Episode 45 Homes Under the Hammer

-Welcome to the show.

-They say every house tells a story. We've found that to be true!

There are always tales to tell and stories to uncover when you buy your home under the hammer.

Properties sold at auction are sold on a "buyer beware" basis.

It's up to YOU to check out the property thoroughly before you bid.

Or you could be in for some nasty surprises. Let's see if today's bidders were lucky.

'I've seen it all on Homes Under The Hammer, but this property in London is rather special.'

It's already setting itself apart.

'In Derby I give a masterclass in how to enter a room in style.'

OK, elegant entry number one.

'And the decor in this flat in Dover is dated, but...'

All is forgiven. Wow!

Look at this room!

All these properties were sold at auction and we'll find out who bought them and what they paid

when they went under the hammer.

'I'm in southwest London in Battersea.

'The area has undergone significant regeneration in recent years and now has more than its share

'of smart bars and bistros. It's a pretty cool place to live and more affordable than Chelsea or Fulham,

'so if you want cachet for less cash, this could be the place for you.'

So a good area and the property sounds good, too.

In fact, the auction catalogue says it would give a potential purchaser an ideal opportunity

to carry out works to their own specification. Anyway, it's a two-bedroom flat over two floors

in this lovely Victorian building. Let's take a look inside.

This leasehold flat is split-level on the first and second floor.

The guide price was £340,000 plus. That's a pretty penny for a two-bedroom flat.

So through your own door up the first flight of stairs to this little level

where you've got your kitchen. It needs a bit of work, but it's a good-size space. Separate loo there.

Bit of a crack there. That needs investigating.

Up another set of stairs. I love all these different levels. It gives it a nice feel.

That continues in here. Even in this stairwell, lots and lots of space.

Light thrown down, natural light, from that skylight up there.

First of your two bedrooms on that side and then through into an absolute gem.

This is your front living room area, this big bay window again casting lots of light into here.

Look at the high ceilings. I'd like to see a fireplace there.

Apart from that, this flat is already setting itself apart.

'There are two bedrooms in this flat - one on the first floor next to the living room

'and the second is on the top. Space like this in London is at a premium.

'Although the dingy decor doesn't do the flat any justice,

'if you gave it a spruce up and let the light flood in, that would brighten it no end.

'But that's for the future.'

Just check out the bedroom here. Something's niggling me a bit.

Sure enough, in the corner here we are seeing a few signs of plaster coming off the walls

and a crack there.

'Are the cracks a cause for concern? I'm not sure. What I am sure about

'is that I would get a structural survey done on this property before I bid on it at auction.'

I really do like all the stairs and different levels in this property

and there might actually be scope to even do more. Bathroom there, no loo. That's easily rectified.

And then through into this room, which is the second bedroom.

There is loft space above here and above other parts of the property.

Maybe you could think about doing something really clever,

maybe putting in even more floors perhaps, Dormers here and there.

While I'm up here, half-decent room as it is, although...

carrying on the crack theme, so to speak, that's not good.

A few more over here as well. Is it a big issue? They're not huge.

My guess is it's some kind of historical settlement. In fact, looking out of the window here,

super-sleuth Roberts might have found a few reasons why that is.

Just across there, a relatively recent - compared to the age of this house - development.

This whole part of London was quite heavily bombed in the war,

so it may well be that that part of around here was subject to bomb damage

and the vibrations or whatever have caused a few problems in here.

It's worth getting it checked out. On the face of it, not too much of a problem, though.

'But cracks aside, this flat has a great deal of potential in a variety of configurations.

'Option one, renovate it in the present layout. Option two, create a downstairs bathroom

'and add a loo to the upstairs bathroom,

'or option three, expand into the loft to add that all-important value-added square footage.

'With all those possibilities to consider, it's time to hear from a local estate agent

'about this two-bed flat guided at £340,000 plus.'

It's very tired.

Needs a lot of decoration. There are a few cracks to look at,

but great property, great location and really good space.

'Bearing in mind the great potential the flat has, what are the possible returns here?'

If this property was renovated to a good standard, I'd value this property at £490,000-£500,000.

If the purchasers decided to turn to two bedrooms, two bathrooms,

they might achieve about the £525,000 mark.

If the purchasers decided to do the full extension, go into the loft, I think they could achieve

anything from £565,000-£585,000.

'If you could afford it, a loft extension would provide a good rental return.

'The estate agents believe £2,000-£2,200 per calendar month is achievable.

'With a second bathroom added, he believes the property could achieve £1,700 per calendar month.

'But what about keeping it in its current layout?'

It would achieve £1,500 a month.

It's a flat by name, but I've seen smaller houses. I love this place and its potential for expansion.

A few issues with those cracks, but a great one to go for. Let's see who agreed.

Start at 300. It's not going to go below three. 300 down here.

305?

305. 310.

315. 320.

There were two parties keenly contesting this lot. We rejoin the auction when it reached £422,000.

422. 423?

422, back to you.

423 elsewhere? If not, 422 on my right.

Anyone else? 422.

First time, second time.

Third and last time. All done? Sold. 422. Well done.

Those successful bidders were Liz and her son William.

William, a software engineer, was away on business, so it was Liz and her daughter Rose

who met me back at their new £422,000 purchase to talk about their plans.

Rose is a freelance journalist, while Liz is a homemaker.

Could this flat be made into a home?

-Rose, Liz, lovely to meet you both. Congratulations.

-Thank you.

-Tell me why you wanted to buy this.

-Me and my brother are looking for somewhere to live.

We know the area very well and live round the corner. It's to make our own little home.

-You're in rented accommodation?

-We're just renting in a flat around the corner

and wanted to do something with our money, so buying was the best option.

And share the costs?

Yeah, exactly. My brother's buying the majority of it. I needed him to get anything at all!

It's tough, certainly, around the London area for starting out and buying your first one.

-Yeah. All my friends are quite surprised that I can even get on the property ladder.

-Wow.

It needs to be two people with independent incomes to get anywhere. Luckily, I have that with my brother.

'They're also lucky to be getting support from Mum and their dad, Geoff, who provided funds

'to buy the flat in the first place. Rose and William are taking a mortgage out to repay their parents,

'but another source of financial help proved invaluable.'

My deposit came mainly from our granddad, when he died. Our inheritance money has gone into here.

-I'm sure he'd be happy about that.

-Yeah, I think he would.

-So what are you going to do with it?

Just do it up in a homer. Nothing too major.

We'll make the bathroom bigger and turn the upstairs bathroom next to the master into an en suite.

Then, other than that, just obviously paint all the walls, put in the furniture,

-things like that.

-Right.

-But we have to have it all replastered and rewired.

-Yeah!

-There's a lot of initial work.

-And renovate all the floorboards.

-Yeah.

-There's quite a lot of work to do before you get the paintbrush out.

I'll ask the question again. Mum, what are you planning to do to the place?

'It's just as well that mum Liz is aware that the flat does need a full renovation

'from replastering to rewiring. It was sold by Wandsworth Council,

'subject to the decent home standard, which stipulates that it has to be habitable within 6 months.

'The current thinking is that dad Geoff will be doing the renovation, with tradesmen when necessary.'

Do we have to talk about the cracks? Big cracks...and things?

-Big cracks. There is a big crack I noticed, but...

-Where's that, Mum? Where's that crack?

-Just down there, isn't it?

-I don't know anything about it!

Well, there was a survey done and that would have highlighted the major issues.

All they've said is it needs extensive plastering. I presume it's a superficial crack.

-Or historical.

-Yeah. And there's two houses either side. I can't see how the house can fall down.

-Right.

So what's the budget for the work?

-The budget is like...30 grand?

-We're thinking £30,000.

-30?

-Wow. What are you going to do?

-That's exactly what I thought!

When that was what they came up with.

-I don't know what we'll do with that. That's what I said to you.

-You're hysterical.

-Yeah.

-Two bathrooms to be done, there's a whole new fitted kitchen.

-All the rewiring.

-The kitchen can cost several thousand.

-Yeah.

-And with all the appliances in it,

-I don't think there'll be much change from 30.

-OK, that's good.

'Rose's relaxed approach to the work is perhaps not what a standard renovator's would be.'

# I've never known a girl like you before... #

'And the timescale is relaxed, too, allowing six months before the siblings move in.'

Once you've done this project, are you going to take your considerable expertise to other projects?

I don't think so! I don't think we have any expertise as property developers

or interior designers, but this project, as soon as it's made into our home

and it's done to our spec, then we'll just call it quits.

Lots of things to look forward to finding out when we come back.

Yeah, great. It'll be done and under budget and on time.

-Good. Lovely to meet you.

-And you.

-Take care.

-Thank you.

Well, Rose possibly not as well prepared for this as she might be,

but with the help of Mum, Dad and brother, I'm sure she will be fine

and the property itself could make a great home.

Find out how it turns out later in the show.

I'm in Littleover, a large suburb about three miles outside Derby city centre,

to visit a property with a guide price of £48,000.

I'm here to see a two-bedroomed bungalow situated in a popular location

and actually nicely located on this little private green area. And this is it.

Now you've probably realised it's not standard.

Not standard at all. Not standard construction for a start.

No, it's a prefab.

Hmm. Could be a problem.

After World War Two, Winston Churchill ordered the construction of prefabs like these

to meet a predicted shortfall in housing when the troops returned.

They were made to be put up quickly using pre-made panels built in factories.

They provided all mod cons, but were meant to be temporary

and had a planned life expectancy of up to just 10 years.

But over 60 years later, the prefabs are as popular as ever.

OK, elegant entry number one(!)

What are we going to find? Well, interesting.

Layout works. Living room area there, kitchen off that way.

Two bedrooms and a bathroom there. What you have to get your head round is this really is non-standard.

You've got some storage areas here, like a cupboard.

It's metal. Walls - are they nice and solid?

No, they're not. Stud partitions.

You almost feel like it's like a caravan that's got some dividing walls in it.

So I think that's going to require a bit of specialist work.

But, on the plus side, the layout is simple, but it works.

Of course, the property is very dated. Many fixtures and fittings don't seem to have changed

since it was built in the 1940s.

This bungalow is a fascinating slice of architectural history.

The back wall of the bathroom is one prefabricated metal piece with built-in shelves.

The thing about prefabricated houses is that they've always been enormously popular.

I've been told they were earmarked for demolition, but local residents objected. Sadly, however,

they're less popular with lenders so getting a mortgage can be tricky.

So I'm mulling this over and I'm coming round to thinking

that renovating this might not be as big a job as I thought.

You haven't got brick and concrete, well, in the walls, but not exposed.

I think that means it could be that to do this up might not be too big a job.

There's certainly things to rip out, like these metal cupboards, but that lounge is great.

And then you come through here into the kitchen.

Fantastic.

Look at this colour. It's a little princess's palace.

Pink everywhere. On the floor, the cupboards, the walls. I mean, it has a certain charm,

but I think possibly a bit of your renovation budget is required in here.

Yes, one of the main issues with post-war prefabs like this is the lack of insulation,

as there are no cavity walls here. You can remedy that with a brick skin on the exterior walls,

which also makes them more acceptable to mortgage companies, but that can be a costly venture.

Taking into account that relatively low £48,000 guide price,

-we asked the auctioneer to tell us about these popular prefabs.

-Why are they still here?

Because people like them, there's a good market for them

and I don't think the council have any plans to remove them. People go for them.

So once it's renovated, what rental could you achieve for this two-bedroom bungalow?

If this was renovated, it would have a rental value of about £450-£500 per calendar month.

How about its resale value?

When renovated, assuming that it wasn't bricked round, this would have a value of £80,000-£85,000.

If it was bricked round, you might increase that by another £10,000, so up to £95,000.

Well, it was only meant to last a few years, but this property is still going strong.

It's going to take a bit of effort and money to turn it from its current post-war state

to something more modern, but these places are endearingly popular,

so I'm sure it was a hard-fought lot when it went under the hammer.

May I say 50,000 to start me? 50? 48?

£48,000?

45? 45 is my starter, thank you.

45 is the opening bid. 46 I'm looking for. 46 I've got.

At 46,000. 47.

47. 48.

At 48,000. 49?

49 is bid. At 49. At 50.

51 at the back. At 51. 52? £52,000.

53. 54 for you, sir? At £53,000.

54. 54. 55.

56. 57.

57.

58?

At 57,000. 58.

59. 60?

At £59,000. 60? I'll take 500 if it will help you.

59,500.

60,000.

At 60. 500?

At £60,000.

Once, twice...

Third time. Sold at 60,000. Thank you.

That final bid of £60,000 was made by John. He attended the auction with his wife, Dawn.

The couple have been buying and renting properties as a sideline to their day jobs for 20 years.

Some people are just workaholics!

I met them at the bungalow to find out more.

John, Dawn, great to meet you both. Congratulations.

-Thank you.

-Interesting property.

-Different.

-Yeah. Tell me why you wanted to buy it.

We invest in properties for a pension fund, really. We thought that was the best way to go.

-Tell me how you got into it, Dawn.

-By chance.

-Really?

Yes, we inherited property from parents,

both times at a time when houses were at a very low value.

So we decided that we would try letting and that's really where it snowballed.

-And so this now provides, hopefully, a bit of financial security.

-It should do.

-When we get to retiring age.

-We've not got round to retiring yet!

-OK, well, that's good! What do you do when not doing this?

-We're both accountants.

-OK.

One in industry and I'm in practice.

I'm financial director at a scrap yard - motor vehicle dismantlers!

We're not supposed to call them scrap yards, but everybody does.

This will be Dawn and John's 16th property renovation.

Frankly, it's been very rewarding.

We've enjoyed it. We've had some super tenants.

We've had the odd disaster, but everybody's had those!

Getting the whole tenancy thing going puts a lot of people off,

that fear of phone calls in the middle of the night, bad tenants not leaving, trashing the place.

It happens. The sort of phone call you get is at seven in the morning.

"My daughter got up in the night, put the bath on and the ceiling's come down in the kitchen."

So?

-At one time that was very concerning. Now it's insured, OK, let's deal with it.

-Right, good.

-So why this particular property?

-We've already got one like this.

-Oh, right.

At the other end of the estate. And it was very successful.

-John's always had a yearning for these. He likes them.

-Successful how?

-Never any trouble letting it.

# Then it's all just a little bit of history repeating... #

So this very experienced property developing couple already have the refurbishment

of a similar post-war prefab under their belts.

Let's hope this one holds no surprises for them.

So, tell me, what's the plan?

-Start with the windows.

-Right.

-uPVC windows, doors, new gutterings.

It'll keep it watertight and that'll do that side of it. Internally,

we'll replace the bathroom, replace the kitchen.

The walls themselves, we want to consider applying a plasterboard with insulation behind it

-to try to give a bit more insulation to the structure.

-On the inside.

-Inside.

-Right.

Decorate it and hopefully find a nice tenant.

What about the budget?

-Dawn said about £20,000. I thought about 30.

-Wow.

-You're accountants...

-Yes, but it's a peculiar building.

-We may find something we don't expect.

-You're allowing contingencies.

-Well, that,

-and I don't want to skimp it. I'll regret that afterwards if I do.

-And it'll all take how long?

This is dependant on the people that do it and the weather.

-We're saying if it's finished by March, that'll be fine.

-Six months.

Six months. But we'll see.

-Congratulations. Good luck with it.

-Thank you.

-We look forward to seeing it.

-Come see us again.

-We will.

Well, John and Dawn have purchased plenty of properties in the past,

but will this post-war prefab cause them any problems?

You can find out later in the show.

'Coming up: I'm bowled over by this terraced flat in Dover.'

It really is fantastic. I am very excited.

'Back in Derby, it's not alarm bells that have been ringing.'

MUSICAL BELL CHIMES

That's my doorbell ringing. I love my doorbell.

First, we find out how Rose is settling in to her new home in London.

I just love it. I love being in my flat.

We head back to Battersea in southwest London now

to see how Rose and her mum Liz got on with renovating this two-bedroom split-level flat.

Along with her brother, William, Rose had bought it for £422,000.

They had some help from the Bank of Mum and Dad and the plan was to make this into their new home,

but in all the excitement Rose missed one or two major issues, like the cracks in the walls.

-Talk about the big cracks.

-There is a big crack I noticed, yes, but...

-Where's that, Mum? Where is it?

-Just down there.

I don't know anything about it!

I wasn't too worried about Rose as mum Liz was switched on and dad Geoff was on hand to help

with the DIY. They had six months and £30,000 to turn this sad-looking flat into a home.

Bang on six months later, we're back.

Straight away we can see the living room has been given a new lease of life.

The walls have been decorated in white, contrasting with the warm tones of the hardwood flooring.

The first-floor bedroom is now a beautifully stylish and colourful kitchen, again with wood flooring

which continues throughout the flat.

The old kitchen has now become a bedroom. In fact, it's Rose's.

And if you're thinking it looks smaller, you're right. The partition wall for the toilet was moved

to create a larger shower room and toilet.

On the top level, William's bedroom has been renovated and decorated in clean, simple lines.

A new doorway has been created to give the room its own en suite shower room

and the original landing door is now blocked.

The work on the flat is now all finished, so for Rose and William, a software engineer,

this is now their new home.

I just love it. I love being in my flat

and I love how everything is designed for me and my brother to live here.

The flat is, now it's been renovated, absolutely fantastic. In particular, the kitchen.

Everything is new and clean and exactly how I want it. I love living here.

It's easy to see why. While the finish is to a good standard and the decor is simple,

for Rose and William one of the joys of finally having their own property

is the freedom to have their own personal touches.

Basically, he likes things that are new and very clean.

And I like things that are old and have character and you get them in an auction or flea market.

I think most of it ended up the way Rose wanted it to be.

Ultimately, I think there's a difference in priorities.

I think Rose cared more. I just wanted somewhere to live.

That difference in taste was also reflected in the approach to the renovation,

-which did lead to differences of opinion.

-There have been a few arguments along the way.

Not so much while we're living here, but along the way, refurbishing it.

Luckily for the pair, the renovation itself wasn't a tense affair.

Stripping the flat down to the bare brick and giving it a complete overhaul presented no major problems

but the floorboards, which were rotten, did need replacing. As for those cracks...

The cracks, there was no problem with them. They weren't anything structural or to be worried about,

so that's all fine.

I'm glad Rose finally got up to speed with that little problem, but while she travelled from Kent

to keep an eye on the renovation, William and Rose didn't get their hands dirty

because it was another family member who was more hands on here.

Dad has been really heavily involved, but not in the manual labour sense.

But he's been project managing everything. Although I got him and my mum to do all the wallpapering.

They're a good wallpapering team.

Mum Liz and dad Geoff have also been crucial in helping to buy this flat

and get the siblings onto the property ladder, though Rose and William are now paying them back.

But when it came to finances, did they spend all of that £30,000 budget?

All in all, the house and the renovations came to, roughly, £500,000.

That breaks down into 422 at auction,

plus roughly £27,000 of fees

and then an additional £50,000 of renovation.

Well, I thought that £30,000 was pretty decent, but £50,000?!

That's a definite overspend by any reckoning,

but it is primarily a home, not so much of an investment.

Time to hear the thoughts of two local property experts. We start with one who viewed the flat before.

The changes they've made are really positive. Original two bedrooms with a disjointed bathroom,

wrong location for the kitchen. They've made it into two bedrooms, two bathrooms. Really positive.

The flat's brilliant. Great for the demographic who would buy it.

The fixtures and fittings are brilliant, loved the wood floors and the kept the old windows.

The total spend on this renovation is £499,000.

So could they make a profit if they decided to sell?

I think this could sell at £575,000.

I would put it on the market for £575,000.

With that valuation, the pair could make a £76,000 profit, minus any tax and other expenses.

That's a much nicer flat than we could have afforded without going through this process. Excellent.

It's a great price, but we're not interested in selling. We'll stay here, but it's amazing to hear.

If they ever decide to let the flat, they could get a monthly rental income

of £1,700-£2,100 per calendar month.

That could mean an annual yield of 4%-5%.

But for now, after waiting so long for their own place, Rose and William are happy to be home owners

and to enjoy all the benefits that come with that.

It really feels like a proper home and it's amazing just seeing everything coming together

and everything exactly as we want it everywhere.

So it's been really good.

Dover was once a military town, so the closure of the barracks in 2007 was a contributing factor

in the town's economic decline.

Now, however, there is investment planned for the town centre

and with a fast train link to the capital, Dover could be marching to a brighter tune in the future.

The property I'm here to see is part of this grand terrace,

built around 1850 to house officers stationed in the town.

The whole terrace is Grade 2 listed due to its dominating position overlooking Dover,

but the bit I'm interested in is the ground floor one-bedroom flat

which had a guide price of £60,000.

The property does have an imposing facade and location,

but this would not pass out on parade without closer inspection.

There are some tell-tale signs that the building needs significant work,

but the communal hall hints at its former glory.

Oh, very dated.

But all is forgiven.

Wow! Look at this room!

This is everything I love, love, love, love.

Wasn't expecting this.

Absolutely stunning. And huge. The proportions are enormous, amazing. It feels so right.

I mean, look at this stunning piece of marble here. Absolutely gorge.

I'm not sure about this wallpaper - we'll have to get rid of that - but look at the cornicing.

Beautiful. The ceiling rose. I think it's lots of bits of fruit cobbled together - pineapples,

pears, some apples. Really beautiful.

Over here you've got these shutters. The thing that strikes me is it's all in such good condition.

Look. Deep skirting boards, just how I love them.

It really is fantastic. I am very excited.

What a find! A truly magnificent room.

This is just the kind of historic property that I love to see being returned to its former glory.

# Making me glorious... #

Part of the living room has been separated off to create a bedroom.

It's not huge, but it also has these lovely, original shutters.

The kitchen's at the front of this flat. It's also got gloriously high ceilings.

It'll need completely stripping out, but this is a big room that I'd love to redesign.

I reckon you could fit a table and chairs in, no problem.

The bathroom - same story there.

Last, but not least, there's this strange little lean-to at the back, leading out onto...

Well, you just wait.

Oh!

Wow! Just look at that sweeping terrace. It really is quite breathtaking here.

Interestingly, they've covered this little area in, this veranda.

I'd like to get rid of all that and emulate the neighbours. It would be so lovely to sit outside.

That's fabulous. You get outside space, a share of the garden.

I'm not sure which part, but it's wonderful to be here in Dover, have a garden,

have a wonderful flat. This little place is something special.

To sit in this garden with that Victorian terrace for a view would be a delight.

# Magic in the air... #

And I'm told that in the winter, when the trees lose their leaves,

you've got a decent view of Dover as well.

This flat would make a very comfortable and enjoyable place to live once you make it your own.

But before that there's something to bear in mind.

The state of the flat itself isn't great, but you can sort that out.

It's controllable and dealable with.

The condition of the building and communal areas is more complicated.

If I was taking this place on, I'd be thoroughly researching why the building

is not being maintained, why nobody is taking responsibility for it,

whether there's an annual service charge set up for maintenance and a sinking fund for major works.

It's all about protecting your own investment and making sure any works won't cost you an arm and a leg

at the same time.

Allowing a Grade 2-listed building to fall into disrepair could prove an expensive business,

especially if there's no sinking fund in place to cover repairs.

So although that £60,000 guide price could seem a bargain, there might be a catch. You know the drill.

Always check the legal pack.

We asked a local estate agent to tell us what he thinks of it.

These buildings are old

and always require continual maintenance. You're very close to the sea and coast here.

You have a lot of salt in the atmosphere. They need to be protected.

The flat went to auction guided at £60,000,

so how much could it be worth after a refurbishment?

Once improved, this flat will probably be £80,000-£100,000.

And the rental potential of the flat once done up?

The rental value, in good order, is going to be £450-£500 per calendar month.

This is a little piece of Dover history which has character and masses of charm.

It's not without its issues, but for someone it will be well worth the hassle.

Let's see who that was.

Lot 16 is the ground-floor flat in Dover.

What may I say? £55,000 anywhere? 55. Thank you very much.

£55,000 I have.

At £55,000 I am bid. 56 I have.

And 58?

And eight I have. At 58. And 60? And 60. And 62?

No? At £60,000 I have. Anybody else can join in here.

Well, at £60,000, then. Hammer's up at £60,000 for the first time.

60,000 for the second time.

60,000 for the third and final time. At £60,000, are you all done?

Sold at 60,000.

That very happy bidder, who paid the exact guide price of £60,000 is Hugh.

He and his wife Judith live in Market Harborough.

He works in a warehouse and Judith's an optician.

# Cos these rose-coloured glasses... #

'I met up with them both at the property to find out why they'd eyed up this fabulous flat.'

Judith and Hugh, I don't always get quite this excited about flats, but I love this place!

-Oh, lovely.

-Why did you want to buy it?

-We own the top two flats already.

-In this building?

-In this building, yes.

And this one came up for sale so for numerous reasons we thought we'd have a look round

-and went for it.

-Why do you want to own another one in the building? What is it that you love so much?

I think this terrace is one of the finer points of Dover.

If you drive in to Dover, you'll see the castle and then this terrace.

It's such a magnificent building, I just wanted to have part of it. It's lovely.

Having the top two flats is wonderful, with views to the sea, but this has access to the garden.

What you don't expect is when you walk out the back and you see that beautiful sweep.

-It just looks stunning.

-Years ago, you could actually see the structure of the terrace much better

-from the town. The trees have obviously grown.

-You know Dover well?

-I grew up here.

I've been a long time away, but I came back and fell in love with the place.

# We are happy people

# We are happy people... #

Well, what better place to purchase property than one that makes you happy every time you're there?

Now that Judith and Hugh own flats at both the top and the bottom,

I wonder what their plans are to lift the spirits of this ground-floor flat.

-How are you going to turn this place around?

-We thought about moving the kitchen into the bedroom

and swapping them over, but that's probably too expensive. We need new kitchen, new bathroom.

The electrics have got to be upgraded and the central heating is poor. We need to sort that out.

Beyond that, I don't think we'll do more than bring it up to date.

That's a really big list of jobs to do and I'm not sure the couple's budget of 10 grand will be enough.

However, the good news is that there is a sinking fund in place for the five flats.

The couple had inside knowledge of that as they already owned the two top-floor flats.

What are your immediate plans for the flat?

-Once the work are done, we hope to keep it for ourselves as a holiday home.

-Really?

We were originally thinking of having the top-floor flat, but we decided to rent it out

and get some money back. But now, this time, we're going to get some pleasure out of this.

-Judith, when you told me about that, your whole face lit up. You really do love it here.

-Yes.

-Both of you.

-Yeah, we do.

-I am so excited to see it.

-Congratulations, guys. Well done, thank you.

-Thank you.

-Thank you.

I think this is a stunning flat. It's very, very special and there shouldn't be any nasty surprises

because they know the place inside out, warts and all. Still, I hope the works don't escalate

and costs don't spiral out of control. You can find out how it goes later on in the show.

Transforming a property from a worn-out shell can be very rewarding and profitable.

But did everything go smoothly for our buyers today? Let's go back and find out.

It's time to return to the popular suburb of Derby, Littleover,

where I viewed this two-bedroom bungalow. It's a post-WWII prefab.

They were originally only expected to have a 10-year lifespan, but over 60 years later

the prefabs in this area are proving as popular as ever.

The property was purchased at auction by husband and wife John and Dawn for £60,000.

They have an extensive rental portfolio which they hope will provide income for their retirement,

whenever that might be!

-So this now provides financial security for your future?

-Should do.

-When we get to retiring age.

-We've just not got around to retiring yet!

After 60-plus years, this post-war prefab is still standing

and just seven months after we first met the couple, we're back.

# I'm still standing better than I ever did

# Looking like a true survivor And feeling like a little kid

# I'm still standing after all this time

# Looking like a true survivor And feeling like a little kid

# I'm still standing

# Yeah, yeah, yeah... #

The place has been totally refurbished from double-glazed windows, new doors,

interior and exterior.

We've had it plastered right through, electrics upgraded, new bathroom suite, new kitchen.

Externally, we've done the drainpipes, the fascias. Almost like a new build.

John, Dawn and their team of tradespeople have been busy.

I have to agree with John. It does look like a new-build, inside and out.

Outside, of course, was totally dug up. We block paved a large drive

to give people access to the property. It's permit parking only.

And then we've lawned it as an easy way of maintaining.

So it really went quite smoothly.

One problem with prefabs is the cold.

Due to the lack of insulation on the walls, they can be chilly.

To prevent this and ensure the bungalow is warm and snug,

the couple have added specialist insulation panels to all the walls and insulated the loft.

It keeps the place cosy while also helping to keep heating costs down.

Dawn has also added a feature that will either warm your heart or send a chill down your spine.

MUSICAL DOORBELL

Yes, that's my doorbell ringing.

I love my doorbell. I am slightly deaf at home and I don't hear my own,

but that's got so many tunes on. If you get tired of one, you can change it. It's a lot of fun.

Go on, Dawn. Give us another.

PLAYS "Ode To Joy"

Well, I think that's quite enough.

Oh, all right, just one more.

NEW TUNE PLAYS

# I'm thinking about my doorbell

# When you gonna ring it? When you gonna ring it? #

I think it's best we move swiftly on. Surely a pair of accountants like Dawn and John

have kept a firm grasp of the budget? They had differing views on what the spend should be.

Dawn reckoned 20 grand while John thought 30 might be necessary.

So who was right?

Well, we paid £60,000 for the house at auction and with the legal costs and the auctioneer's costs,

that came to slightly over £61,000.

So we must have spent... around something just under £24,000.

That gives Dawn and John a total outlay of around £85,000.

They had hoped to have this bungalow ready to let in six months, but it has actually taken seven.

However, they can be justifiably proud of what they've achieved.

It will make somebody a lovely home and that's what we like.

We hope they stay a long while.

We try to provide good properties in a good state

because we both feel if we don't, the tenant won't look after them.

And we probably won't get such good tenants.

With the work John and Dawn have done on this prefab, I think it'll be standing in another 60 years'.

We invited two local property experts to give us their opinions on John and Dawn's renovation.

Anyone looking at this property will be impressed

by the fact it's all new, clean, tidy. New bathroom, new kitchen,

carpets, decorations. It's like a brand-new property inside.

Impressions are good. It's been redecorated, new flooring, new kitchen and bathroom.

I like the way the owner has block-paved the driveway, giving it extra car parking space.

It seems the experts are impressed. Bearing in mind John and Dawn's total outlay of £85,000,

how much do they believe this property could achieve if sold?

I would say if this went on the market it would have an asking price

of around £90,000. It might be a shade more than that.

If I was putting this on the market for sale, I'd go for £85,000.

Those valuations would mean the couple breaking even or, at most, making five grand,

minus the usual tax and expenses. What do they think of that?

I wouldn't sell it for less than £100,000.

I don't know why they've gone so low on the valuation. It's certainly far less than our expectation

and our expectations were not high.

Disappointment with the sale valuations, but this bungalow is destined for the rental market.

In terms of rental value, I think these would rent out at about £475 a calendar month.

There's not a lot of floor space, but it's a popular location.

If they want to rent the property out, I would suggest a rental per calendar month of £495.

That top rate of £495 per calendar month, if achieved, would give the couple

a respectable yield of around 7%.

I'm sorry, but the agents... No, I'm sorry. I don't think they're right.

And in this case John and Dawn were right. The property is now rented out for £550 per calendar month,

so they have completed this, their 16th property renovation, successfully.

It doesn't sound as though they'll stop there.

We get enjoyment out of it. It's not a chore.

I think that's very important when you do these sort of things.

Welcome back to Dover in Kent.

# And time is running out for me

# I wish that he would hurry down from Dover... #

This historic Grade 2-listed building was built around 1850.

# From Dover... #

I loved the sweep of this fantastic terrace and so do Hugh and his wife Judith.

They already owned two flats in this part of the terrace, which they let.

Then they bought this ground-floor flat for £60,000 at auction.

It needed a total refurbishment.

How will you turn it around?

We need new kitchen, new bathroom, the electrics need upgraded.

Beyond that, we won't do anything more than bring it up to date.

Judith and Hugh were going to keep this flat as their holiday home.

They planned to spend about £10,000 redoing the inside.

An added expense they faced was refurbishing the exterior,

which each flat had to contribute to and they now owned three in the building.

It's now 9½ months later and the outside of this Grade 2-listed building is being restored

to its former glory. Good news

because the inside of Hugh and Judith's flat has been refurbished.

The grand sitting room has been fully restored.

And there's been a similar transformation in the kitchen.

Well, really, pretty much everything has changed in here.

If you remember, this corner was very ugly, a lot of pipework.

We got our carpenter to make a cupboard. That's hidden everything away very nicely.

There was also units all the way round, so we decided just to put units along the one wall.

We've managed to keep this space in the corner as an eating area. Our major discovery was the fireplace.

We thought it was wood, but we realised it was marble. We uncovered that.

It took a lot of work. We've ordered a shelf to go on top

to make it look more authentic again. I'm looking forward to seeing that when it's finished.

I really love the high ceilings in this flat. What a throwback to a more elegant era.

I'm very impressed by the effect the couple have created in the bathroom. The black and white

mimics the old Victorian tiles which would have been used originally.

Like the sitting room, the bedroom at the back now looks straight out onto the garden without obstruction.

As you might remember, this was all enclosed.

There was a rotten, grotty conservatory here,

but the first job we did, I came down on a Sunday and started removing it,

much to the delight of our neighbours as well.

There's still some more work to do. I'll paint the railings black and the woodwork needs another coat,

but it's really improved. We're trying to get this property back to how it should look, really.

It's proved to be the perfect time for them to add this flat to the two they already owned here.

Inside and out, this Grade 2 property is going up in the world.

A huge amount has been done to the outside. We've had a new roof

and they're working on the pointing. Hopefully, from having one of the worst houses in the road,

it'll be one of the better ones.

Each flat had to contribute about £7,500 to top up the shortfall in the sinking fund

that's used for the exterior maintenance. As they own three,

that's a whopping £22,500 towards the outside repair work.

Back inside, the couple started off doing a lot of the decorating themselves,

removing the woodchip paper and nicotine-stained walls.

-The worst thing from my point of view was when we realised we'd got to plaster the whole flat.

-Yes.

We really hoped to get away without paying to plaster the whole flat.

Every time we started doing another bit, we realised more needed doing.

I'm just wondering if, in the end, that ambitious £10,000 budget was rather over-optimistic,

-as I'd feared.

-We've definitely gone over.

I think we're probably at around 13, but we'll probably end up, when everything is added up,

having spent a little more than that.

Based on their current spend of £13,000, plus the 60 grand they paid at auction

and the £7,500 for the exterior,

that brings their total outlay here to £80,500.

Time to hear what two local estate agents think of the refurbished flat, starting with the one

who viewed it before.

I think the changes here are fantastic. They've transformed it.

'They've finished it really nicely. They've tried to maintain'

some of the features of the property, but modernise it at the same time and they've achieved a good job.

Although Judith and Hugh are going to keep this flat for themselves,

they have two others in the block which they let out. I'm sure they'd be interested in rental potential.

I think if this were to be let, the rental value of it now would be about £550 per calendar month.

This flat on the rental market would command a rent of about £500 per calendar month.

-The rental value sounds about right from what we know of the area.

-Yes.

So pretty pleased with that.

Bearing in mind their £80,500 investment here, how much could it sell on for now?

I think if you were going to sell the flat, you would think about marketing it

for about 95 and settle for anything between £85,000 and £95,000.

If this were to be sold now, I think I'd put it in the market at somewhere in the region of £95,000-£100,000.

That range of valuations from £85,000 to £100,000 would produce a profit of between £4,500

and £19,500.

I'm actually pretty pleased with those agents' valuations.

We were slightly worried that we had spent more than we should have done,

-but that sounds perfectly reasonable.

-It does.

They always planned to keep this for their holiday use, but are they tempted to let or even sell?

No, we're definitely using it ourselves. We've put all this effort in and want the benefit ourselves.

-Sitting out on the balcony in the evening, or eating breakfast, will be very enjoyable.

-Yeah.

Whether you're a complete novice or a property professional,

-there are always lessons to be learned about buying property.

-So make sure you join us next time.

-We'll see you then.

-Goodbye.

Subtitles by Red Bee Media Ltd