Episode 39 Homes Under the Hammer

Hello. In tough economic times,

it can be even harder to part with your hard-earned cash.

even when it comes to buying property which used to be considered "as safe as houses"!

Yes, it can be daunting at the best of times.

But even more so now.

Yes. But if you do your research and take a deep breath,

you can still find a bargain buying your home under the hammer.

One person's trash is another person's treasure, as they say,

and that's certainly true of some of the properties at the auctions.

Sometimes, it takes a bit of imagination to see the potential that lies beneath the dodgy decor.

So here are the treasure trove of properties that we've unearthed for you today.

In Basildon, Essex, there's a terraced house that might just grow on you.

There's nothing like letting your garden come in to you!

Whereas in Forfar, I see a lot that's a long way from perfection.

I'm not sure I like the location, but let's take a look.

And I saddle up my horse and ride in to good old Derby City

to check out this little old homestead.

Great place for a hoe-down and a barbecue!

All these properties have been sold at auction.

We'll find out who bought them and what they paid for them

when they went under the hammer.

Welcome to Basildon in Essex,

created as a new town to accommodate the overspill of Londoners after the Second World War.

Nowadays, over £1 billion of regeneration is planned here.

It's also the birthplace of Denise van Outen, Alison Moyer

and Carry On legend Joan Sims.

Ooh, matron!

Already I'm excited about the property I'm here to see.

Why? Because I'm only a ten-minute walk to the town centre.

So, gold star for the location,

but the parking situation is a bit tricky

as it's pedestrian access only to the front door.

And that will always put some buyers off.

Now, the house itself is here.

It's got three bedrooms and had a guide price of £100,000.

I'll have a look around.

'Cut back the conifers, tidy up the garden

'and you have a mid-terraced house as smart as its neighbours

'looking out onto a safe space for the kids to play.'

Ooh, good. I'm glad you walk into a hallway rather than straight into your lounge.

Not so sure about the plastic wood-effect panelling on the wall.

As you can see, this house does need a tremendous amount of updating.

Bringing back to the 21st century.

But the basics are here

which is really good news.

Two big windows, a very sunny space, which is great.

Don't know about the artexing.

We might have to think about getting rid of that

along with this fireplace.

I think something a lot more modern would work.

You can see we don't have gas central heating in this house.

Just storage heaters.

So you'll probably want to upgrade that.

This wall has obviously been taken out

so you've got this very nice open plan area.

Now, you've got a couple of options.

You could, in the kitchen, think about potentially taking this wall down

and then you'd have a nice big kitchen/dining space

and you could then reinstate this wall here

and have a little cosy lounge area.

So lots of options.

A lot to work with here. Needs some money spending on it,

but it does have a nice feeling. Let's have a look at the garden.

There's nothing like letting your garden come in to you!

Bit of a wilderness!

It's hard even to walk through this amount of overgrown weeds, debris

and shabby sheds.

Also, you may need to call in experts to evict some blackbirds

who've taken up residence in the roof.

At the end of the garden, you have this gate

which I am hoping will lead me out onto parking or a garage or something

to make up for the fact there's none out the front.

No, you don't. You have this alleyway

which, after a while,

eventually...

..sort of, nearly,

but not quite yet...

Ah, here we go.

It ends in a parking area.

Now, this is a sticking point for me.

Imagine, it's the winter, you've done your weekly shop,

the kids are hanging off you wanting their dinner, it's dark, it's raining,

this access is going to be a pain.

And quite frankly,

I wouldn't want to do it.

It's definitely a disadvantage.

While not everybody has a car,

even getting your shopping delivered might not be easy.

Back to the property itself.

Could things start looking up upstairs?

Upstairs, there is a real eclectic mix of wallpapers, carpets.

It certainly is a bit jazzy up here, but I love it.

Because for starters, you could knock these two together

to have a really spacious bathroom,

you've got a nice landing, again, another bonus.

Double bedroom there, a little single there

and a really nice master bedroom here.

There's enough room to get your king size bed in here if you want,

little cabinets either side.

It really is a great space up here.

But one of the positives about not being able to drive your car right up to your property is this.

Listen.

SILENCE

How peaceful is that?

You can't hear anything.

So you definitely know you're guaranteed a good night's sleep.

Result!

While there might be a welcome sound of silence,

the carpet designs seem rather loud!

The house has a lovely feel,

but it's really dated

so there's a lot of work to be done.

What does a local estate agent think of the mid-terraced house,

guided at 100,000?

To bring the property up to scratch,

you're going to need to spend in the region of ten to 15,000.

A lot of that will be spent on installing gas central heating

and updating some of the windows to double-glazing

and a light refurb throughout the property.

If that money was spent and the property brought up to a modern spec,

what could it fetch on the resale market?

Once renovated, this property could re-sell for in the region of 130 to £135,000.

What would he predict for rental?

I would anticipate the property renting for in the region of £750 to £800 per calendar month.

I think you could do worse than buy in Basildon right now.

Get a slice of the Essex action before the regeneration kicks in

and you could be getting a really good deal.

Let's see who went for it at the auction.

A three-bed mid-terraced house. Must be worth 100.

100 anywhere? 100,000.

105 with you.

110, sir?

Looking for 110. Anywhere else?

I'll take 106, if it helps.

106 with you, sir.

107.

108.

109.

110.

111.

112.

113.

114. 115.

116.

117.

118?

117. First time, second time.

Third and last time, if you're all done?

Sold. 117.

The hammer fell on a bid of 117,000 made by Ray,

who was at the auction with his wife, Jane.

She's a teacher, and may not have done the bidding,

but will be completely in charge of this renovation.

-Jane, congratulations.

-Thank you.

-You must be really excited.

-Excited and nervous at the same time.

-Yes.

-What are you nervous about?

-Taking on a project like this on my own.

It's just nerve-wracking, being a woman and I'll be directing builders and things like that.

-You can do it!

-I can walk in a classroom and take command.

That's not a problem. But walking in here and bossing people around, we'll see!

Is this your first project? Have you ever done anything like this before?

I haven't done anything like this before.

We've just started on our own home

and I've been tentatively project managing that, with the support of my husband.

But he's told me this is mine.

So you're going to have that and this going on at the same time?

As well as teaching one day a week.

-Crazy! Are you going to cope?

-I'll manage. I will!

'You certainly can't knock her "can do" attitude.

She's going to be kept busy and learn to keep the workmen in line!

She's already sorted on that front

as she's assembled her team of builders.

She's a Basildon girl, born and bred,

so knows the area well.

Jane and her husband Ray have already agreed that this will be a rental property.

But when it comes to the budget...

-Mine's 10,000.

-OK.

-My husband's is six.

He said, "Don't go above six",

but the bathroom, the toilet, they all need replacing

and this will all get ripped out. I can do a lot of that myself.

Doing a project on my own home, I've been ripping out walls

so I can do that myself, hopefully.

OK. And upstairs, you've got a really nice separate loo,

bathroom, but it could be a fabulous much bigger bathroom with the toilet in the same space.

Yes, we thought about that, but thinking about it, if we're doing it as a rental,

it might not be a family. It might be two or three people renting together.

To keep the bathroom and toilet separate is more of a seller.

Jane's planning to get experts in to replace the storage heating and the windows,

while she'll use the DIY skills she learned from renovating her own home.

She's done the maths, and is keeping the downstairs layout as it is.

So she's done her homework - just what you'd expect from a teacher!

But is everything here completely rosy?

Any big downsides to this property, that you can see?

The garden!

-Whoa! You open the back door and it's there!

-Yeah.

So that will take quite a lot.

We've talked about that. It's a beautiful garden. Once you take that all back, it'll be lovely.

But again, the rental side, people might not do the upkeep of that.

So we've talked about taking that right back

and maybe keeping just one or two nice plants that are in there.

-So are we going to come back and see top of the class? Will we be giving you a gold star for this?

-Yes!

So if I was to ask you teaching the kids or property developing?

Ask me in ten weeks' time!

What do you think you're going to say?

Teaching is my first love. It is my first love and I do miss it.

So, it just... If the builders behave,

then I might get into doing the teaching side of the builders!

So ask me in ten weeks' time when we've finished!

I can't wait to see how you do this and what you do.

-Good luck with this renovation. Lovely to meet you.

-Thank you.

Once a teacher, now a property developer.

This is a great rental machine for Jane

but there will definitely be challenges for her to overcome.

Will her hard work deserve an A star or an F?

Join me later in the show to find out!

Today, I'm on the east coast of Scotland

just 15 miles from Dundee and 50 from Aberdeen

in the former royal borough of Forfar.

Forfar just oozes history.

It was once the centre of the Kingdom of the Picts,

the region's first settlers.

But now the buildings pay homage to its more recent thriving textile industry

and a rich agricultural heritage

that's still as strong as ever.

When I was a kid, I always used to watch the football results

and I always used to hope that it end up with the result

that was Forfar, five, and Fife, four!

I'm not sure it ever happened!

Ah, well, small things!

This is the main town in Angus and holds all the county municipal buildings,

featuring some stunning architecture.

Down this corridor, though, is the property I'm here to see.

It's a former salon and sort of beauty parlour,

right underneath one of the hotels in the centre of town.

Had a guide price of £32,000.

I'm not sure I like the location, but let's take a look.

The position of this property is hair-raising, and not in a good way.

It's a bit on the dark side.

But on the plus side, there is parking

and there's access from the main street.

The salon is underneath a hotel

which has been closed for some time.

It's certainly an intriguing location,

but apparently, in its day,

it was a very popular hairdresser's.

And I don't think it's changed much in quite a few years.

One big space, primarily.

You've got your own shower built in there, not necessarily what you'd expect.

But this very interesting roof line

with the arch there.

Then some of the original hairdressing paraphernalia.

Place for hair to be washed, these things for drying.

Even though, well...

What would you do with this place? I really don't know.

It's going to take some imagination to figure that one out.

So, an unusual lot, and a rather compact one.

Not much more than a single room, a shower, toilet and some parking space.

We asked an estate agent what he imagined it could be used for.

Options for this property would be hairdressing, beauty salon,

possibly office accommodation as well.

This is obviously always going to be a business of some sort.

But its location doesn't exactly offer visibility on the high street,

so what disadvantages are there to watch out for?

Hard to market yourself

and also you wouldn't have control of the fabric

as it's underneath a hotel which is closed.

That is a good point.

Who would look after the building? And how are the costs shared?

What would happen if the building fell into disrepair?

That all needs to be looked into,

and I really want to work out what kind of business could do well in such an awkward spot?

Could it possibly be a wise investment?

What could it let for?

The rateable value for this property is 5,400 per annum.

It is due a discount from the local council due to its off-street location

and the fact it has no window frontage onto the main street.

And, if renovated, what could it sell for?

Once renovated, the property's worth in the region of £45,000.

So, a bit of an unusual one, this one.

It is going to require a lot of imagination.

But for that £32,000 guide price,

it could just be worth a punt.

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

This is a former hair and beauty salon.

What are we going to say for this? Vacant possession.

25 to get me started?

25,000. Thank you, sir. Sitting down.

25. Have I got 26, anywhere?

26 at the back. 26. 27.

28. 29.

30? 29 and a half?

29 and a half. 30? 30.

30 and a half? You're out?

Right. At £30,000. Are you definitely out?

£30,000. Gentleman sitting on the aisle.

Any other bids? Looking for 30,500.

We'll sell at 30,000. Going once,

twice, third and final time.

Gentleman sitting on the aisle.

So, for £30,000,

the successful bidder for the former salon in Forfar

was local man Alan.

He's the managing director of a roof truss company,

but has recently diversified into other business ventures.

The first of these was buying a local bar,

and now he can add this underground business premises to his portfolio.

-Alan, congratulations!

-Thank you.

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

I'm going to turn it into a barber's shop.

Right. There are other buildings possibly in Forfar,

-that would be less problematic than this one.

-Yes.

This is fairly iconic.

Round about the early '80s,

I came in here and this was really happening for a small place like Forfar.

This was a hub of hairdressing!

Unfortunately, nothing's changed in here since then.

-Good.

-And it certainly struck a chord with me.

And I think that that memory, it's quite quirky being up the close

and the shape of it, the roof. Everything's quite quirky about it.

I think if we add the class and the quality of the fittings,

to that, and the right staff, we'll have a winner.

'A-ha, so a little nostalgia playing a part here for Alan.

'But I don't think this is a "heart over hair" decision.

'He's got a clear plan for how he wants to revive this place

'and make it as good, if not better, than it was in its heyday.

'Or should that be "hair-day"?!'

So tell me exactly what you're going to do to it.

The first thing we'll do is lay the reclaimed flooring.

It's Canadian white oak.

-Canadian white oak?!

-Yeah.

-It was lifted from Clydebank High School when the gym hall was demolished.

-Ah!

We've bought that. Then we'll go looking to source pieces such as the actual barbers' chairs.

Right. New or second-hand?

-No, I want the authentic old ones.

-Really, really old ones?

-Really, really old ones, yes.

-The vinyl or leather...

-The leather and chrome. The real old ones, yeah.

This back wall here, I think we'll probably decorate

with some punk records or punk posters and paraphernalia.

And how many stations, as in where people can sit and have their hair cut?

We're planning on three men's ones and one child one.

What about somebody who can cut hair?

Yeah, we need to find that!

We need to find staff, yes.

But we're at the start of the project, so I don't think we'll have any problem.

Will the idea be that you rent it out to somebody,

or just employ a hairdresser?

No, we'll find a manager, a real ganger. Someone that'll come in and operate the place.

We'll incentivise them and leave them to run it.

'With his main business being a roofing firm,

'Alan hopes that, like his other business venture, the bar,

'he can set the hairdressing salon up in such a way

'that it runs itself.

'Once he's made and paid for the changes, that is.'

What's the budget for sorting it out?

The bar started off and we sailed to almost double budget

-within a few months.

-You doubled the budget?

-What was the original budget?

-At the bar, the original budget was 50,000.

-50. And you spent 100?!

-Yes.

I just got carried away!

So again, the budget for here I probably would have started at 20,000,

but I'm going to be sensible and go for 40,000.

-So do you think you might spend 80?

-No!

Definitely not, no!

-I'm reasonably confident.

-You can do it for 40.

-And what timescale?

-I'll start in about two months' time

and take approximately 12 to 15 weeks to do it, start to finish.

-Right. It'll be open for business.

-Open for business, yes.

-Is there much money in hairdressing?

-I don't know.

What do you mean?! Now, look, no, no, no!

That's the wrong answer!

-What do you mean you don't know?!

-I genuinely...

-It's a business!

-Yeah.

You go to all this trouble and you don't know whether or not it can make you money?!

No. But I'm confident it will.

I did a business plan.

I have no experience of hairdressing.

Conversely, I had no experience of the bar industry or the bar trade.

But I was able to take some guesses and I look to have been reasonably successful.

Well, there's enough successful hairdressers around. There must be money in it.

So what's the next step? What are you going to turn your mind to next?

I've no idea. I'm sure the opportunity will present itself.

-Restaurant, perhaps?

-It's possible, yes. Definitely possible.

But this was a complete curve ball, so it could be anything!

-It could be anything, yes.

-Alan, I really admire what you're trying to achieve here.

-Good luck.

-No problem.

-I look forward to seeing how you get on.

Well, there you go. Fantastic story.

Alan with some incredible plans for rejuvenating the salon.

You can find out how he gets on later in the show.

'Coming up, this house in Derby seems...'

A pretty good blank canvas on which to practise your art of being a property investor.

'Back in Forfar, we find out if Alan's business is a cut above the rest.'

It's a very bespoke project, a very bespoke product.

But first, in Basildon, Essex,

has Jane done all her homework?

Throughout this whole renovation, I've laboured on every trade.

Back to Basildon, where earlier, I met primary teacher and aspiring property developer Jane.

She and her husband Ray purchased this three-bed mid-terrace house at an auction

for 117,000.

It was going to be Jane's to project manage

once they'd decided a budget.

-Mine's 10,000.

-OK.

-My husband's is six.

He said, "Don't go above six", but the bathroom, the toilet, all need replacing.

This will all get ripped out. I can do a lot of that myself.

Doing a project on my own home, I've been ripping out walls. So I can do that myself.

Hopefully!

And here's also hoping

that they managed to decide before Jane got cracking.

More set in stone was the timescale, which was ten weeks.

So guess what? We're back, ten weeks to the day since I first met Jane

to see how she'd tackled this shabby place

with overgrown gardens front and back.

Unbelievable as it may seem,

this is the same garden we saw just ten weeks ago.

And the front's been transformed, too, as Jane explains.

We completely cleared the whole of outside to begin with

because we had big tall conifers that closed the house in, made it very dark.

We had the sleepers put in and pea shingle to fill

so that whoever decides to rent

can put their pots on to put colour if they want,

otherwise it's low maintenance.

The turf I did myself. I'm very proud of it.

The groundworkers showed me how to do it in the back garden,

and I decided to attempt it myself in the front.

I'm very pleased with myself.

And so she should be.

This looks so much more welcoming than before.

I think property renovation is a lot more fun when you learn new skills

and you get your hands dirty.

So, has it been more of the same on the inside?

Not a single room has remained untouched.

And Jane's made a drab and dated interior bright, light and fresh.

But how involved was she with the work done here?

I've been more than hands on throughout this whole renovation.

I've laboured on every trade.

I've helped the window fitter,

I helped the scaffolders,

I didn't get to help the electrician, but I was part of the planning

for where sockets would go and the different alarms that we would need to have.

He was really helpful for the regulations that we needed to stick to.

So, yes, lots of labouring.

But for Jane, this was also a labour of love

as her first step into property renovation.

And it sounds like her previous fears of managing the workmen

have been laid to rest.

Controlling and managing the builders wasn't as hard as I thought it would be.

It was more understanding a lot of what they were talking about

and understanding the technical terms that they use.

I quite enjoyed going into school one day a week

so I understood what the adults were talking about

because this just wasn't my world.

But I got there in the end. I've learned to write everything down.

Everything that they said I wrote down

so that if there were any discrepancies,

and I didn't understand, I could walk into a shop and say, "That's what my builder's asked for."

So, yeah, it was OK.

So this primary teacher has learned lots of new lessons.

But did she stick to her timetable

and how was she with her arithmetic?

Our timescale, there was my husband, Ray, wanted me to get it done in six weeks.

I said that was ridiculous. I said ten weeks.

And we came up around nine weeks.

I think this is the tenth week now and it's finished, so...

We kept to our timescale.

Our budget, we just worked it out yesterday,

and that comes to about 12 and a half.

12,500. So we did go over budget,

but I think there's a lot that we've bought, a lot of tools and resources

that we've bought and will work on our next project.

So although we did go over budget, some things we can re-use again.

Well, a little over is nothing to be ashamed of.

Always bear in mind that you often spend more on your first project.

Like Jane, you may spend more, but ideally on things you'll use over and over again.

Gold star!

We still intend to rent. It would be nice to know how much it would go for a re-sale

if we decided to sell it.

But we've now got tenants and we're in the middle of sorting out a tenancy agreement.

So it's rented!

So more good news!

They've already got tenants in the offing.

Jane won't need to wait very long

to find out how much the property could sell for,

as we've asked two local experts to take a look around.

I'm very impressed with the refurbishment of the property.

I particularly like the front and rear gardens.

They're much improved from the first visit.

Also, we particularly like the kitchen and bathroom.

Having looked round the property, it views very well.

It's very well presented throughout

and has been finished to a good standard.

Top marks so far, then. But what about those finances?

The purchase price was 117,000.

Added to the £12,500 spend on the work,

that's a total outlay of £129,500.

Could Jane make a profit if she were to consider selling?

With regard to the resale value of this property,

we believe it would sell in the current market at £140,000

to £145,000.

The property resale, I believe to be between 145 and £150,000.

I'm pleased. Yeah, that is good.

We thought round about 140 to 145.

Obviously any more would be a bonus.

So yeah, that's good. Yeah. But I'm not selling!

Nope. Despite a potential pre-tax profit of 10,500 to £20,500,

Jane is planning on letting

and already has her tenants lined up.

What could she charge per calendar month?

We believe that this property would rent for approximately £825 per calendar month

to £850 per calendar month, based on recent rentals in this area.

This property could rent for £875 per calendar month.

That's good. Yeah. Yeah.

We have already got tenants lined up for 850.

So that's in the middle. I'm pleased with that. That's good.

A rental income of £850 per calendar month would mean an annual rental yield above seven per cent.

I'd say this project has certainly been a success for Jane.

But the big question still remains,

would she give up teaching for property developing?

I think I would still carry on with the teaching.

Property development now has to be my main thing. It's my main income.

But I would still keep my hand in with teaching.

Welcome to Wilmorton in Derby,

a well-established suburb 15 minutes walk from the city centre

and close to Pride Park, home to Derby County Football Club.

Like many places, the property market in Wilmorton has been a bit sticky in recent times.

So there are bargains to be had

if you're an investor or maybe a first time buyer looking for a home.

Here's a perfect example.

Two-bedroomed terrace. Had a guide price of £60,000-plus.

Let's take a look.

So, is this classic Derby terraced property design type A,

or classic Derby terraced property design type B?

Well, let's see!

Straight off the pavement into the lounge.

A fireplace which has largely been left.

You could open that up and create a bit of a feature in here.

The floorboards, some a bit creaky,

but they would be nice stripped back.

It is a fairly standard design.

A nice additional bonus is a cellar down there, which is good.

Into your rear sitting room area. It's a two-up, two-down, which has been extended.

Through the back here into your kitchen.

Probably built as some kind of extension at some stage over the years.

It's a bit tight. It's a bit - rattle, rattle - clearly in need of some renovation.

But the good news is, there isn't a toilet down here

so it is classic Derby terraced property design type B.

Good news! The toilet's upstairs!

So, the property may not be full of surprises,

but that cellar downstairs is a bonus for additional storage.

So, so far, so good! Onwards and upwards.

This property might not set your pulse racing

or score particularly highly on an excitement scale of one to ten,

but it has a lot going for it,

especially if you're starting out in your property developing career.

Cos you pretty much know what you're getting.

That "type B", as I said, good news,

there's a bathroom there at the end. That's definitely nice to have.

Your first bedroom there and through to the front of the property where your second bedroom is.

As I said, you kind of know what you're dealing with here.

I think for a first-timer, that's pretty good.

Your costs, hopefully, can be kept fairly low

and also when it comes to working out budgets,

there's a lot of comparables, so people will be able to give you realistic quotes.

So, all in all, there's very few uncertainties, which is nice to know.

In terms of the layout, you don't need to change anything.

A few damp issues underneath windows.

Don't worry about that, I think it's largely condensation.

All in all, it's a pretty good blank canvas

on which to practise your art of being a property investor.

Up here does need to be completely redecorated.

And I think a new bathroom suite would definitely be a good call.

With this being a fairly standard row of terraced properties,

the chances are that the neighbours have done similar refurbishments,

so you could get recommendations for reliable local tradesmen.

After all, the last thing you want to end up with is cowboys!

HORSES NEIGH IN DISTANCE

Ah!

No, I'm not staring out across the prairie lands at my herd.

I'm in the back yard.

And look at this fantastic construction that somebody's built.

HE CHUCKLES

I love it!

Actually, though, bizarre though it is,

a great place for a hoe-down and a barbecue!

It's actually quite a useful space!

Through here, it's a bit dark,

but again it's a useful sort of workshop area.

And quite seriously, a real bonus to the property,

out the back here, you've got your own parking space.

Good news, all round!

Oh, yeah, here at the OK Corral!

Well, if you do want to live saloon-style, this is perfect!

But I find it rather odd

that the back door was blocked up.

Then you've just got a few concrete slabs

and the dual-purpose wooden structure

taking up your whole back yard.

Perhaps I've just seen too many back gardens with grass in my time

and need to open my mind!

Let's ask a local property expert.

Does he reckon that this place, guided at 60,000,

could be a perfect home on the range?

My overall opinion of this property -

externally, it's in reasonably OK order.

Internally, it's in need of full refurbishment,

a new kitchen, bathroom, general decor, cosmetic improvement.

He thinks the timber structure out back should be given the heave-ho

but could the financial returns be gung-ho?

First up, if sold on.

I feel the resale value when refurbished

is likely to achieve in the region of £80,000.

How about rental? Could that be real good?

For the rental market,

I feel it's likely to achieve £425 per calendar month.

Well, no great surprises with this one, I don't think.

A great little opportunity for someone. Let's see who spotted it when it went under the hammer.

Lot six. A two-bedroomed terraced house, mostly double-glazed.

Gas centrally-heated.

Scope for a bit more upgrading and improvement.

Who's got 58 for it?

58,000 here, thank you.

At £58,000.

Starter's bid at 58. 59 I'm looking for.

At 58. 59 is bid.

60. 61.

62.

63.

64.

64,000.

65?

64,000 here. 65.

66.

500? 66,500.

67.

67,500.

68.

At 68,000.

500 elsewhere?

It's in the market. We're selling it, ladies and gentlemen. Bids are all yours.

At £68,000 for the first time.

Second time. Third opportunity.

All done? Sold here at 68,000.

Thank you.

That successful £68,000 bid was placed by a pair of familiar faces.

We last met husband and wife Alan and Kerry in 2010

when they purchased this terraced property

as their first foray into property renovation.

So, having done a refurbishment to a similar property once before,

they've come back for more.

Kerry, Alan, great to see you both again!

-Yes!

-Yes.

-We're back!

-Yes. Obviously went well, last time, then?

Yes, it seemed to go pretty well.

We made a bit of a profit off it and got rid of it in the end.

I think the one lesson we learned from that, that we'll bring to this one

was making the decision from early on are you going to sell it or rent it?

Because we tried to keep a boot in both camps...

-That was it, yeah.

-And it doesn't really work.

If you're going for rental, you need to do it to a different standard.

-So why this house?

-This is going to be an investment property definitely this time.

It's not going to be sold on.

This is strictly for an investment period.

We're close to the centre of Derby. Walking distance.

We're close to Pride Park, a walkable distance.

There's quite a few big name firms around here.

So we think it would be good for a professional to rent and walk to work.

Right. And what will you do differently?

You talk about, and I think it's a really good point,

of deciding early on whether it's going to be an investment property to rent

or something to sell on.

So what won't you do that you might have done if you were selling it?

The kitchen won't be the highest standard of kitchen.

Basically, it'll be sort of middle ground.

It won't be too expensive, but it also won't be the cheapest on the market.

We'll keep a tighter rein on the budget this time.

We think we've picked up the points that we know what to do on the property

-to save that money now.

-Right.

The last property was a massive learning curve as well.

I'm in the building game, but there's still stuff you can learn with a new property.

I think we got caught out as well by putting our own personal stamp on things.

Looking at something we liked and was to our taste.

We stripped the internal doors back

and put nice door furniture on, things like that.

That was all stuff you'd probably do to sell,

but it was more for our taste cos we like the Victorian features and that sort of thing.

They clearly learned many valuable lessons first time around.

So, armed with those, they're going to tackle this property with a fresh approach.

Alan's a plasterer and has plenty of friends in the trade

who he hopes to use and get at mates' rates.

So, is there anything else they took from their previous project?

How did you find the whole property renovation at the same time as doing a job?

Well, again, that's what's going to change this time.

Last time, it was a bit of an experiment, wasn't it?

-Yeah.

-We did it as sort of a hobby, and to see how we got on with it.

We both love property. We're interested in property.

But for me, personally, it was very tiring

to try and fit it into a full-time job.

-So this time, it's very much Alan's project.

-Yeah,

you've got the wheels in motion already.

I thought you were going to give some words of wisdom! Other than, "I'm having nothing to do with it."

No. I'd love to have something to do with it, cos I did enjoy it last time.

I like getting hands on, doing all the dirty stuff.

To be fair, you found this property, didn't you? Kerry found the property

-and researched the area, and I go in and do the dirty work, so to speak.

-Right.

You're having nothing to do with it, Kerry?

I'm sure I probably won't resist!

I'll have to poke my nose in at some point!

But no, unless I get a day where I'm really bored and nothing to do,

and I can't imagine that happening,

-but I'll probably come and...

-You can do a bit of painting.

Can I? Thanks(!)

So tell me what you're going to do to it.

Well, to begin with, stripping back the walls.

There's quite a bit of wallpaper that needs stripping off.

Maybe overboard a few of the ceilings and skim them.

Skim the walls, et cetera.

New kitchen, new bathroom. Doors, decorating.

-New flooring.

-Luckily it doesn't need any central heating.

-It's quite a new boiler.

-And maybe pull down the OK Corral that's out the back!

Oh, really?!

We don't want Clint Eastwood coming in the back door!

-It's bizarre, isn't it?

-It is, a bit, yes. A strange construction.

-But it's going, is it?

-It's going, yeah!

-Definitely.

-We'll put it on our house when I take it down.

-I don't think so!

So what is the budget, this time?

We're looking at about £10,000.

I'm thinking I can probably bring it in below that, this time.

But that should cover virtually anything.

Any mishaps, there's a bit in the kitty to sort it out.

Is that costing your time in, or are you doing your bit for free?

-No, that's costing my time in, as well.

-Right.

Yeah. I know it's a tight budget, but we've been through it a few times

and we can do it for that.

OK. And the timescale?

With work dictating when I can get on it,

-it's probably going to... I would say about two months.

-OK.

-Congratulations.

-Thank you.

-Thanks.

-Another one under the belt.

Well, not quite, but maybe in a few months we'll look forward to coming and seeing how you got on.

-Thank you.

-Hopefully! Thank you.

So, another project for Alan and Kerry.

And this time, they have made that very important decision early on,

is this going to be something for investment, which they'll keep and rent out,

or something they'll do up and sell on.

You do need to make that decision, as they have done.

It does influence what you do.

Big question, will Kerry manage to keep her hands off this one?

You can find out later in the show.

When it comes to property renovation,

you're never quite sure how it's going to go.

Peel off the wallpaper and the plaster may follow.

It's important to have time on your side and a contingency budget

because you never know how it's going to go.

With that in mind, how did today's plucky purchasers fare?

At the foot of the Angus hills and glens in the east of Scotland,

the town of Forfar was the location for a business premises

will little kerb appeal.

Actually, no kerb appeal at all

as it was off the high street, below a hotel and down a dark alleyway.

This former hairdressing salon's style had rather gone out of fashion.

But local businessman Alan, who not only runs a roof truss company

but also owns a local bar

thought this still had a future as a hairdresser's

and that, in fact, its location made it a cut above the rest.

-There are other buildings, possibly, in Forfar, that would be less problematic than this one.

-Yes.

This is fairly iconic. Round about the early '80s I came into it

and this was really happening for a small place like Forfar.

This was a hub of hairdressing.

Alan paid £30,000 at auction for the former salon.

He had a proposed £40,000 renovation budget

and a timescale of 12 to 15 weeks to carry out the work.

He planned to open it for business in six months' time.

He hoped not only to revive the salon's fortunes,

but to make it that "hub of hairdressing" once again.

Now, over two and a half years later, we're back.

It's often been said that you should never put your personal stamp

and your own thoughts and tastes into a project.

But in this case, I've completely ignored that advice!

Well, it's still a hair salon,

but its retro lines are now bang up to date.

Now leased out to some local ladies,

the salon has an appointment to open in two weeks' time.

The girls approached us. I think they initially expected a coat of paint

and maybe a couple of new chairs thrown in.

My wife did notice that all three of them were blonde-haired.

So they alighted on the name Blondies

and from there on it was a natural progression in the Parallel Lines theme which you see before you.

When you visited here last time,

this was all one big open room.

When the girls came to view the premises,

I didn't realise that one was a beauty therapist,

and that she actually needed a separate room.

I didn't want to close the place off or create a closed-in feeling,

so we decided to make a folding partition door like this here

which allows the door to move and the room to open up when not in use.

Or to be closed for full privacy when it is in use.

We lined the partition up with the line of the ceiling

and it works perfectly well.

Nice simple lines.

So, a neat solution to utilise the space.

And although the restyling did take only 12 weeks as planned,

this project has been delayed by over two years.

So what happened?

I was originally going to develop the salon in the same vein and same theme

as my bar across the road.

But by which time we'd received an offer for the business

and I was going to sell the salon.

Unfortunately, that fell through.

So, a frustrating time for Alan.

But at least there's light at the end of the tunnel

with new electrics and water pipes and plenty of parking.

At last the hairdressers can find out if they can cut it in today's competitive market.

But what has it cost Alan to get to this stage finally?

Usually, when you set a budget, I think if I double it is usually where I end up.

Unfortunately!

In this case, we budgeted 20 but I expected to spend 40,000.

But we came in at a very respectable 25,000.

When you consider there was £5,000 of specialist hairdressing equipment

and almost £5,000 on new electric and water supplies,

I think we've been very, very good.

A £25,000 spend on top of his £30,000 purchase price

means that Alan's total outlay here will be £55,000 before tax and expenses.

But has his black-and-white approach been along the right financial lines?

We booked in two local estate agents for an opinion.

The property has been finished to a high standard

and now has an added wow factor

which will definitely appeal to potential purchasers

and tenants alike.

I think he's done a very tasteful job.

He's obviously spent a bit of time and money

thinking about how he would refurbish it for the tenancy.

I particularly like the decor, the barrel-vaulted ceiling

and the creation of the therapist's room.

Business premises are usually valued in terms of the revenue they can generate.

So, with his £55,000 outlay, would Alan see any return if he sold this on?

If I was putting this property on the market today,

I would put it on the market at offers over £45,000

looking to achieve between 45 and £48,000.

As things stand, I'd market this property at £45,000.

I suppose that's a reflection of the current market at the moment.

But it was never bought as a sale property. It was bought as an investment to generate wealth.

Yes, and with the hotel above the salon still being closed,

that does affect its current value.

But as Alan says,

this was always a long-term investment

so the rental revenue is more relevant.

The commercial rental value of this property will be £6,600 per annum.

Given the very good standard of finish,

I would market this property at £500 per calendar month

which is £6,000 per annum.

I don't know what to make of that, really!

I'm receiving considerably in excess of that.

Although it's a very bespoke project, a very bespoke product.

So I think mainstream valuations really have no bearing on it.

Even valuations of £500 per calendar month would see an annual rental yield of nearly 11 per cent.

So, despite the delays and Alan's personal design vision which may not appeal to everyone,

it seems that, one way or another,

healthy rental income is the end result.

So what next?

I'm really looking forward to opening this, in under two weeks now.

I'm looking forward to the opening night.

Let's see some life coming through here again

and I've no doubt an opportunity will present itself!

And then it'll be onto the next episode.

We're back in Wilmorton in Derby

to catch up with Hammer alumni, Kerry and Alan.

They purchased this property, a classic two-bed terrace,

in much need of modernisation

and sporting a quirky barn-type building at the back

for £68,000.

Last time they were on the show, they did the house up together.

But this time, it was going to be Alan taking on the work.

Supposedly!

And you're going to have nothing to do with it, Kerry?

I'm sure I probably won't resist!

I'll have to poke my nose in at some point!

But, no, unless I get a day where I'm really bored and I've got nothing to do,

and I can't imagine that happening.

-I'll probably...

-You can do a bit of painting.

-Can I? Thank you(!)

The couple had set a tight timescale of eight weeks.

We're back now, a mere six weeks after our first visit,

to see if Kerry did manage to stay hands off

and if Alan has taken this tired terrace and turned it around.

Every room has been replastered, repainted, rewired,

re-carpeted and revived.

Nowhere more so than the kitchen.

You can see that the kitchen has changed quite a lot.

The original kitchen was a bit dated

and we decided to change it and rip it out.

We were going to go for something simple like a cream colour,

but Alan chose this colour and we think it contrasts nicely with the white walls.

Nice spotlights in the ceiling, new flooring and a completely new kitchen.

The oven, hob and extractor.

I think it's turned out really, really well.

I'm really happy with the colour, and I think it was an excellent choice.

From the sound of it, Kerry did leave the decisions to Alan.

But did she manage to stay away from the work completely?

I've managed to stick to it, haven't I?

I've done, I think, three days in total. I did a day in the garden,

one day's painting, and then the big clean-up at the end.

That's it, really. Alan's worked really hard and spent a lot of hours at the house.

But I've taken a real back seat this time.

From the back seat to the back yard,

where there's been a showdown between the bar-style timbered workshop

and good old-fashioned grass.

And it looks like the grass has won!

As you can see, a lot has changed out here.

We had the OK Corral, which was here.

And a shed-type thing here.

So once we started, we decided to get rid of it.

It blocked all the light out of the house.

Caused a bit of gunfire when we decided to take it down!

Well, it felt like gunfire with the amount of blood it produced!

We took it down and the fence here on the left came down with it.

And the rear fence came down, so we had to replace everything.

We decided to put a bit of turf down to give it some greenery,

a few plants and flowers and some shingle here and there.

A bit of a patio area here so you can have food, et cetera.

Also, we've rendered the rear of the property.

We think it looks fantastic, now.

The whole property does look a lot better.

But it took removals, re-turfing

and re-rendering, and that was just the outside.

Although Alan, a plasterer, did the lion's share of the work himself,

only bringing in experts for jobs like the electrics,

did they really manage to keep below their projected £10,000 budget?

Well, I'd like to say we stuck to the budget,

but we managed to go about £2,000 over budget.

But we didn't take into account the fencing outside,

and we needed a couple of skips. We didn't realise we'd need a couple of skips doing the back garden.

And all the sundries add up to a massive amount.

You don't give account to the amount of sundries, such as paint. We can account for the overspends.

-We put a high spec kitchen in, as well.

-We did spend extra on the kitchen,

but that was because we found a tenant quite quickly

and he's a friend of the family and he's looking for a long-term rent

so we thought we'd go slightly higher spec on the kitchen,

-just to keep the tenant happy.

-Yeah.

Well, that answers my next question.

One thing they were certain of was that they wanted to let this property.

So it's good to hear they've got a tenant lined up already

and that they've learned even more this time around.

The top tip to glean from them is,

always make sure you factor all those little added extras into your budget.

Because they sure can add up.

Whilst they may have gone a bit over on the spend,

they were under on the timescale.

Yeah, we managed to do fairly long hours here

and a lot of Saturdays and Sundays.

But we think it's worth it. If you've got a target,

it helps in some respects that you've got a target to keep.

Your tenants already ready to go, they'd given notice on their property so wanted to get in.

So we've done it with a few days to spare, which I'm glad about. So, yeah.

So, well done, Alan. That deserves a big pat on the back.

Between the purchase price of 68,000

and the work coming to around 12,000,

the total outlay is £80,000.

We asked two local property experts round, including the one who viewed it a few weeks ago.

I think they've done a remarkable renovation in a short period of time,

particularly what I like in the garden where there was a dilapidated shed.

The look and the finish is good.

The first thing you see is the fact that it's been replastered.

And they've picked some nice colours, as well,

not just washed it out in white or magnolia.

So it looks nice. Yeah.

The estate agents thought that, if sold, the property would get between 80 and 85,000.

So, not much profit here.

But having already lined up a tenant,

are they earning a competitive rental rate?

If I was to place this on the open market for rental purposes,

I would suggest an initial figure of £425 per calendar month.

If we were to see this property on the market for rent,

we'd be looking at getting around £450 per calendar month.

-Oh, that's OK, cos we've got 450 for it.

-450, so...

-Happy with that.

-Spot on.

-Hunky dory.

A yield of just below seven per cent is hunky dory indeed.

What next for this pair? Could it be lucky number three for redevelopment?

Next, we'll have a bit of a holiday. I haven't relaxed for six months!

Pick ourselves up and start again and do another one, maybe.

That's it from us. We hope you've enjoyed the auction room tales on today's show.

Make sure you join us next time for more Homes Under The Hammer.

-See you then.

-Goodbye.

-Goodbye.

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