Episode 30 Homes Under the Hammer

-Hello.

-Lucy and I find property completely absorbing.

To do well, you've got to make sure that you buy at the right price.

And one way that you could do that perhaps is to buy your next home under the hammer.

You need to do your homework if you buy at auction and if you do it well, you could nab a real bargain.

I wonder if any of the properties we're featuring will be great deals?

Here's what we're featuring on today's show.

'In Lydd-on-Sea in Kent, I find a large house where appearances are deceptive.'

Hold on. Two bedrooms? That can't be right.

'In West London, I try to get my head round the capital's property prices.'

Believe it or not, a property on this street sold for three million pounds!

'Finally, to Stoke-on-Trent where things are a little different.'

Let me just tell you the guide price first - £25,000. Yeah, 25.

'All these properties have been sold at auction.

-'We'll find out who bought them and what they paid when they went under the hammer.'

-Your lot. Well done.

This is Lydd-on-Sea on the south Kent coast.

Now, these days, it's just a Mecca for holidaymakers,

but go back a few hundred years and it was a pretty fair bet that if you lived in these parts,

you were involved in the local fishing industry or the smuggling that was rife in the area.

Lydd's image is somewhat cleaner these days,

but the question is, did the local auction house smuggle in a bargain for me to uncover?

Let's find out.

Built post-war for holidaymakers from nearby towns,

Lydd-on-Sea sits on a vast expanse of pebbly beach overlooking the water.

With the shadow of Dungeness power station looming in the background,

on a sunny day like today, it seems almost otherworldly.

Lydd-on-Sea is not really a town or a village with a centre as such.

It's more a development lined up facing its best asset - the sea views.

And the property I'm here to see takes full advantage of the outlook.

It's this two-bedroomed house. It had a guide price of 135,000 to 145,000.

Hold on. Two bedrooms? That can't be right.

# You can't judge a book by looking at the cover... #

Either it's an honest mistake in the catalogue

or they must be two of the biggest bedrooms I'll ever see in my life

because from the outside at least, this looks like a large house, so what's going on?

Time to step inside.

-RINGS BELL

-Anybody home? I just had to do that.

What a fabulous bell and look at this front door!

You've got a big archway as soon as you walk in and a huge reception room.

Wow, this is a mighty old space!

You've got double doors leading out to a wasted bit of conservatory. I'm not quite sure that works.

You've got a fireplace here. Not to my taste, but you could change that.

Patio door leading out to a nice bit of hard standing outside, so a bit of outside space already,

then we're through to a little hallway with a downstairs loo and a shower room.

Fantastic bonus. And I'm not quite sure, really, what this is.

You've got a fireplace over here, so that's two fireplaces.

It might be a little dining area, but it feels quite walled in and dark.

And through here is the kitchen.

Now, this is a fantastic space.

Is it salvageable? I'm not sure. You could think about painting it.

Probably not worth it. You might want to buy a nice, bright, shiny new kitchen.

But the best thing is, you've got an amazing garden out there.

I think the thing that strikes me is this house sits on an incredibly large plot,

but I want to feel like I can see the garden, I can see the dining room,

I know I've got the sea outside.

It's not quite working. I think we'd need to knock a couple of walls down and just bring the outside in.

Then I think it might work for me.

# And let the sunshine in

# Come over right away

# Let the sunshine in

# And brighten up my day

# Send those clouds away Let the sunshine in... #

This is a big house without that all-important feeling of space and light.

It really needs to be opened up and the somewhat dark and muddled rooms joined together.

There's a sun room at the back, but again it feels like it's been tacked on with no natural flow to it.

There's even a summer room in the garden which is yet another box.

It makes this place seem almost like a series of different boxes stacked together.

Upstairs, there are two bedrooms - one very large master bedroom and a smaller double bedroom,

but there are also two bathrooms.

I've heard of clean living, but that's ridiculous.

I really think one of those bathrooms would be much better converted into a third bedroom,

but there's one layout feature that I do like.

What you've got leading off both of these bedrooms is this balcony.

I would have loved this as a kid. I love it as an adult.

It really is quite spectacular.

The coast, the sea, a beautiful day like today... Marvellous.

# And I love to live so pleasantly

# Live this life of luxury

# Lazing on a sunny afternoon

# In the summertime... #

The views from the balcony might be great,

but the height of the railing around the balcony is much less pleasing.

It would need to be addressed to meet modern health and safety standards.

There's no doubt you're in a great spot here, but how to make the house match up?

Time for a bit of blue sky thinking.

Just say you think having two bathrooms upstairs is a luxury worth keeping,

you could easily turn the garage into an extra bedroom, a study and occasional sleeping area for guests

or maybe think even bigger which you could do with this plot

and build a double-storey extension on the back and add perhaps another two bedrooms upstairs,

or flip the property round, put the bedroom space on the ground floor

and have a lovely, big, open-plan living space upstairs with a balcony overlooking the sea.

The property is in a great position and while there is a ceiling price you should be careful not to breach,

the location warrants someone splashing a bit of cash here just to make it bigger and better.

But just how deep will you have to dig in those pockets

to make this house as fabulous as I think it could be?

And where to start?

Time for some advice from a local estate agent.

They should certainly convert it to at least a three-bedroom house.

There's plenty of scope for an extension upstairs.

Downstairs, there's some good living accommodation, but it needs an extra bedroom at least on the first floor.

Yes, there's no doubt it could do with an extra bedroom or two.

But would it be worth spending money on a house that was guided at 135,000 to 145,000?

Completely renovated, by adding a fourth bedroom perhaps into the garage and an extra bedroom upstairs,

you could be looking in the region of £250,000.

I think if we were to put this up for rent as a four-bedroom property,

you could be looking in the region of £850 to £900 per calendar month.

With its location so close to the sea, this property could also be a holiday let.

What kind of weekly rent might it achieve for that?

If you use it as a holiday let, you could be looking at £350 a week.

Options for sure and views that make it worth the effort.

Let's see who went for this lovely house in Lydd-on-Sea at the auction.

Lot 12, detached seafront house.

Good-sized plot. Two bedrooms and two bathrooms upstairs.

It's got absolutely fantastic views, fabulous views right across the beach there to the sea.

What may I say? Start me at 145?

145 I'm bid. 150?

150. 155? 155.

157? 157. 160?

160. 162?

£160,000 I'm bid.

Raid the kids' piggy-bank. £160,000 I'm bid.

162 do I see? 162.

165. 168?

168. And 170? 170.

172? 172.

175. 176? No.

At 175,000... 176.

177...

180. 182?

182.

190?

Yeah, 190?

190. 192. 194?

194. 196?

No. At £194,000 I have in the front row.

At £194,000 then for the first time...

£194,000 for the second time...

194,000 for the third and final time.

At 194,000, are you all done? Sold at 194...

'For 194,000, nearly 50 grand over the guide price,

'the successful bidders for the Lydd beach house were Roy and his aptly named wife Sandy.

'Roy used to run a property developing company

'whilst wife Sandy took charge of the administrative side of the business.

'He retired just three years ago at the age of 71.

'With six grown-up children to call on, they shouldn't be short of a hand or two.'

Roy and Sandy, congratulations. Who have you bought this house for?

It's a joint venture between us and two of our children for a holiday home.

We had a place here before.

-You've been looking for something new?

-Yes.

-Tell me about the kids and why they're involved.

I've got a son-in-law who we call The Destroyer,

so he will be here and he'll take anything down I want in seconds.

I've got a grandson who's a carpenter.

I've been in the game all my life and so have a lot of my family.

I've got 11 grandchildren and four great-grandchildren,

so I think it's going to get plenty of use.

'It sure is, but before it gets invaded by the whole family,

'it will need a little bit of work and some of Roy's know-how.'

So, now, Roy, you've been in the game all your life.

-Yes.

-Tell me about that.

I'm actually a speculative builder.

I started my first house when I was 21 and I've done quite a few ever since.

I haven't done much of this refurb work. It's been normally new stuff.

Sandy doesn't normally have a lot to do with it, being new work, but this is of great interest to her.

I'm hoping she'll take... She will. ..a very great interest in the inside and I shall look after the outside.

What are you going to do to the inside to turn it around

-because at the moment, two bedrooms, two bathrooms?

-Yes, it's strange.

It's all a bit... Inside it doesn't take in the views outside.

The idea is to turn what is now the pink bathroom and the pink bedroom into a bedroom and en-suite

and the other bedroom upstairs will have the other bathroom.

-OK.

-Then we're going to turn the garage into a bedroom.

-Three bedrooms in total?

-Yes.

-Do you not think you could even squeeze another bedroom in?

-I don't want to!

-You've got so many kids, you've got so many grandchildren.

-I don't want them all here together.

What about The Destroyer? How excited is he?

Tell me what he's going to destroy.

I would like to walk round with him and say, "Get rid of that, take that down, move that."

He'll be starting with the balcony. That'll be the first thing to get rid of.

I'm still not entirely sure that we shouldn't knock down the wall

between what is a conservatory at the back and the kitchen and make that into one big room through there.

I think so. Roy, I think you should do that because at the moment, you're so cut off.

You come in here and you can just about see the sea,

then you go through there and it's not terribly exciting, but when you see that garden, it's amazing.

That's a fantastic garden, but you don't see it until you get to the end of your kitchen.

-That's the area to concentrate on.

-Yeah.

-What's your budget?

I'm allowing at least 25 with a contingency of another five,

so I'm looking for 30,000.

'I think that £25,000 to £30,000 budget should go a long way

'with the amount of potential free labour they have to hand.

'They're hoping to complete the work in six months, so that all the family can enjoy some summer sun.'

-What do you think the kids are going to make of this?

-I think we shall see quite a lot of the kids.

I think we'll see more of them here than us. They're very much looking forward to it.

I'm so excited for you and really pleased you'll have a wonderful family time here. Well done.

-Thank you. Well done.

-Thank you.

-Thank you.

So, a holiday home for Roy and Sandy and all the family.

I think they'll enjoy the renovation process as much as the views.

Find out how it all goes later in the show.

Well, yeah, you guessed it. I'm in central London today, Maida Vale to be precise.

It's a very smart part of west London.

The properties are like the famous people who live here -

attractive, sought after and commanding huge sums of money.

Now, who's the most famous person you've had in your cab? Apart from me, of course.

-Barbara Windsor.

-Barbara Windsor? Oh, right. Hugh Grant? Really?

# Like the talk of the town

# You've changed, you've changed

# Your place in this world... #

'This is an area that's changed over the years and is increasingly in demand.

'Even by London standards, it's considered one where deep pockets are generally required.'

Cheers. See you again.

Here I am. Believe it or not, a property on this street sold for three million pounds.

No, you did hear me right - three million. It's not even detached!

The property I'm here to see is slightly more affordable.

The guide price was 390,000 quid. It's a two-bedroom flat in this building. Let's take a look.

The flat is on the lower ground floor and has a healthy 999-year lease.

It also has its own separate entrance at the side,

but will the inside be as rosy as the outside?

Well, of all kinds of properties, basement flats are one of the ones

that you really just don't know what you're going to find until you walk through the door

and this is a bit of a pleasant surprise.

The first thing to notice, great head height,

and the second thing to notice is somebody has been doing a lot of work.

It's had a new floor put in. I'm not sure whether the damp-proofing is up to standard.

I'd want to have a specialist engineer or maybe a builder to check that out,

but even if you added a few inches on here for the floor, you've still got a lot of head height.

Two bedrooms, which is good news, one there, one towards the back.

And then, um...

Obviously, a bit of work in progress.

# You might need somebody

# You might need somebody too

# You might need somebody too... #

This looks like a job for the professionals.

It needs absolutely everything. There's no bathroom, no kitchen.

The electrics look hazardous, the walls are in a state and it needs a damp-proof course.

It's a pile of serious work,

but it's a two-bedroom flat with plenty of space.

It also comes with a shared garden and another potential bonus too.

Well, space in London properties is obviously at a premium

and with a basement flat like this, you might not be able to go up,

but what you might be able to do is go down.

Turning left as you come through the front door, you find this area.

My guess is it was originally a coal cellar or something like that,

but as you can see, somebody has started digging out.

So, what could this be? Well, maybe an extra room, possibly even a bedroom.

A few things to consider - one, I'm not sure there's enough support for the roof

and I wouldn't dig down any further

before getting a structural engineer in to check you won't undermine the foundations,

but as potential, wow, how exciting is this!

-# Down, down, deeper and down... #

-You need to get professional advice here

or you could be digging a very big hole for yourself if the work went wrong.

A third bedroom would significantly hike up the flat's value.

There's no getting away from the fact that there may have been a fair amount of work done,

but there is still an awful lot to do.

What does a local estate agent make of this basement flat

that was guided at £390,000?

It's great. It's got the potential.

You can add value. It's a good location, nice road.

It's got a garden. I reckon it could be a real winner.

What would you need to do to make it a winner in the very competitive Maida Vale property market?

I did notice a cellar area there. That has the potential to become another bedroom.

You could make it a three-bedroom, but you have to get that right.

If it's too dark and damp, buyers won't like it.

OK, it's only worth doing if it's done well,

so what sort of prices could be achieved if kept as a two-bed?

As a two-bedroom flat, I'd expect to put it on the market for £535,000

and expect to receive offers in the region of £525,000.

And if you squeezed in that third bedroom, what values might you achieve then?

As a three-bedroom flat, I'd expect to put this on the market for somewhere in the region of £585,000.

With a potential rent of £2,000 a month for a two-bedroom and £2,400 for a three-bed,

even at that £390,000 guide price, this could still be a reasonable investment.

What you've got here is a flat in an undeniably great location and yes, there is work to be done,

but do that work and it would be a really fantastic property

with the added advantage of a potential extra room.

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

Lot 46B is a lower ground floor flat.

It's presented in shell condition, so it needs some attention.

Great location, Maida Vale.

350 anywhere? 350 outside...sort of aisle. 350.

355. 360?

360. 365.

370.

375.

380?

380. 385?

385. 390.

395.

400? 400.

405. 410?

410. 415?

420.

425.

430? 425 with you.

426?

425 first time, second time, third and last time, are you all done?

BANGS GAVEL Sold, 425.

'So, for £35,000 over the guide price at £425,000,

'the successful bidder was Chantana.

'She's an office manager and property development is a side-line venture.

'She joined me with her son Edward to explain why she's still keen to buy more properties.'

# You keep me coming, coming back for more

# Coming back, coming back... #

Edward, Chantana, lovely to meet you both. Congratulations. Chantana, Lucy's met you before.

Tell me more about that.

Yes, in 2007.

-Right. And where was that property?

-On Edgware Road.

But that one was a bit of a "close my eyes" type of thing.

-I didn't see the property much.

-How did that turn out?

I'm renting it out now and, touch wood, it's been going smoothly.

It obviously hasn't put you off because here you are in your new place.

-No, it hasn't. Definitely not.

-So, tell me why you wanted to buy this place.

Well, the family money in the bank doesn't earn too much,

so the thing to look for is property

and I have always been in my blood... My family in Thailand are all developers.

# It's in the blood

# All about the family... #

'Let's hope it's in the blood because this development will be down to son Edward to sort out.

'They're keen to continue the renovation to make it a three-bed flat, so he's got his work cut out.'

What kind of experience do you have in building and restoration?

Just bits and bobs, really.

My parents own a few flats around London,

but this really is jumping in.

It's a learning experience.

With all our properties, if I can do a lot of the jobs myself, it will be a good investment to learn.

Talk me through exactly what you'll do to turn it into a lovely apartment.

Just keeping it basic, really.

We want to open this up completely, so it's a kitchen/living room.

-That's basic?

-Well, it's not a supporting wall.

-Right, OK.

I've already checked that out.

And then a new bathroom, a new kitchen.

The bedrooms are pretty well done. You know, just a bit of touching up.

The big work will be the third bedroom where we'll need a structural engineer and whatnot.

With that work, we'll probably bring someone in,

-but flooring, painting, maybe putting the kitchen together and tiling, I want to do myself.

-Wow!

'Edward is looking to gain a rapid apprenticeship in the building trade

'and hopefully, with his input, they can keep the renovation costs down.'

-So, what's the budget for the work?

-Raymond is our architect.

Yesterday, he mentioned

-that he reckoned I could get away with 25 to 35 on the top end.

-Mm-hm.

And what's the timescale?

We'd like to get it finished as soon as possible,

but my mum appreciates I'm trying to learn on the job as well.

You know, she's giving me a nice...

-End of the year, essentially.

-Yeah.

-So, four or five months?

-Yeah.

-You'll not be cracking the whip too much?

-Not too much, but he booked a holiday in December,

-so he has to complete before his holiday.

-Does he? Otherwise, he can't go?

Exactly!

Congratulations. Good luck with it. You've got a few jobs to do.

-And good to see you again.

-OK.

It seems like Edward is going to have a bit of a steep learning curve over the next few months.

Some lessons to learn, but what a great project to practise on!

The big question is, will Mum be satisfied with the quality of the plasterwork and everything else?

You can find out later in the show.

'Coming up, in Staffordshire, is this a case of getting what you pay for?'

That's one thing that could explain the cheap price.

'Back in West London, we check Edward's progress on his first development project.'

It's been a challenge. It has been a bit of a headache.

'But first, have Roy and Sandy brought harmony to their holiday home?'

No, we never agree on anything, do we?

Lydd-on-Sea on the south Kent coast may not have classical seaside beauty,

but its miles of coastline and vast expanse of shingle beach have an undoubted charm,

which I'm not sure can be said of the auction lot we saw there.

Quirky perhaps, maybe slightly unusual,

but what charm it may have had had long since faded.

Although fairly spacious, it boasted just two bedrooms

and yet also had two bathrooms.

Despite these issues, the lure of the sea drew Rochester-based retired couple Sandy and Roy

to purchase the house at auction for 194,000,

nearly 50 grand over the guide price.

Who have you bought this house for?

It's a joint venture between us and two of our children for a holiday home.

We had a place here before.

Sandy and Roy may be retired now,

but previously, Roy ran a property developing company, so he has the know-how.

With the help of tradesmen, family and friends,

plus a budget of 25,000 to 30,000,

they hoped to turn it into an updated holiday home in just six months.

Now, nearly eight months later, we're back.

It's certainly looking more holiday villa than sad seaside retreat now

with fresh, sandy-coloured paintwork and an arched veranda...

..new doors and fascias and a much safer balcony.

I think I do like to be beside the seaside here now.

While inside, the dark and dated reception room has been completely transformed.

With an updated dining area which now leads on to the rejuvenated sun room,

they've definitely brightened up the whole place.

And the kitchen?

Well, the layout might not have changed,

but with the units re-sprayed and new flooring and decoration,

well, what a difference!

But what about the upstairs? Are there now more bedrooms than bathrooms?

Well, originally, this was one passageway through here.

That door didn't exist and this door didn't exist,

so we had one bedroom there, one bedroom here and two bathrooms.

This room was so big that we've been able to divide it into two

and by inserting this door in here, we've created the situation where this bedroom has got its own suite.

Hopefully, it'll add a few pence to the value of the property,

but it's certainly added to our convenience

because we now have three double bedrooms,

a bathroom serving those two and an en-suite for this one here.

So, a clever split of the large bedroom has given them that extra bedroom

without losing their two bathrooms.

As well as ready access to bathrooms,

two of the rooms have access to the new, improved balcony.

So it certainly seems they've been busy.

We've got my son-in-law and we call him The Destroyer.

Give him a hammer and he'll knock anything down! He's been extremely good, extremely helpful.

He's not a tradesman, but he's a very handy sort of a chap.

I've a grandson who is a carpenter. He's been extremely helpful.

And of course my other daughter, Susan, she's helped Sandy tremendously.

We've had an awful lot of help from the family.

Both poor weather and some ill health have prolonged the length of the project,

but it sounds like family and friends rallied round to finish it

and with the plans for this to be a holiday home, not just for Roy and Sandy, but for their six children

and their families, it might become a rather popular destination.

-I think we might have trouble getting here ourselves.

-Now they know it's finished and there's no work to do!

So the couple might have to fight to get any time holidaying here!

So is it all sweetness and light when THEY work together?

No! We never agree on anything. Do we?

-I do. I agree with Sandy.

-He doesn't!

But whoever was in charge has done a good job.

Originally, they had a budget of £25,000. How much did it actually cost to refurbish?

Approximately, £28,000.

I think we would have managed a little bit closer had we had more personal supervision down here,

but the problem is with coming so far

and when we get here we find people haven't done quite what we wanted and we have it done again.

£28,000 is not bad at all.

Added to their £194,000 purchase price,

that takes their total outlay to £222,000.

But what sort of returns might this beachside pad see?

What do two local estate agents think?

The property is absolutely beautiful. It's in a glorious position,

directly opposite the beach. They've done very well.

It's been very nicely presented. The accommodation is good.

There's nice features in the kitchen and I love the balcony

Sit there on a summer's evening, enjoy that view. Lovely.

Quite encouraging. But let's put some numbers on this house

on which they have so far spent £222,000.

You've got to look at a value in the region of £250,000,

although for marketing purposes, it would be worth trying in the region of £275,000 and be open to offers.

In the current market climate and the demand for this property, I would suggest £250,000-£275,000.

That's about what I expected. I'd have liked a little bit more, but I'm not unhappy about that.

We did discuss it the other day and we both asked what we thought. We both said 280.

So the valuations were slightly less than they had hoped.

Nevertheless, that's a potential pre-tax profit of £28,000-£53,000.

So although they currently have no plans to let it, does it have healthy rental potential?

On an unfurnished basis, you'd be looking at around about £850 per calendar month.

This property would rent for £850-£900 per calendar month.

-You happy with that?

-I am happy.

-All right. OK.

Rent of about £850 per calendar month would generate an annual yield of just over 4%

and should they decide at a later stage to let it as a holiday home,

the estate agents reckon they could get £400 per week in the high season.

But that's all in the future. What are they looking forward to now?

I'm looking forward to coming down here because I want to, not because I've got to.

-That's going to make a lot of difference. I'm very happy to come.

-If the weather improves!

It's not very good at the moment!

Hanley, Stoke-on-Trent, is a busy town, home to a museum, a theatre and a large shopping centre.

The lot I'm here to see is just a mile away from all that.

So what was on offer at the auction?

Well, let me just tell you the guide price first. £25,000.

Yep, 25. Not much for this -

an end of terrace, two bedrooms. In we go.

You know, in nearly 10 years of doing Homes Under The Hammer

and visiting probably hundreds of terraced houses, it never ceases to amaze me

what you find behind the door of some of them.

Ta-da!

We've got a real mix of styles here. '60s over there, a bit of '70s, '80s here.

A bit of Tudor here. More serious than the way it looks, something really strange is going on.

As you walk towards this corner, it definitely starts to... Goodness!

As you stand here and look back, the whole house is dropping down to this area. But it's a nice size.

I love the high ceilings. It feels nice and open

with these stairs being open plan like that. So that's good.

Em...but, yeah, that drop certainly concerns me.

Very classic layout, though. Come back to the rear and this really narrow kitchen area.

Nice feature arch into it. Loo, bathroom, at the back.

This bit really lets it down.

So, all in all...

Wow.

# We built this city

# We built this city on rock and roll... #

This house seems to have plenty of rock in it, but unfortunately some roll as well,

all of which needs to be sorted.

The decor is certainly eclectic and with a small bathroom beyond that narrow galley kitchen,

the layout's far from ideal. So it's only that relatively low guide price that's music to my ears.

Upstairs, there's a good sized double at the front with yet more rock, but less sign of roll.

Whereas the back bedroom... Oh, dear.

You know, you have to trust your first instincts when you go into a property.

Downstairs, that sloping floor is obviously a problem. Come up here to the rear bedroom and it's worse.

You've got a crack there and there, some major damp from the water coming in through the cracked walls.

And, again, this corner of the house is really suffering some major problems.

That's one thing that could explain the cheap price.

# Oh, the price you pay

# You can't walk away

# From the price you pay... #

Well, this might be a case of "you get what you pay for",

but even with some potential problems you do get a lot of house for your money.

There's a gated area at the side that leads to a back alleyway. As it's had a couple of extensions

to accommodate the kitchen and downstairs bathroom, there's no outside space to speak of.

So it's not really an ideal family house, but as a potential rental property it has its merits.

What does a local estate agent make of this "cracking" house?

The property requires general modernisation throughout - new kitchen, bathroom, windows.

There are some signs of structural movement which it would be advisable to investigate further.

Clearly there are some issues that need to be addressed, but what would be the best approach

-for this two-bed semi guided at £25,000.

-In the current market,

it's an excellent investment property for a landlord.

It will offer an excellent yield and that's the likely way to go.

If rental's the best approach, what kind of values are we looking at?

After renovation, I would suggest a rental figure in the region of £400 per calendar month.

And that's a decent rental value, particularly for a house that was guided at just £25,000.

-What about resale?

-I would anticipate a marketing price in the region of £50,000-£55,000.

Well, at first glance you might think, "Avoid this place like the plague."

However, it's all about the price you pay. If it's cheap enough,

you can build in the costs of having to put any problems right

and still end up with something that delivers an incredible yield.

Let's see who wasn't put off when it went under the hammer.

Lot 17. An end terraced house.

uPVC double glazing, two bedrooms, bathroom downstairs. Let's get it going at 12.

We really want to sell this. 12 bid. At £12,000. Looking for 15 now.

£15,000. Do you want to go ones?

16. Yeah.

17.

18? 18.

19. 20.

Right on the back. 21.

22?

22. Shaking his head. Still with you, sir.

£22,000. Another one anywhere else?

If not, £22,000 for the first time. Bid's seated right, no mistake.

£22,000 for the second time. Third and final time, then, at £22,000.

Are we all done? Well done.

So for £22,000 - £3,000 less than the guide price -

the successful bid was made by Wayne for his brother Stuart and sister-in-law Carmen.

They live in Shropshire and have run a car repair garage and done some holiday lettings in the past,

but this is their first venture into property development.

I met Carmen back at the two-bed end-of-terraced house to find out their plans.

-Carmen, great to meet you.

-And you.

-Tell me why you wanted to buy this place?

Well, we were looking for somewhere in the area and we viewed several properties.

Went along to the auction. This wasn't our top priority, but it came early on in the list

and it went for such a good price that we went for it and got it.

-What did you think about that price?

-Well, it was...yeah.

Everything else we were looking at was high 30s, really,

so it's got such a good margin and return on it. Hopefully, we can't go too far wrong with it.

So tell me more about you. What do you do?

-Been running a small village repair garage.

-Ah.

-And some holiday lets up in Shropshire.

-So what's tempted you here?

-Investment, really.

The price, what you can get, hopefully, in rental return for what you're outlaying.

'Carmen's brother-in-law Wayne already owns a few houses in the area, so they had some idea

'of potential rental returns and yields, which was the driving force behind buying in Hanley.

'But a decent investment doesn't just depend on the return you get.

'It also depends on how much you have to spend to get those returns and this one has a few problems.'

-Tell me what you think of the house.

-Yeah...!

Well, yeah, it's rather a mixture, isn't it, of cottage and dated

and '80s and '70s and everything thrown in together. It just needs some upgrading.

We've got a new boiler, bathroom, kitchen that we want to do, then some plastering and decor.

There does seem to be a sort of slope towards where I'm standing,

-towards this corner of the property. Are you aware of that?

-Not too much, no.

-I don't think anything's shown up.

-No subsidence or anything?

-No.

'So Carmen's not overly concerned with the structural issues

'as she's confident that husband Stuart and brother-in-law Wayne can sort them out.

'They hope to finish and have a tenant in place in just two months.'

So what's the budget for the work?

Probably around £4,000.

-Doing a lot of work yourself?

-Yes. Well, my husband and brother-in-law.

-So your total investment in this is going to be what?

-It'll be about...26, 27.

-For £27,000, you'll have a pretty up together house.

-Yeah.

-Generating what rental returns?

There are some as low as 325, but there are some up around 400.

So I think anything in-between that.

-But if you could get something towards 400, that would be £4,800 a year?

-Yeah.

-On a £27,000 investment!

-Yeah.

-That's a phenomenal yield, isn't it?

-Yeah, absolutely.

-Congratulations.

-Thank you.

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

-Lovely.

Well, you can't argue with the fact that Carmen got this place at a pretty incredible price

and she doesn't seem too fazed by the work needed to sort it out,

although £4,000 will not stretch to major structural work

and I have to say I think it needs it. So how will she get on? You can find out later in the show.

It's been many months now since we last saw those properties.

Do they look any different and has the time and money been well spent?

-I think we should go back and reveal all.

-Let's do that.

In Maida Vale, West London, a two-bedroom, lower ground floor flat

went to auction in what was described as "shell condition".

That's stripped right back to the walls to me and you.

To experienced property developer Chantana, none of this was particularly daunting.

It was just another renovation.

After buying it for £425,000, she was hoping it would be

the perfect opportunity for her son, Edward, to learn about project managing a development.

So, armed with a £25,000-£35,000 budget, it was going to be down to him.

And what's the timescale?

You know, she's given me a nice end of the year, essentially.

-So four or five months.

-Yeah.

-Great.

-You're not going to be cracking the whip too much?

-Not too much, but he's going on holiday in December,

-so he has to complete before his holiday!

-Otherwise he can't go?

-Exactly!

Well, 4-5 months may seem a reasonable amount of time, but there was an awful lot to do here.

With the hope of also converting the basement into a third bedroom,

Edward certainly had his work cut out to get his first renovation project ready to let.

Now a full 11 months have flown by and Edward's holiday has been and gone.

How is the flat looking?

Well, it's certainly less shell and more chic.

With a new, open-plan layout, this lower ground floor flat is anything but dark and dingy.

So how has Edward coped with his first-ever development project?

It has been a challenge. It has been a bit of a headache,

but, if I'm being honest, being here to see it now and seeing the photos of how it was before,

I'm very happy with the job.

Yes, it's certainly a big improvement with new plasterwork, flooring, central heating, electrics

and decoration.

The two-bedroom flat has been completely overhauled

And now that it's got a good-size family bathroom, it's nearly finished.

But not quite.

This is the last bit. We have to put in the double door, which is folded back.

It's made of glass, so they can get some light through in the kitchen.

Hopefully, it should be done within the next couple of days, then everything is finished.

So the kitchen area is just missing some doors, but the flat is missing one other thing -

the potential third bedroom in the cellar. Work on that is on hold.

But they have had the plans drawn up and a structural survey done, which contributed to the delay

in finishing the rest of the flat. So who's been the boss so far?

Well, my mum was very good, actually.

She left it mainly to me.

She completely handed the reins over to me

and I hope she's happy. You can ask her that.

He's done a lot of work. The credit has to be given to my son, Ed.

He put in a lot of effort and he's gone through a lot of good and bad points.

I had to keep holding his hand and, you know, telling him that he's doing a good job!

Well, Chantana may be happy with what has finally been achieved here,

but the time taken has significantly increased. Did the same happen with the £25,000-£35,000 budget?

The budget came out at £40,000 for building works

and probably another £10,000 for all the architects, structural engineer,

building regulator, building licence.

So £50,000 altogether.

A £50,000 spend on top of their £425,000 purchase price

will take their total outlay to £475,000,

to get this two-bedroom, lower ground floor flat ready for the market.

Have Edward's endeavours paid off? What do two local estate agents think?

They've done a very good job. The challenge with the lower level is creating light.

They've done that very well by opening up the kitchen, taking the wall down, bringing light through.

So, overall, not a bad job.

For a garden flat, nice and bright. The rooms are proportioned nicely - two double bedrooms, big bathroom.

Nice-sized kitchen for a breakfast table, breakfast bar. It's lovely.

This flat was always aimed at the rental market,

but have Chantana and Edward invested their £475,000 wisely?

I would put it on the market somewhere in the region of £550,000.

You should be looking to achieve in the region of £550,000.

Fantastic. Very happy with that.

That's very good. A potential pre-tax profit of £75,000.

Will the rental figures be as impressive?

For rentals, a monthly rent as a two-bed would be somewhere in the region of £2,000.

As a two-bedroom flat, you should be getting £1,800-£2,000 a month.

-Around about what we thought.

-That's right, yes.

-500 a week, yeah.

I could live with that.

Those kind of rental rates would see an annual yield of 4-5%.

Not spectacular, but OK.

And certainly as a long-term investment this should be fine.

So after this rather protracted development, will they do any more property projects?

I would, but might...take a break!

Not so soon!

I completely agree.

Yes, we would, but have a little breather first

and, you know, catch up on all the other work I've been putting on the sidelines.

In the Hanley area of Stoke-on-Trent, I came across

an end of terrace that was bought for an astonishing £22,000. That's £3,000 under the guide price?

From the outside it seems too good to be true, but the cracking interior seems to suggest

it might not be a bargain after all.

Along with tilted floors, boarded-up windows

and an eclectic mix of decades in the decor, this property was needing a little bit of attention.

Despite all this, the property was bought by Shropshire-based husband and wife Carmen and Stuart,

thanks to a winning bid by Stuart's brother, Wayne.

Carmen and her husband Stuart have run a garage and have some holiday lets.

The plan was that Stuart and Wayne would do the work while Carmen project managed.

-What do you think about that price?

-Well, it's got such a good margin and return.

Hopefully, we can't go too far wrong.

And with the property aimed at the rental market, the figures seemed to add up.

But with a proposed £4,000 budget and hopes to have it finished in just two months,

this was going to be quite a challenge. Now just under three months later, we're back

with Carmen's brother-in-law Wayne, to see how they got on.

Well, it looks like the answer is...

..pretty well. Not only has the patchwork of design styles all been brought up to date,

but this is clearly now not just a house, it's a home.

A tenant has moved in to this replastered, redecorated, centrally-heated property

with a completely revamped kitchen.

The kitchen, as you can see, we fitted it quite well.

It was a second-hand one we bought on the internet.

We sourced new worktops and the boiler is in the corner,

which we sourced second-hand again on the internet, but it was new.

The lino we bought as a job lot. And, believe it or not, the actual leg here

we found in a local skip, which finishes it off quite well.

All in all, it looks quite well.

It still leads to a downstairs bathroom, but, boy, is it much improved!

Upstairs, the large front bedroom is now bright and modern.

While the back bedroom is looking in a pretty fit state without a crack or a sign of damp in sight.

Upstairs, all the floorboards we ripped up. They were rotten.

Then we kind of tried to level it out as good as we could, put new floorboards down.

The crack, we just got it back to bare bricks and rebuilt that area,

and it looks better than it was before.

It's over a 100-year-old house so we'd expect it to be a little bit not totally square.

That sloping floor downstairs was resolved by laying a concrete base.

As you can see, we've replaced the windows. Double-glazed windows in the kitchen and bathroom.

And also put a new back door on. We didn't replace the actual window, just the double-glazing units.

I think they've done a remarkable job here.

Wayne and his brother Stuart just worked at weekends and stayed over,

but why has Wayne put so much time and effort into a property that isn't even his?

The idea behind it is I helped him free of charge and next property he'll help me free of charge.

That sounds like a great way of working. It's paid dividends for Carmen and Stuart.

They've not only got a fully renovated house, but also a tenant.

We sourced a tenant through the local paper. We had a few and just got the best one out of the bunch.

It worked out at £395 rent per month. Hopefully, the tenant stays a long time

and we don't get redecoration fees!

£395 a month seems like a healthy rent and a potential long-term tenant is a bonus.

But how much did it cost to get this two-bed, end-of-terrace house up to scratch?

The original budget would have been £4,000.

And we spent just under £5,000.

So a £5,000 spend on top of their £22,000 purchase price

will take Carmen and Stuart's total outlay to a remarkable £27,000 without costs and fees.

But is it really as good value as it sounds?

What do two local estate agents make of their investment?

It's obviously been refurbished. An excellent property for renting.

It's certainly been improved. New kitchen, new bathroom, rewire.

It's a lot fresher than when I saw it and it's ready to live in.

This was clearly done as a rental property, but what sort of return could they get

if they sold their £27,000 investment?

I would anticipate a resale value in the region of £50,000.

I'd put it on the market for £45,000.

Absolutely fantastic. Really good for what we spent on it. That's a great return.

That's a potential pre-tax profit of £18,000-£23,000.

But it's the rental yield that was likely to be the most impressive.

So is their current rental income of £395 per calendar month

as healthy a return as they could get?

Rental income I'd anticipate in the region of £400 per calendar month.

I'd rent this for £350 per month.

So with £395 per calendar month being at the higher end of those rental values,

it sounds like they are getting the best rental return and the yield that delivers?

It's a whopping 16%.

That means the house could pay for itself in under six years.

So I think we should call this a success, shouldn't we, Wayne?

It's been different. It's been hard, highs and lows, but great fun.

And spending time with my brother has been great over the last 12 weeks. We'll be doing it again.

We hope you've enjoyed watching and perhaps learned some lessons.

-Make sure you join us next time.

-We'll see you then.

-Goodbye.

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