Episode 20 Homes Under the Hammer

Hello. Browsing through auction catalogues can be very tempting.

But it's quite another matter raising your hand to buy something.

You need courage and conviction buying your home under the hammer.

Derelict, decaying, but delightful. You can find all sorts of properties at the auctions.

So let's see what our buyers went for on today's show.

You'll need some very thick pile carpet for this Cardiff flat.

I've got to show you this. Look at that. Absolutely fantastic.

Could this three-bed property in Dover benefit from layout changes?

I'm just wondering whether this reception room is big enough.

And in Middlesbrough let's see what's behind the round window today.

It's the little things that make you fall in love with a property.

All of these properties went to auction and we'll find out who bought them and what they paid

when they went under the hammer.

I'm in Adamsdown, a traditional residential suburb of Cardiff.

Undergoing a lot of regeneration at the moment, which is good news.

And it's only ten minutes' walk from Cardiff city centre.

With its excellent shopping centres, the Millennium stadium

and the impressive Cardiff Castle, the Welsh capital has plenty to offer in amenities

and Adamsdown has, too, with a revamped shopping area hoping to attract new retailers and shoppers.

I'm here to see a one-bedroom flat. At a guide price of 40,000 quid, let's take a look.

'The flat is on the ground floor of what was originally a two-bed terraced house, now sub-divided.'

So your own entrance after the main entrance, which is good.

Bedroom there. It's got some built-in cupboards. Looks to be in reasonable condition.

Your first impression when you walk through the door is it's reasonably well looked after.

Paint's OK. Through into this area here, your main living room.

With a fireplace. I've got to show you this.

Look at that. Absolutely fantastic.

It's a floating fire surround. Every home should have one.

But that's that, then through to the kitchen.

# Float, float on Come on, come on, come on

# Float on... #

'Levitating fixtures and fittings aside, there are no other mysteries about this flat so far.

'Everything seems in good order, so on into the kitchen.'

It's not too bad. It looks like it was reasonably recently refurbished.

A bit of a clean up and you could leave it pretty much as it is.

Then right to the rear where you've got a loo. It's designed as a wet room at the moment.

I think you'd just about squeeze a bath in there. But that's your flat.

# What you get is what you see Ain't nothing more to it

# If you want another woman like me It takes a man to do it... #

'It is what it says on the tin or auction catalogue in this case -

'a one-bed flat in good shape. Yes, the wet room is a disappointment,

'but there's something through that back door to make me smile again.'

The good thing about ground-floor flats is they generally have some kind of outdoor space,

but in the case of this one, it's a real added bonus that it's so big.

It's obviously not been particularly well looked after, but it's a really great space.

One other thing to talk about is the lease. This particular flat has a 75-year lease left to run.

That's long enough to mean that getting hold of mortgage finance shouldn't be too much of an issue,

but there are lots of things you can do to extend the lease.

The shorter it has to run, the more expensive it'll be. Before you buy leasehold property,

you really need to get your solicitor to check those details.

'In simple terms, leasehold ownership just means a long tenancy.

'Under a 1993 Act, you have the right to add 90 years to your lease.

'So in this case, with 75 years remaining on this one, you'd get a new lease for 165 years

'or you could negotiate with your landlord if you both wish,

'so it's worth checking that out. What does a local property expert think of this flat?'

My first impression seeing the apartment is that it's very compact

and it's an opportunity to get on the property ladder. The work would be minimal.

I would concentrate more on cosmetics and improving the presentation,

particularly the wet room.

Structurally and in presentation, it looks in good order.

'So we're agreed it's not in bad condition. Once spruced up, would it be best suited for sale or rental?'

The property is in a zone in high demand for renting because it's so convenient for the city centre.

I think it would rent for £450 per calendar month.

'How do the resale figures sound?'

It would reach in the region of £75,000.

Well, the flat is small, but almost perfectly formed

and, I think, a good rental opportunity or nice place to live.

Let's see who fancied it.

OK, moving on to the next lot. Lot 3 in the catalogue.

A ground-floor flat in a converted house.

Who'll start me off at 40,000?

40,000? 35? 35 to get things moving?

-35. Thank you.

-'This is a first on Homes Under The Hammer as, unfortunately,

'this is a house without a hammer. Due to a technical glitch, we didn't record the hammer going down,

'but it was bought for bang on the guide price of £40,000 by a trio of investors,

'Claire, her partner Steve and their colleague Rob, on the right here.

'Steve was unable to come and tell us about the plans, so I met up with Claire and Rob to find out more.'

-Claire, Rob, great to meet you both. Congratulations.

-Thank you.

-Tell me why you wanted to buy this flat.

-As an investment.

-Yeah.

Basically, Claire's been doing a lot of research and we've looked around and this was the best opportunity.

Great. How did it all start? How did the working relationship begin?

It was kind of a joint decision.

Claire and Steve have done various bits on their own. I wanted to get a hand in. It progressed from there.

# Join with us

# Join with us, join with us... #

'Rob's joining Claire and Steve who already have a small rental portfolio.

'Rob served his apprenticeship under Steve and is now a self-employed electrician.

'They've known each other for years and seems logical to go into business on their first project.'

-So why this flat, then?

-It was a it of an accident. We wanted a freehold property.

The guy from the auctioneers said, "Just have a look at this flat and see what you think."

-We worked out the numbers and realised it was a good buy.

-Why were you so keen on a freehold?

Currently we've got flats in Essex and they're all leasehold.

We're trying to go more freehold to avoid service charges and ground rent.

-So where are you based?

-I'm based in Camberley. Surrey.

-And Claire?

-I'm from Essex.

-So what brought you over to Wales?

Myself and Steve have been coming here for many years with our jobs.

We travel a lot anyway, so we know Wales. It's a nice area.

-So it was a good opportunity.

-What sort of issues will that have, that it's 150 miles away?

-We are going to get a letting agent to manage it. The idea is to buy to let.

-Right.

-and build a portfolio up here.

-So this will be the first of many?

-Hopefully, yes.

We've done an approximate yield of about 8-9%.

Our properties in Essex are reaching 4-5%.

-And it's doubled here.

-Right.

'With Claire in charge of the paperwork and the practical skills of Rob and Steve,

'this should be a winner. They have an £8,000 budget and a sensible £3,000 contingency fund

'in case there are unexpected horrors. There are no major structural changes planned.

'The kitchen will be replaced, but there's no decision on the wet room. What about the garden?'

-What are you going to do outside? It's a mess, but nice space.

-Absolutely, yeah.

We'll deck part of the area, really low maintenance, shingle.

And a couple of bedding planters. Nothing major.

Just to make it look tidy.

-And who'll be doing the work?

-Myself and Steve. With other people, depending on work commitments.

-And how will you do that?

-We'll be travelling, doing 3- and 4-day stints.

-And timescale for getting it sorted?

-With other work commitments, probably six months. Possibly nine.

I know it's a long time, but it's fitting with other commitments.

-It's a realistic timescale.

-Are you daunted or is it water off a duck's back?

-Water off a duck's back.

It's the travelling. The work I don't mind.

-Listen, congratulations.

-Thanks.

-Good luck with it.

-Thank you.

-I look forward to seeing how you get on.

So the first project for Rob, Claire and Claire's partner Steve.

How are they going to get on? There's not too many issues,

but whenever you embark on a long-distance renovation, and Essex to Wales is a long way,

it does throw up problems. Still, they've got a generous timescale, 6-9 months.

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

I'm headed for a place near Dover in Kent now,

somewhere that was once home to flour and paper mills.

I'm guessing the vital water source of those industries is also where its attractive name came from.

The property I'm here to see is in a village called River, just a few miles outside Dover.

It's a desirable spot, more leafy suburb than village in the traditional sense

and it's elevated over the valley with lovely views. The view of the property is somewhat obscured,

but I'm told behind this hedge is a three-bedroom house.

It had a guide price of £170,000-£175,000.

'Today is not ideal for those grand views, but there is a hint of what might be visible on a clear day.

'Pop round the back and there's an impressively grand-looking property in an equally-impressive garden.

'I believe the house once owned much of the surrounding land before it was sold off 70 years ago,

'so it really is a remnant of a grander age.'

Oh, two rooms! Which room to go in? I do like to have a boot room,

somewhere to walk in and take your coats off, put your muddy boots and all the things for the dog.

But I'm guessing this is the kitchen. It's a little disappointing because it's so small.

You could think about knocking through and opening this space up,

but I really like this. It's like an old Rayburn or a mini Aga.

What you could do is get somebody in to restore that, powdercoat it. It would look fantastic.

So another idea would be to think about knocking through here.

I'm just wondering whether this reception room is going to be big enough. Ah, yes.

Now this could work. You could leave that little boot room, knock through this wall, open this up.

You've got a lovely big window so you could have access to the garden,

but some worrying signs of damp. Look at the state of that. Not good.

I think there will be bits and pieces wrong with it. It's a property you'll want to strip back

to the bare brick. You'll need to spend money in here. But lots of opportunity.

'There's another sitting room, so loads of flexible space.

'Although there is tons to do, there are still character features

'like this lovely staircase leading to three good-size bedrooms.

'This house is from a time when houses were on a different scale.'

# Oh, won't you tell me

# Where have all the good times gone?

# Where have all the good times gone? #

'So there will be a great deal of work to make this place better, but is it worth making it bigger?'

Well, you could easily push out to the rear with a conservatory extension,

a loft conversion is also possible, adding another bedroom up there.

But neither of these ideas are going to make you a whole load of cash.

You might only just recover your costs. Personally, I'd look into a bigger development entirely.

In fact, a whole separate dwelling.

You've got half an acre of garden to play with.

There's access along the side and still enough land for a decent garden for each house.

There's no guarantee that the local council will go for that,

but you could buy a home with a lovely garden and find it's a house with a development plot!

'This could be a very exciting opportunity to acquire a plot in an established residential area,

'not an everyday find. If bought for anything near the guide price of £170,000-£175,000,

'it could well be a moneyspinner.

'It would definitely be worth doing some research here to choose between a development opportunity

'or a family home and garden.

'To help weigh up the evidence, a local estate agent took a look.'

First impressions,

it needs quite a bit of work, but it's got a lot of potential. It could be a really good home.

'What sort of returns could be made once it's refurbished?'

I think if the property was refurbished to a high standard, it could be worth £250,000.

If it was extended to the side, you could be looking at somewhere in the region of £300,000.

'But with that eye-catching garden ripe for development, what are the pitfalls to be wary of?'

The council would have some impact on what you could put on the site.

A three-bedroom detached could work, but again it's down to the council.

The downside if they got planning permission is that it would eat into their garden size.

It would impact on their house.

'How much of an impact could that have on the value?'

It would probably devalue it by 20% or so.

'What sort of sale price could a new development achieve?'

A new three-bed detached could be worth £175,000-£200,000.

It's a decent development opportunity in a popular part of Dover and maybe the chance to build

some serious profit in the garden.

Let's see who went for it and what they thought at the auction.

This property came up towards the end of the day.

Now we come to a lovely property

in the lovely village of River. Start me at 170,000?

160, then? Give you all a chance. 160,000 anywhere?

150. Thank you. 150 I have. I don't mind where we start. 155. 158.

And 160.

165. That's the gentleman I like. 165. 168? 168.

And 170? 170 I'm bid.

172?

At £170,000 I'm bid. You're all out at the back at £170,000, then?

For the first time. 170,000 for the second time.

170,000. Third and final time. At £170,000. Are you all done?

Sold at 170.

-Lovely property.

-'The successful bidder who got the lot for £170,000 was Thomas.

'But he was the proxy bidder for his nephew and niece, Dan and Robin, as they couldn't make the auction.

'They're now the new owners of the property. Dan lives locally in River with his wife and new-born son.

'He manages a builders merchants so seems the ideal person to update this place.

'I met him to find out more.'

Dan, congratulations. This is great news. You weren't at the auction.

-No, my uncle went on my behalf.

-You couldn't be there on the day!

-No, we kept in touch.

Unfortunately, I was away at a conference, so I couldn't go.

-The one day in the year I couldn't get away.

-Can you believe that? It fell on THAT day.

My dad said it was a sign not to do it, but I decided against it.

Although it was fairly last-minute, the whole thing,

we thought it was a good calculated risk.

-How last-minute was this?

-I literally walked past. I've got a new-born son, Harry,

and I walked past with him in the pram and saw so much potential here.

It wasn't until we actually bought it that we saw there was even more potential.

-That was a very expensive baby walk.

-Absolutely, yeah! Yeah.

'The initial was to renovate and for Robin, Dan's sister, to move in,

'but the potential here has made the siblings rethink their strategy and now they aim to sell it.

'But first they want to combine the kitchen and dining room into one large kitchen/diner

'and add a single-storey extension onto the living room.

'The upstairs layout will stay as it is, possibly with an en suite for one of the bedrooms,

'but they also have plans to extend into the loft to create a fourth en suite bedroom.

'I reckon they do run the risk of overdeveloping this house,

'but they're sure they've got their sums worked out on that score.'

You're maxing this house out, but what about the real potential?

Have you spoken to the planners about building a separate dwelling?

I have indeed and it is a big possibility.

We never even thought of that when we initially purchased it,

but you come here and you stand and start seeing bigger things.

But you're not really thinking about doing that. You want to extend.

I want to extend this house towards the rear,

but there's no reason with the room that we've got next door

that we couldn't almost mimic this property once we finalise it and do the same next door.

-Hold on. You want to do both options?

-I would love to do both.

-You want to extend this and then build another one next door?

-Yes.

-That really will be value for money.

-Yeah, yeah.

'That's a different ball game altogether. Dan and Robin are planning a major refurbishment

'and a whole new build from scratch. They have a £35,000 budget and a three-month turnaround.

'Then they hope to have a new build on the plot in nine months.

'Even for experienced developers this would be a full-time job.'

What does your wife and baby think about this?

-They obviously want my time as much as possible.

-And won't get that!

Which is why it's good that my sister is my partner in this. She's got more time.

She works less hours than me.

-I'll be getting her to manage the project throughout the day.

-It's not for a novice.

What experience does your sister have in building?

-She doesn't have any!

-None at all?

-None.

-I think you're throwing her in the deep end, if you ask me!

But there's a lot of tradesmen that I know and people I can trust to manage it.

It's just good for her to be involved but also be available to go out and get things and pay for things.

Do you think you'll start off with this property first, concentrate on this, sell this,

and then think about potentially using the site next door? Would you divide it up and sell it

-without that portion of the garden?

-We would, but if we could sell them at the same time

or at least when the other property is up, it would be nice to show two premium houses for sale,

-side by side.

-It's a bit of a BOGOF. Buy one, get one free. Buy this one and move in next door.

-Maybe, who knows?

-So do you think you've found a little pot of gold buying this?

Yeah, I hope I've found my first pot of gold. Yeah, yeah.

-Good luck with this project.

-Thank you.

-It'll be interesting to find out what you actually do here.

Thank you.

I'm surprised Dan didn't spot this potential earlier,

but I am so glad he has now.

It is a big undertaking for a first project, though,

and the siblings have got a lot on their hands, but if they get that planning,

that is a big pot of cash at the end of this River rainbow.

Find out how it goes later in the show.

Coming up: this place in Middlesbrough has a noisy neighbour.

However, if you need a pint of milk or petrol for your mower, you haven't got far to go.

Near Dover, could Dan's double development land him in deep water?

I've easily got another 30K to spend, I believe, to finish this property.

But first, back in Cardiff, something just had to go.

Textured ceilings are not an in thing so we replastered all the ceilings.

'We return now to Cardiff and the Adamsdown area, 10 minutes from the city centre.

'This ground-floor one-bedroom flat had a compact wet room and large garden.

'Rob and his new developing partners, Claire and Steve, bought it for £40,000.

'Unfortunately, Steve couldn't be with us on our first visit.

'Rob had been an electrician, Steve's apprentice, and was now learning the art of development.

'However, this project wasn't exactly on their doorstep

'and travelling from south-east England to Wales was a major factor.'

-Who'll be doing the work?

-Myself and Steve, yeah, with others, depending on work commitments.

And how will you do that?

We'll be doing 3- and 4-day stints, and then travelling back home.

'The team had an £8,000 budget and a relaxed 6-9 month timescale for the renovation.

'When we returned 9½ months later, Steve had come along with Claire and Rob

'to show us the result of their hard graft. From the start, the kerb appeal looked promising

'with a freshly-painted exterior and new front door.

'Inside, the bedroom has been freshened up with new flooring and new cupboards,

'while at the back the flooring continues to a spacious, light living room

'with the added feature of newly-installed patio doors.

'But it's the contemporary kitchen that really catches the eye here.

'It's beautifully tiled and perfectly finished off, as Rob explains.'

There was a pretty basic kitchen before, so we've stripped it out, redesigned it, formed an L-shape.

Oven was originally here so we've integrated it into the units.

Downlighters we've installed to reflect light off the cabinets.

The new floor we've put in runs through into the bathroom. It's minimal and just flows, really.

The washing machine was all exposed, so we've put some doors across it.

It makes it a bit quieter as well.

I'm really happy with the result. It's turned out really well.

It's much brighter, much more usable space, lots of storage.

It just feels bigger.

'The style in here certainly gives the kitchen a unique lift

'and the wet room is no less impressive.

'This definitely has a touch of class about it,

'but there were problems getting to this point, as Steve explains.'

The bathroom's a wet room and when people had a shower, it was seeping through,

and the whole floor slab was saturated. And it ran the wrong way.

So when you had a shower, the water ran out of the bathroom and into the lobby.

We had to completely strip it out and put a waterproof membrane in and retile it.

I think it's been designed very well, especially the screen. You can use the toilet without getting wet

cos it's dry now! And, yeah, I think it works really well, much better than it was.

'Steve and Rob did the entire renovation and with Claire designing the look of the flat

'a lot of care and attention has been devoted to achieving the perfect finish.

'This experienced team know that cutting corners does not a good rental investment make.'

Through our experience - we've got a small portfolio -

we find that you can buy medium-priced products and, if fitted correctly, they'll last for years.

The observation of bits and pieces like the textured ceilings - that had to go.

It's not an in thing now, so we replastered all the ceilings.

Obvious things that were really bad and needed TLC.

# Little things that you do

# Make me glad I'm in love with you... #

'It's not just the inside that's had an eye for detail.

'Beyond those new French windows, the team have created something worthwhile from that grim garden.'

When we started, the whole garden was a mess. It would flood this area.

We put this decking down and covered over where the flooding was and put extra drainage in.

There were two planters either side, so we extended them round to join up.

There was a big concrete step at the back which was really rough.

We put false grass down to brighten it up with lower maintenance.

'The trio took three months to do the actual renovation,

'but work commitments meant it was spread over 9½ months.

'After driving the three hours from south-east England, they'd spend several days here.

'How did their £8,000 budget stand up?'

We actually spent £8,400, but we did put French doors in, which we hadn't originally planned.

And we did a lot of replastering and replacing the ceilings,

so that's why it went slightly over our £8,000 budget.

'Add to that their purchase price of £40,000, the team have spent a total of just under £48,500.

'What do two local estate agents make of this latest addition to Cardiff's property rental market?'

When I first saw it,

it was probably OK, but now it looks like it's been totally transformed, which is a nice surprise.

'First impressions, very impressed with the refurbishment that they've carried out here.'

It's a very good standard, very neutral, very open canvas for somebody to put their stamp on.

The garden is outstanding. It's going to be a major selling point for any buyer.

'With the team looking to build a rental portfolio in the area,

-'what income could the flat achieve?'

-This would achieve

£475, maybe £500, per calendar month.

If they rent, they should hope to achieve £500 per calendar month.

500, yes, good. Acceptable. 475, a bit low.

'If they manage to get that figure of £500 per calendar month,

'that would generate an annual rental yield of over 12% for the team.

'The estate agents reckon the flat could sell for £80,000, which would mean a profit of £31,600

'minus the usual taxes and expenses, of course.'

That's what we budgeted for. Well, that's what we calculated the end resale value would be,

so that's within our expectations.

'It seems that the team have got their sums right on their budget and valuations,

'so hopefully they'll get the returns.

'With the success of their first joint venture, will Rob be included in their future projects?'

-- Yes.

-Oh, definitely.

-- Every day of the week.

We're looking forward to it.

'I'm in Middlesbrough, North Yorkshire, not far from Redcar,

'in Ormesby, now a suburb. The name Ormesby dates back to the Domesday Book,

'although the property I'm here to see represents a more recent bit of history.'

Throughout the village there are reminders that this was once part of the Ormesby Hall estate.

In particular, these cottages,

built probably for estate workers in the very popular for the time Arts and Crafts style.

The one I'm here to see is this one at the end. Two bedrooms and a guide price of £65,000 plus.

Let's take a look.

'First off, though, this end terrace is perhaps not in the best location.

'It's right on a busy road opposite a pub and next to a petrol station,

'but the property itself is certainly attractive enough.'

Well, a fairly simple layout. In some instances, that's a really good thing.

Stairs going up there, splitting off either way at the top.

One living room over that side and then through to this side, where there's a similar one.

There's little features which I love. This little, I don't know, alcove-y area,

with the little window underneath the stairs. Maximising space.

And just throwing in exactly that - a bit of character. Through here to a recently refurbished kitchen.

Not dislikeable at all, actually. You could pretty much, with a bit of cleaning up,

leave this as it is, but you might want to do your own thing.

But straight away I'm seeing... You know, this is great.

# Yeah, yeah There's something 'bout you, baby I like

# I said yeah, yeah

# There's something 'bout you, baby, I like... #

'There's plenty of character here. Some of it may be unwanted,

'but there's space, too, with those well-proportioned reception rooms.

'Upstairs, there's more to like - a good-sized bathroom with a modern white suite.

'And two bedrooms, one larger, and the other not so large, but both in decent condition.

'A spot of redecoration and it could be ready to go.'

It's the little things that make you fall in love with a property. This is one, this round window.

It doesn't open, but what a charming thing and I'd certainly want to highlight this.

'And there's much to like outside as well as inside.'

At the rear of the property, you get a feeling for the character

with these brick archways above the windows and the exposed stone. It really is lovely.

You've got this little courtyard, a half-decent-sized garden,

but you really do get a flavour of how close you are to the road, the petrol station and store next door

and the pub opposite. All those things could be an issue - noise from the pub and the road

and potentially late-night noise from the garage. But the good news is if you need milk or petrol,

you haven't got far to go.

'OK, am I being positive or just plain Pollyanna-ish about this property because I like it?

'It may be up to a local estate agent

'to take a clearer-eyed view of this two-bed,

'guided at £65,000 plus.'

Positive - it's a good location for amenities. In pretty good shape.

Not that much to do. Would make a cracking first-time buy.

'Bearing in mind that guide price of £65,000, what sort of returns could there be here?'

I think once renovated the property could achieve as much as £110,000.

'Would it be attractive as a buy to let?'

In the current climate, there's a huge demand for rental properties, this area in particular.

I would expect the property to rent, again once renovated, for maybe £500 per calendar month.

So not without its potential issues, this one, particularly noise from the immediate environment.

But this is a property that absolutely oozes character

and I'm sure somebody fell in love with it under the hammer.

Lot number 51. £65,000 is where I want to start. Do we have a bid of 65,000?

Thank you. 65 bid.

I have the one bid of 65,000. Do I have 67?

67 bid. 69?

69 bid. 71?

71 bid. 73?

73 bid. 75? No?

We're at £73,000. 75 anywhere else?

I'll take one if it will help. Do I have 74? 74,000 bid.

I need 75 anywhere. 75,000?

I'll take 500 if it will help.500 bid. 74 and a half. I'll take 500.

75? No? I'm here and I want to sell at 74 and a half.

Last chance at 75. Going once at 74 and a half. I'll take 500 from either of you.

You keep looking at each other. She wants it. Look at her eyes.

75 bid, 75 bid.

I'll take 500. I'm going to sell. Selling it once at £75,000.

For the second time at £75,000.

Sold to the lady sitting down.

'Those successful bidders who secured the lot for £75,000

'were father and daughter Len and Karen. Karen works as an optical consultant

'while dad Len is an ex-fireman. He's now self-employed and teaches Health and Safety courses.

'I met them both to find out their plans.'

-Great to meet you both. Congratulations.

-Thank you.

-Tell me why you wanted this place.

-I'd seen it a few times and fell in love with the character of it.

-Great. Is it for you, then?

-Yeah. My first home.

-Really? Fantastic.

-At what point were you drafted in, Dad?

-Well, I came to look at it in the first instance.

And then we came round with a friend of ours, who basically said, "Go for it."

-We put an offer in at that time, which was refused.

-Right.

-That's how we ended up at the auction.

-Was your offer more?

-Er, the offer was on the head, really.

-Exactly the same?

-Yeah.

-So you got it for what you offered?

-Yeah.

-Oh, great! How was the auction?

Nerve-racking. It was my first time, so it was a new experience for both of us, I think.

-We actually went to see how much it was going to go for.

-Really?

-No intention of buying it.

Really?! No intention?

We thought it would go to Karen's budget and then way over that.

-Right.

-So we bid up to that and it stopped.

-Yeah.

So I found myself in the position that I was a bidder. I expected to walk away with the experience,

-but I came away with a house.

-'For a first-time auction buyer,

'optical consultant Karen didn't make a spectacle of herself.'

# I can see clearly now the rain has gone... #

'I reckon she's got 20/20 vision when it comes to spotting the charm of this place,

-'but that wasn't all that attracted her.'

-Well, it was the character,

the location for me for work,

-being close to family. It was all right in the centre for me.

-Ah, brilliant.

I'm very happy with the house itself, the history of the house, the structure of the house.

I wasn't too keen on the location with the garage next door, but it could be very handy.

So tell me what you're going to do.

My main concern is the issues with the roof.

-We'll get that seen to.

-Which particular issues?

There's ridge tiles that are loose due to issues from the property next door having a fire last year.

-Right.

-And just general maintenance to it.

And then securing the property. Having windows and new doors put in.

The major one is the damp. We know we have damp. It's a matter of getting professionals in

-to get it sorted.

-Right.

-And then the windows and security side.

We can only do it in stages, so it's not all going to be done tomorrow.

'Karen is understandably eager to move into her first home,

'but she's wisely given herself 3½ months to get those jobs done.

'She also sensibly plans to leave the kitchen and bathroom as they are.

'That should save on refurbishment costs and that's where dad Len comes in handy.'

What will your involvement be, Len?

Probably I'll be drafted in to do the decoration et cetera.

-I don't really know at the moment.

-Bank of Dad!

That's a very important role!

-Yeah.

-So you've helped out with the finance?

-No.

-Oh, OK.

-She's raised her own deposit, sorted the mortgage out.

She's got a small budget to do it, so hopefully we'll do it within that.

-And if not...

-That's when he comes in!

# If you want it Go out and get it

# You've got to do it yourself Do it yourself... #

-So what's the budget?

-The budget - I've got five grand to spend.

I'm hoping to get everything done within that budget by using local amenities, really.

-We've got people close by.

-Do you think that's a realistic budget?

From the quotes we've had so far, yes.

We've been very surprised with some of the quotes.

Hopefully, within that £5,000 we'll have it liveable or more than liveable.

-And it'll be your first place.

-It will.

-Fantastic.

Congratulations. And good luck.

I look forward to seeing how you sort it out.

So a first auction and a first property for Karen.

I can't wait to see how she gets on turning this house into her home.

With the help of Dad, of course. Find out how she gets on later in the show.

-It's time now to pay a visit to our plucky developers.

-Will they welcome us back with tales of success

-and soaring profits? Or will things have turned sour?

-Let's find out.

'Back now to the Kent town of River, near Dover, where earlier we met Dan.

'He bought this house with his sister Robin. They jointly paid £170,000 for this detached house

'sitting on a large plot as their first investment.

'When they discovered the full potential there, they spotted a great opportunity.'

I want to extend this house towards the rear, but there's no reason with the room we've got

that we couldn't almost mimic this property once we've finalised the ideas

-and do the same next door.

-So you want to do both options?

-I would love to do both options.

-Extend this, take it as far as you can, then build another next door?

-Yes.

'There was the small matter of obtaining planning permission, so they planned to refurbish first

'and then, providing planning permission was granted, would build the new house.

'We've come back 14 months on to join Dan and find out if they've maximised that opportunity.

'Oh, no! The house is shrouded in scaffolding.

'But what about the new build?

'Nope. Nothing there either. So what has been done?

'Well, thankfully, at least the rear extension has started.'

We're here in the extension. The first thing we wanted to do was take the darkness out of the property.

We introduced the bi-folding doors that open right out so you can use your patio

as part of your living area during the summer months.

We introduced the roof lanterns as well to really draw the natural light in.

It's almost creating an orangery inside the house.

'The ground floor layout has totally changed and been completely opened up.

'Apart from the kitchen/dining area, there's an office space to the right and a separate utility room.

'Upstairs, the three bedrooms have been refurbished. The bathroom's still to be fitted.

'But if you want a real treat, look at this hand-made oak staircase.

'Gorgeous!

'And the lovely oak floors, solid wood doors and the attention to detail

'all hint at how fabulous this house will be when it's finally finished.

'What about the loft conversion? Well, Dan got planning permission

'and has made this a four-bedroom house with an en suite.

'And from the top to the bottom there's even more accommodation in the former cellar.'

We turned it into what we call the snug. It's a nice little living area. We felt it added value.

'So it's a work in progress albeit slow. Dan's been handling it mostly on his own

'as his sister has a new job and is working some distance away.

'He's also been finishing his degree and working full-time.

'Phew! So as if he didn't have enough on his plate, what about the plans for a house on that plot?'

Unfortunately, we've had some issues with the local planning authority

and they refused planning. We're going through the appeals process.

We're really confident that we'll win because the street is crying out for a property to finish the lane off.

As you can see, we've nearly finished the original property, but now we intend to put a new-build on

that's exactly the same. It's going to be a twin.

So a four-bedroomed house with some big car ports out the back.

'Dan feels the plans would be a real asset to the street

'and he'd like to keep to the style the house had before. This was an ambitious project

'and has dragged on past their original deadline. Combined with going for a superior finish,

'how have all these factors impacted on their original 35 grand budget?'

We're currently on about £140,000 that we've spent so far,

but I've easily got another 30K to spend, I believe, to finish this property.

'Wow. That sure is a lot of budget, but don't forget

'they originally set out to just refurbish this house.

'They've taken it to a whole new level and, of course, there's still the new build to do.

'If they do finally get planning permission, how much will it cost?'

The new property, I hope to complete all works within £200,000.

'The numbers are really beginning to mushroom.

'Dan and Robin paid £170,000 at auction and the final renovations will being their total so far

'to £340,000.

'Add £200,000 for the build costs of another four-bedroom house

'and that'll be a grand total of £540,000.

'Along way from that original £35,000 renovation budget,

'so will their first venture into property pay off? We asked two local estate agents.'

'I think the layout and accommodation works really well.'

Four good bedrooms, two bathrooms, really nice open-plan living space.

It's a nice big house, four-bedroom family property. You've got a very large lounge,

opening up on double patio doors. I think it's a really nice house,

with a quality home.

'What do the experts think this place could be worth, if the new build wasn't built?

'More than the £340,000 invested so far?'

At completion, I think this property will sell for about £400,000

and could be marketed at, say, £420,000.

If this property was put on the market with no house next door,

I'd put a value of about £450,000.

'Those valuations would produce a profit of £60,000-£110,000 before taxes and expenses.'

That's sort of in the region that we were expecting, really,

but we'd be expecting, once it's finished with the car ports, to get around £400,000-£420,000.

'That value is based on the huge plot the house sits on.

'What impact would there be on the value of this house if the new property is built?'

If a new house is built next door, it will slightly diminish value here.

Maybe you'd need to pitch the price at just beneath £400,000.

Because of the closeness, the proximity of the house next door,

I would say it would reduce the value of this house to £375,000.

'What does Dan think of those prices?'

That would be the absolute minimum that we'd be happy with.

If we get either of those prices, we'll be all right.

'If both houses were to sell for around £375,000,

'that would make a total of £750,000.

'Dan reckons the final project costs will be £540,000,

'which means a profit of £210,000, minus the usual taxes and expenses.

'Is he glad they went beyond a simple refurbishment

'and is he still pursuing the potential to build a new house in its huge garden?'

Obviously, it's a lot bigger than we set out.

But it is essential that we proceed with the new build

because a lot of the profit is tied away in there.

I think it's important for the street scene to fill this space between the two houses.

They'll be two very nice houses.

'We now return to Ormesby near Middlesbrough and this two-bed terraced house.

'It was bought by Karen, an optical consultant, who paid £75,000 for it.

'There were minor problems, but as the general condition was good, those couldn't stop Karen

'falling in love with it. However, she'd gone to the auction with father Len not actually expecting

-'to buy it.'

-We actually went to see how much it was going to go for.

-Really?

-We had no intention of buying it.

-Really?!

-What do you mean?

-We thought it would go to Karen's budget and then way over that,

-but it stopped.

-Yeah.

-So I found myself as the bidder.

I expected just the experience, but I came away with a house!

'And that's what Karen had lots of. After a bit of a spruce up,

'she hoped it would take no more than £5,000 and 3 months to do it.

'Then she planned to move in and make it her very first home.

'Five months later, we're back. The exterior is now more inviting with a new front door,

'new windows and a splash of paint. But is the interior as welcoming?

'Well, Karen has really given us a sight for sore eyes.

'The living room now looks very cosy with the soft tones and furnishings blending in with the fireplace.

'The dining room also looks good, redecorated and with new flooring laid.

'While the kitchen has not been replaced, it's been made much more homely

'with lovely little personal touches.

'Now that's a surprise - a new bathroom suite has been installed, which wasn't in Karen's plans.'

This was one room we weren't going to do a lot in,

but I decided as it was going to be my home, I wanted it to be my little haven.

We've had to put a false wall in to straighten up the bathroom.

I put a new bathroom suite in and my first attempt at tiling.

There were a few problems, but it's turned out well

and there was a little issue with damp on the window wall

which took a little bit of drying out, but we got there.

'And as for the bedrooms, both are redecorated and furnished

'with a decor contrasting well with the furnishings. And Karen's been busy outside, too.

'The huge rear wall has had a fresh coat of paint. Gutters and fascias have been replaced

'and the roof tiles re-laid. It all gives the house a brighter, more solid appearance.

'That messy garden has been tidied up, too, but it's the windows that finish the place off perfectly.'

We initially thought we had to have planning permission as it's a conservation area,

but then we got word to say it was permitted development.

-So all the windows are in keeping with the rest of the area.

-It's soundproofed the property.

And just the look - it's a really nice finish.

'It's a good move, keeping the noise out from that busy road, plus they have a good-looking home.'

# It's so quiet in here

# So peaceful in here

# So quiet in here

# So peaceful in here... #

'But the renovation involved more work than they anticipated

'with several rooms needing replastering and rewiring.

'Tradesmen were called in for those jobs, but Karen, Len and his wife got stuck in

'in the evenings and at weekends.

'No doubt everything was done in perfect harmony?'

There's been a few disagreements on little things. At the end of the day, it's my first home,

so it's completely new to me. Some things definitely I've got to agree with him with. Some I don't!

'There may have been disagreements, but Len thinks the final finish is one for Karen to be proud of,

-'though there's been one unexpected side effect.'

-I'm going to have to start on the family home after this.

The standard here, I'm going to be under pressure to improve things at home.

# Hey, hey, hey, hey What you doing to me?

# Hey, hey, hey Look what you've done... #

'Karen may have set the gold standard for her parents to follow,

'but did she achieve that finish on her £5,000 budget or did the Bank of Mum and Dad have to step in?'

We did go over. We knew we would, but she spent her money and then some of mine as well.

Not too bad.

We have gone slightly over budget, coming in at around £9,000.

But it's to my standard. It's how I want it as a home.

'Has putting such high standards in meant that the top up from Dad's money has been well spent?

'Karen purchased the cottage for £75,000. Add that to her £9,000

'and she's invested £84,000.

'Given the difficulties with the location, are the improvements in her favour?

'We asked two local estate agents. First, the one who saw it before.'

I think the owners have done a fantastic job. It feels really modern. A really quality job.

It's done to a nice high standard. Yeah. uPVC double glazing,

quite impressed with it.

'But should Karen's circumstances change, what sort of returns could the house achieve if sold or let?

'Remember, she has spent £84,000. What would the resale value be?'

In the current market, I would expect this property to achieve at least £105,000, maybe even £110,000.

I'd put it on the market at 105 and expect to achieve £100,000.

'Those two valuations could give Karen a profit of £16,000-£21,000, minus tax and costs.'

I think that's really good. For the work I've done, I think that's a fair valuation.

'The estate agents also reckon that there's a rental return of around £525 per calendar month,

'giving Karen a potential yearly yield of 7½%.

'Getting those sort of returns for the house is something for the future

'and may also mean a trip to another auction with Len, perhaps to find her next home.

'But for now the hard work is done and Karen's already planning her next move.'

I'm looking forward to being able to put my feet up and just relax and enjoy the house.

We hope you've enjoyed today's tales from the auction rooms.

-We look forward to seeing you next time.

-See you then.

-Goodbye.

Subtitles by Red Bee Media Ltd