-Put it back afterwards.

'First, we return to Derby to see if Graham and Marcus have scored with this semi.'

It's a lot better. More room.

'Back to Derby now, where we saw this three-bedroomed house

'sell at auction for 94,000.

'It was bought by professional footballer Marcus with his father, Graham, who's a builder.

'But it didn't sound like Graham was going to get much help with the renovation.'

-How's it going to work? Is he going to be hammering nails in and demolishing walls?

-Not yet.

Maybe when his career is finished.

Hopefully, he's made enough money where I can still do it and he puts his feet up.

'Five months on, while footballer Marcus has been busy on the pitch...

'No. Not that one. ..has Dad Graham been busy in the house?

'And the answer is yes.

'He's gone for a modern minimalist look with a coffee coloured scheme.

'Maybe not black coffee, but certainly a mocha.'

MUSIC: "Black Coffee" by All Saints

'Aside from the cosmetic changes,

'Graham's also installed a new gas central heating system,

'reboarded and plastered all the walls,

'put in double glazing throughout and refloored and recarpeted.

'If you're wondering just how he managed to create this large kitchen

'and turned the minuscule shower room into that luxury bathroom,

'well, here's how.'

Basically, we decided to build the extension on the property

to enlarge the kitchen and the bathroom, cos they were so tiny.

To enlarge the kitchen and bathroom, it's just better selling potential.

MUSIC: "Make It Big" by The Beach Boys

'Whilst he was at it, he's knocked down the wall

'between the dining room and kitchen and created a huge space.

'If that doesn't attract buyers, I don't know what will.'

Obviously, for a family, a tiny room is a bit crowded.

Now, it's a lot better and more room.

'I'm really pleased that Graham went for the extension,

'as it's made a huge difference to the property.

'Although there is one thing that he's got rid of that I was keen on,

'that Anderson bomb shelter.

'Blast!'

I'm afraid it had to go! It was an eyesore!

You wouldn't want it in the middle of your garden, so it went.

'Eyesore? We'll have to disagree on that one.

'It's all looking very high-spec,

'so what has that done for the £20,000 budget?'

I think we've gone over budget by probably about £6,000.

The reason being I used the figures from the last house we did.

Those figures didn't include the groundworks, the footings, drainage

cos it was already there. I only built on top.

I didn't take that into account.

When we did it, that's what took the build over budget by about £6,000.

Hopefully, we can recoup that further down the line.

# Build your love on a strong foundation

# And happiness will follow you... #

'Going £6,000 over budget will take Graham and Marcus's total investment to 120,000.

'What will two local property experts make of it?

'First up, the auctioneer who sold it on the day.'

'You come into a house that you've seen before'

and you look at the transformation and sometimes you think,

"Yeah, it's OK." Other times, you think, "Wow!"

The specification of what's here now would appear to be good.

I don't think it's a cheap job. On the other hand, not ultra-expensive.

But I think it's good quality and generally - decor, windows,

heating, boiler, carpets - it's all good.

Overall impression of the property? The bathroom gave me the "wow".

The kitchen gave me the "gosh". Lovely. Really nice.

The extension's really made the property.

It's made the kitchen great. It's added to the size of the lounge.

So you've got a really good sized kitchen and lounge.

Then a little extra is a big bathroom with a four-piece suite.

'So the extension's getting the thumbs-up,

'but one thing gets a big thumbs-down!'

I'm sorry that the air-raid shelter's gone.

Not because I live in the past,

but because it's one of those pieces of history

which is becoming increasingly scarce.

I think he could have made a feature out of it

and kept a little bit of history.

'And so to the figures. If Graham and Marcus were to rent this out,

'what do the experts think they could get for it?'

If this property was put up for rent, I would probably advertise it at £650 per calendar month.

It would have a rental value of about £600 a calendar month.

Both figures are very realistic for the quality of this house

and for the area that it's in.

'Their outlay on the work so far has been 26,000.

'So, including the 94,000 paid at auction, that's a total of 120,000.

'How much is it worth now?'

I would ask £145,000 and I would achieve somewhere in the region of £140,000.

I think you'd have an asking price of up to £150,000 on it.

And you'd hope to achieve, I think, probably about £145,000.

I think the first one is low.

The reason being we did a house down the road, 100 metres from here.

It was a flat-roof house. This one's a pitched roof.

This is a better house, better street, and that fetched 145.

So, in my mind, I think we'll go over 145.

The second estimate, I think, is more realistic.

I like the top-end figure better than 145.

I think we'll go with the 145 and I think we'll be quite happy that we will hit that target.

'If it did sell for the higher valuation of 145,000,

'that would give them a profit of £25,000,

'minus the usual taxes and expenses.

'Graham has definitely moved this house into another league.

'Will this father and son continue with their teamwork?'

I think he will get his hands dirty when he's out of football.

When he was a little boy, he'd come to work with me on a Saturday and he used to love it.

'For the time being, Graham is happy to watch his son from the touchline,

'as he succeeds with his football career.'

I'm proud of him, yeah, and hopefully, what we're doing now,

we can both sit back one day and be proud of what we have achieved.

'Chester-le-Street in County Durham

'is seven miles from Newcastle upon Tyne

'and eight miles west of Sunderland.

'Originally, the location of a Roman fort,

'it has long been a stopping off point for weary travellers.

'Perhaps today, I can find a tempting place to stay.'

Just ten minutes from the town centre,

in the quiet residential area of Hilda Park,

is the property I'm here to see, and this is it.

It's a two-bedroom extended ground floor flat.

At a guide price of £44,950, looks pretty good from the outside.

Oh! And for once, it looks like the inside isn't going to disappoint either.

Little bit of a porch area, straight into your living room.

Nice clean walls. Beautifully clean carpet.

It doesn't smell damp. What a joy!

# Don't jump for joy!

# Yeah, man Have you had a baby boy? #

'It might not be decorated to everyone's taste,

'but at least the sitting room is in good nick.

'It's positively immaculate compared to some auction lots I've seen.'

Bathroom. Could do with a bit of updating, but perfectly serviceable.

Likewise this, a bit dated, this glass wall.

Also, I doubt that's safety glass, so you might want to replace that.

It does throw a lot of light into this part, where you've got your two bedrooms.

This is the front one. Decent size.

Lots of built-in cupboards, if that's what you need.

All in all, it's looking great, so far.

'Again, there isn't much wrong with the bedrooms.

'They're centrally heated with decent carpets

'and both rooms are reasonable doubles.

'Yes, you could put your own mark on the place, if you wished,

'and the bathroom perhaps needs a more modern twist,

'but I'm just being picky!'

So, any horrors awaiting us in the kitchen?

Um...

No. It's pretty good!

You look to the kind of detail that's been put in this place,

things like real granite work surfaces, nice sockets.

A little bit dated, but perfectly serviceable units.

The plastic cladding on the ceiling and the walls

might not be to everyone's taste, but it's clean,

you've got the appliances.

Is there a catch?

No.

MUSIC: "Nothing To Do" by The Tourists

'Not only is there nothing to do in the kitchen,

'it's also surprisingly big, as it's actually in an extension.

'That's yet another plus point for this two-bed flat.

'And as if that wasn't enough...'

To the rear of the property, predictably,

a really nice little garden.

There's a shed. You might want to keep that. Maybe not.

You've got a rockery, a little bit of grass.

All it needs is a bit of a mow.

You can't fault this place, can you?

'But it doesn't end there, either,

'as there's also a garage which comes with the flat.

'So, with parking, a garden, two bedrooms,

'a spic-and-span interior and good location,

'it certainly seems this property has a lot going for it.

'The only slight concern is how do you add value to it?

'What does a local estate agent make of what's on offer here?'

It's quite a nice position for the flat.

It's tucked away, head of a cul-de-sac.

The biggest advantage is the extension, which is very rare.

That's improved the kitchen, which is the major selling point.

'They're all plus points,

'but it had a guide price of £44,950.

'So, does it have much investment potential on the resale or rental markets?'

In the current market, the problem is lack of first-time buyers.

They probably should be achieving somewhere in excess of £70,000.

Rental should be in the order of £450 to £500 per calendar month.

'If you're after a quick resale profit, this might not be for you.

'But as a buy-to-let, it might just be perfect.'

There are a few things you could do to modernise this place,

but frankly, I wouldn't bother - it's pretty good as it is.

I think it would rent out like THAT.

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

We go to lot number 66 now.

A two-bedroom ground floor flat, popular estate.

Do I have 50,000 anywhere? Someone's got to start me at 50.

50,000 bid. 52 on the front row.

54? 54 bid.

56 bid. 58? 58 bid.

60 bid. 62.

No? £62,000 is the bid. At 62,000. I'll take one if it'll help. 63?

63 on the telephone.

Yes? 63 on the telephone. 64?

64 bid. I'm here at £64,000... 64 and a half.

65? 65 bid. 65 and a half?

No? I'm selling it once at 65.

I'll take 250. 65,250 bid.

65 and a half? No? 65,250.

It's against you here in the room at 65,250. Anybody else?

I'm selling it once at 65,250.

For the second time at 65,250.

Sold.

'So, for £65,250, more than £20,000 over the guide price,

'the happy new owner of the Chester-le-Street two-bed flat

'is local car salesman Alan.

'He, along with his wife Sarah, who's a nurse,

'and their 21-month-old son Ethan, joined me back at the flat

'to explain why the young couple decided to buy it at their very first auction.'

Alan, Sarah, great to meet you both. Tell me why you wanted to buy it.

Um... Sarah's gran put an offer on it about a year earlier.

-Your gran?

-Yeah. My gran. Yeah.

Anyway, things didn't move on for her,

and then we found out that it was going up for auction.

-Wow! So you've got a history with the place already?

-Yeah.

We had a survey done on the property. Rather, Sarah's gran had, a year earlier.

-So we kind of knew the problems with the property.

-Right.

So, is your gran...? What's going to happen now?

If she can sell her property, then we would rent it or sell it to her.

-OK.

-Quite happy to do that.

That doesn't look to me forthcoming,

so we'll probably plan to rent it privately until she can do that.

When your gran was looking to buy it a year ago, was the price higher or lower than you paid?

-Substantially higher.

-It was higher?

How much was she willing to pay for it?

She was willing to pay 20,000 more than what we paid for it.

-Wow!

-Yeah.

-So a sizeable saving.

'Alan and Sarah have benefited, for sure,

'but it's a reminder of how risky the property business can be.

'This lovely flat has plummeted in a very short time.

'It goes to show that, with property, timing really is a major factor.'

Talk me through what you are going to do with it.

-You could presumably do nothing.

-Yeah, I mean, people...

Our parents have said, "The bathroom's fine. Why would you change it?"

-Or the carpets are fine.

-Hm!

-But Sarah likes...

-Yeah, that was a little argument!

Sarah likes wood floor

and I think it would be easier to maintain between tenants,

which is something we'd thought about but I suppose it could rent as it is quite happily.

It might be worth seeing, because you could rent it out as it is.

I don't know if you'll get any more, in terms of what you'll achieve,

for quite a lot of extra investment.

If you do do work, what will you do?

Living room, just change the flooring, give it a lick of paint.

The bathroom, we think a white suite would look a bit nicer.

Change the tiles. Make it a bit modern, a bit fresher.

The electrics we think needs a bit of attention in terms of rewiring.

Nothing too major and nothing too expensive - we hope!

What budget have you set aside?

I've set a budget of 5,000.

I love the way you said that!

But I'm hoping to come in a lot less.

I want it to be around three, maximum.

Alan wants it to be £500.

-Oh, really?

-Yeah. LAUGHTER

I've got an idea, "Oh, it'll ONLY need this."

Sarah's costed things quite a bit more accurately than me.

Our plan is that the overall property will come in under 70,000 including fees, et cetera.

-Who's going to do the work?

-Um... It's going to be a family affair.

We've roped in parents to both babysit and paint and things like that.

-What's the timescale?

-I think that it'll be done in about a month.

-And then get it tenanted out?

-Yeah.

-Well, congratulations to you both.

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

Sometimes, it's really hard to resist the temptation to do up a property.

In this case, I REALLY think you should just leave well alone.

I sincerely hope that Alan and Sarah take that viewpoint.

In terms of return on their investment,

I don't think they'll get that much more renting it out once it's done up than as it is now.

You can find out what they decide to do, and if Granny moves in, later in the show.

We wait patiently for our purchasers to do the work on their properties

and sometimes they make a wonderful job of it.

And sometimes, Martin, they encounter problem after problem.

What's the story with today's properties?

'There's no doubt that the town of Faversham in Kent

'has some lovely old properties.

'Unfortunately, the auction lot I saw wasn't one of them.

'Sold as a single lot, these two cottages were built in 1905,

'but they were far from lovely.

'With floorboards missing and broken windows,

'they were completely dilapidated throughout.

'You couldn't even easily get into the left-hand property,

'such was the state of the ivy.

'But underneath all this neglect lay two three-bedroom cottages,

'and despite their apparent state, brothers Dan and Ben

'thought this two-for-one offer was too good a deal to pass up.

'They bought the pair at auction for £160,000.'

INAUDIBLE CONVERSATION

Did you have much time, Ben, to have a good look around?

No, the council wouldn't let us in cos they'd condemned the properties.

They had no access prior, so we looked round the outside,

looked through the windows, assumed worst-case scenario and went from there.

What did you think when you came inside?

It was better than what we were expecting. There's not much damp.

Apart from a few missing floorboards, it's generally OK.

We have very low expectations, which helps.

'Low expectations or not, there was no getting around the fact

'that the cottages were going to require an awful lot of work.

'Yet, with Ben in the army and Dan working in online advertising,

'this was to be a part-time project.

'Armed with a total budget of 20,000 to 24,000,

'they planned to tackle the ivy-free cottage first

'to get it on the rental market - hopefully, in two to three months.

'Then they'd start on the second cottage.

'Now, three months later, we're back.

'Well, they seem not just to have revived one of the cottages,

'but both of them look like they're alive and kicking.

'So, a change of plan?'

Within a few weeks of us starting, we found out

Ben had been called off to Germany, so we really had a deadline to meet.

Three months after we bought the houses, both of them had to be done.

'With Ben under orders to move to Germany, the clock was ticking

'to get both their purchases in order.'

So, we put in a lot of hours, a lot of late nights,

but we got them done in the end, so we're pretty pleased.

'They kept the layout the same, there's still a downstairs bathroom,

'but in terms of looks and feel, it's substantially different.

'The three-bed cottage is now centrally heated and double-glazed,

'with new electrics and plumbing

'and as you can see, it's completely refurbished throughout.'

At the moment, three months in, we've completed one cottage.

That's ready to let. There's tenants moving in in two days' time.

The second property's a bit behind. Probably got two weeks' work left.

That's due to be let in a couple of weeks.

'So, there's a little more work to be done in this cottage

'before the tenants can move in.

'Like next door, they sympathetically renovated the cottage,

'retaining as many character features as they could,

'and maximised the space they had at their disposal.

'There was a bonus when Ben discovered the deeds entitled them

'to parking and right of way via the ambulance station next door.

'It was all coming together very nicely, but given the new deadline,

'did they do it all themselves or did they call in reinforcements?'

We did most of the work ourselves with help from our uncle Clifford

for free, which was brilliant.

Also, Dan's girlfriend's dad, Paul, he's done a few days here as well.

So we got help from a number of people.

We've also forgotten the fact we got an electrician to do the rewiring,

-plumbers to do the central heating and plasterers to do the plastering.

-Oh, yeah!

'Despite all the professional help, there was plenty to do.

'With such a short time frame, teamwork was going to be key.'

Generally, we've got on quite well.

We've never really worked this much together.

We've managed to get through it just fine.

Dan does a lot of the technical stuff. He's quite a craftsman.

I'm not! I'll smash stuff down and he'll...

Put it back afterwards!

'I suppose they could have done a cottage each, if they hadn't got on.

'Has doing two at once helped their proposed total budget

'of 20,000 to 24,000 for both cottages?'

We aimed, initially, to spend 10,000 to 12,000 doing up each property.

I think the reality was we spent 12,500 on each.

So, a little bit above, but not too much, really.

We can cope with that overspend.

'I'd say that's pretty good.

'£25,000 to get their two cottages up to scratch.

'With a purchase price of 160,000,

'their total outlay, without costs and fees, will be £185,000.

'So, will Ben and Dan's cottages pass the inspection?

'What do two local estate agents think?'

In a short space of time, the transformation's very good.

They've done the right things by keeping everything very simple.

They've done a very good refurbishment

for the purpose of selling the property or possibly for rental.

They've kept the character, such as the fireplaces, wooden floorboards,

which potential buyers like to see in this age of property.

I like the two reception rooms.

The bay window is very attractive, and the fireplaces,

which are a feature in both reception rooms.

'The brothers have already got tenants lined up,

'but if they put them up for sale,

'would they see any profit on their £185,000 investment?'

Each house, in the current market, I would expect to achieve £145,000.

Should these properties be brought to the market, the resale figure for each property would be £145,000.

That's not bad.

It's roughly what we expected. Maybe a bit higher but, yeah, pleased with that.

'That could be a healthy pre-tax profit of 105,000.

'Not bad for three months' work.

'So how would they fare on the rental market?'

In the current market, these would rent for £675 per calendar month.

If these properties were offered for rent, they would rent for between £650 and £675 per calendar month.

We've already got tenants lined up for both houses at 675 a month.

'£675 per calendar month for each cottage

'would generate a very decent yield of over 8%.

'So, it may have started off as double the trouble,

'but looks like it'll be twice as rewarding.

'With Ben off to Germany, is this the end of their property partnership?'

I think we'll have a break from property investing for the next few months or possibly years.

We have typically done it once a year, so maybe we'll continue, and certainly buying at auction.

With Ben in Germany, I don't want to be doing all the work myself!

-So, we'll see.

-Let's just see what comes up.

'It was in the County Durham town of Chester-le-Street

'that we first came across a two-bed ground floor flat

'that had, well, practically everything going for it.

'It was in a quiet location with a garage and a garden.

'Inside, it was in pretty decent condition

'with the unusual addition of an extension.

'It also had the kitchen space that would put most houses to shame.

'Quite frankly, it could have been let out without lifting a finger.'

MUSIC: "Nothing To Do" by The Tourists

'But for local couple Alan and Sarah

'it wasn't just the condition of the flat that attracted them to it.'

-Sarah's gran put an offer on it about a year earlier.

-Your gran?

My gran, yeah.

Anyway, things didn't move on for her.

Then we found out that it was going up for auction.

-Wow! So you've got a history with the place!

-Yeah.

'They paid £65,250 for it,

'nearly £20,000 less than Sarah's grandmother was going to pay for it a year before.

'Their only dilemma was whether to do anything to it

'or rent it out as it was.

'Nearly seven months later, we return to catch up on the story with Alan.

'There are changes in the lounge, albeit fairly subtle ones.

'There's new paintwork, carpet, curtains,

'but perhaps more importantly, there are signs of a tenant.'

The thing I'm most pleased with is that someone's living here now.

We have a tenant in the property who's made it more of a home.

'And it's that change into a home that's most noticable,

'with Alan and Sarah deciding to leave the bedrooms and kitchen as they were.

'But they have done some work in the bathroom,

'giving it new flooring, a redecorated ceiling

'and just a general makeover.'

My wife's been involved in most of the painting and the work.

She's better at it than I am. I've been a willing labourer.

And I did strip the ceiling in the bathroom and paint that.

That was my main input on this, but my wife's done most of it.

'They've also had the boiler checked and serviced,

'and installed smoke and carbon monoxide detectors.

'Although it's nearly seven months since we've been here,

'the work took a month and a half and the tenant moved in soon after.

'They've done the sensible thing by sprucing it up where necessary,

'without going overboard and overspending.'

In total, with fees, came in around about £2,500 to £3,000.

'It looks like Alan's wife, Sarah, got her wish on the budget.

'She was determined it would be £3,000 max.

'I was worried about Alan overspending,

'so hope the valuation from the two local estate agents

'will at least match their total outlay of £68,250.'

The property's been subject to a reasonable cosmetic renovation.

It's bright and fresh

and ideal for the rental market.

It hasn't needed a great deal of work.

Of particular interest is the kitchen,

which has got modern units and granite worktops,

and it's been extended previously.

The property has gas central heating fired by a combination boiler,

which is unusual cos these were fitted with ducted air heating,

originally, which isn't as desirable as modern boilers.

'Obviously, the flat is tenanted, but if they were to look to sell it,

'how would their £68,250 investment fare on the resale market?'

Should the property come to the market, I would advise a marketing price of £80,000,

with a possible sale value of £75,000.

We would recommend an asking price in the region of £80,000.

We would expect the property to achieve in the region of £75,000 to £80,000.

It seems fair. It's kind of what we expected.

Our intention isn't to sell it. It's a long-term investment for us.

'So, a potential £6,000 to £11,750 pre-tax profit if they sold.

'What about the all-important rental figures?'

The rental market is very buoyant in the area.

I would advise an initial rental value of £475 per calendar month.

We would expect the rental value for the property to be in the region of £475 per calendar month.

That seems fair.

We're obtaining a little less than that, but within the ranges that we looked at.

'Any rental around the £475 per calendar month mark

'will see an annual yield above 7%.

'With a tenant in place, the flat's already earning them an income.

'Has this first tentative dabble in the property market been enough to encourage them to do more?'

We're already looking at other properties through auction and ones on the open market as well.

We're quite keen to do it again if we can find another property that will do us as well as this.

Join us next time, when we'll have more riveting stories from Britain's auction rooms.

-Yes, make sure you join us then. It might be your passport to a small fortune.

-Goodbye.

-See you then.

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