Episode 60 Homes Under the Hammer

Buying property can have its highs and lows.

But there is one element of the process that you can eliminate.

That dreaded property chain.

How do you do that? By buying at auction.

There are all sorts of properties that come up on auctions these days.

There certainly are. It's that variety that keeps us all interested.

So here are the three properties that we're featuring on today's show.

In Chatham, Kent, I view a real find.

A three-bed detached property with bags of potential,

plus a possible building plot.

In the north-east, this terrace has three floors, two flats,

features and space.

It is a whopper!

And we head back to south-east London.

Two years ago, Charles and Tima bought this Grade II listed building.

Have their grand plans come to fruition?

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.

Sold.

I'm in Chatham, which started life as a small village.

It has since developed in size around a busy dockyard

that is now a major tourist attraction.

Chatham's less than an hour from London by rail,

making it attractive to commuters.

The street I am on today is mainly made up of terraced houses.

However...

The property I'm here to see is actually detached.

A real bonus.

It's got three bedrooms

and a guide price of 165,000-175,000.

That doesn't sound like a lot of property for the money yet,

but let's not judge it too quickly. Here it is.

A rather attractive house popping up over this hedge.

I reckon there's a decent sized garden to the side.

Well, let's start by heading inside first.

There's no off-street parking but that may not be a deal-breaker

and the outside bodes well.

With this property there's a little bit more than meets the eye.

But first of all, let's talk about what we can see.

That is a very nice hallway.

It feels solid, it feels well built, this house.

Yes, it is dated, it needs new carpets, lots of wallpaper stripping off

but it is a beautiful and bright sunny space.

You've got a double aspect window, one at either end.

The walls have already been knocked down.

You've got the kitchen, so you can have a chat with your friends whilst you're cooking supper.

I'd go as far as saying this is a really sociable house.

I do like an open-plan layout and this one works a treat.

Upstairs, there are two double bedrooms and a single

all in need of a bit of a makeover.

The bathroom's also up here and it is rather tired

but you don't need to do any structural work on this floor.

There's a massive basement full of possibilities

with the appropriate planning permission.

There's something else about this house that's got me thinking.

Aye-aye!

You might be wondering why I was giving you a bit of a cheeky wink earlier.

That's because I've not been telling you the whole truth.

Come outside and I can reveal all.

# I know a secret

# It's about you... #

Just look at this large garden at the back.

But no, that's not the most exciting news.

Not only do you have this rather pleasant house.

Have you guessed yet?

Well, it also comes with planning permission for a three-bedroom house

to be built here next door, creating two semidetached houses overall.

This auction lot suddenly seems much more lucrative.

Yes, you would have to spend money building a new house here

but I think the return would far outweigh the initial outlay

and, personally, I can imagine two properties sitting here

in this residential spot.

There is more to this lot than it first appeared.

Have I got your attention now?

# Give a little bit of attention to me

# Yeah, baby, baby... #

It only has outline planning at this stage

so you'd still need to submit full plans to the local council.

There's also some work to do before you can start building

but, in principle, the planners are happy for a new semi

to be built on this land.

I'm still not finished with the plus points here.

I've told you about the building plot, here are the garages.

Not one, but two.

And they come with their own access.

That means even more potential income

as you can rent these out separately.

Time to hear what a local estate agent thinks of this

ever-expanding auction lot,

guided at 165,000-175,000.

I think there's a lot of work that needs to be done.

Decor, kitchen, bathroom.

I think the whole house would benefit from a refurb.

What about adding another semi to the side?

I think in any other area I wouldn't change a property

that's detached to a semidetached because it would lose value.

However, I definitely think that a three-bedroom semidetached would be

more saleable in this area because of the house styles around it.

Let's turn to figures then.

If the house was done up but left as a single property,

what could it sell on for?

If this was renovated as a detached house

I would expect to achieve £175,000-£180,000.

What if it was let?

If this house was renovated and rented out,

I think we'd be able to achieve £850-£900 per calendar month.

What if the owner did build a semi at the side?

Each semidetached house on this plot would achieve

£140,000-£150,000.

So, if it was built, what could they both rent out for?

Each semidetached house would rent for approximately £700-£750

per calendar month.

Well, this auction lot suddenly got a whole lot more exciting

with the addition of that building plot.

I always say the best way to make money with property

is to increase the square footage

and on this occasion you could build yourself a whole second house.

That screams out potential to me.

Let's see who agreed when we went to the auction.

It's an existing detached house on a corner plot

with planning for an additional unit next door, adjoining.

Start at 150,000.

150, I'm on the way. I should think so too.

Lots of interest in this property at the auction

and the bidding was quick to get up to that £180,000 mark

where we rejoin it.

Shall we say 180? 180.

180 and two. 182.

182 anywhere?

At £180,000 then, I've got for the first time.

If I don't get another two...

£180,000 for the second time...

182, I'm obliged.

184.

184.

184. 184 and six.

186?

£184,000. Again, for the first time.

184,000 for the second time.

Second row in, it is. Make no mistake.

Third and final time. Put your hand in the air sir, for the £184,000,

so we know it's you because you're both sitting in front...

That's the bid I've got. £184,000. Are we all done?

Yours.

That mystery bidder who secured the property for 184,000 was Dev.

He's bought this detached house along with his brother, Rohit.

Sadly, that tantalising glimpse of Dev is all we'll see of him

as he couldn't meet me at their new purchase.

So, it was Rohit that I met there.

Congratulations, let's talk about this property.

You have got yourselves a great, solid house.

Yes, it looks in pretty good nick.

There are one or two things, some repointing to be done outside,

particularly the back.

We would need to redecorate and obviously modernise things

like the bathroom, toilet, kitchen.

But apart from that, there isn't much structural work to be done.

Prior to the auction, did you or your brother get a chance

to have a look around?

No, we didn't have a look at this property inside

but the builder did have a look around.

He's someone we've employed for various other things.

He felt it was worth taking a risk, not a risk,

-taking a chance at the property.

-Are you pleased?

Now you've had a chance with your brother to come along

-and have a look at the property.

-Yes, we are very pleased.

Hopefully we can let it out fairly soon for rental.

We will need full planning permission

for the next property to be built.

When we got here, we looked at the two garages at the back

which we hope we can actually keep separate

and let those out as well. There's some income there.

It does come with outline planning permission.

Do you intend to build a house on the site?

We're not entirely sure yet. We've got two choices.

Obviously, we could get the full planning permission

and sell it off as a building plot to a builder

or build ourselves and then we'd have two properties on the site.

Rohit is a retired dentist and his brother, Dev, runs a pharmacy.

Hopefully, they could make filling this garden gap

as painless as possible.

Rohit already looks after the tenants

and does the paperwork for their portfolio.

However, if the brothers decide to go ahead and build

it would be quite a departure.

-Have you ever built a house before?

-No, that would be a new venture.

What's it going to be like, the house next door?

Very much similar to this, a three-bedroom property.

With a lounge-diner and a kitchen.

Hopefully, it might be a mirror image of this property.

I think that'll attract so many buyers.

A lovely new house on the road.

Yes, I think so. The houses are all very different in this road.

If you could have two that look similar, then hopefully

there'll be more interest in that particular house as well.

What sort of budget have you got in mind?

We think the inside could be done,

with replacing the central heating system as well,

which does needs replacing, for probably under £30,000.

I think that's probably the top figure.

Do you think it's going to be quite an undertaking, this project?

Yes, we are not do-it-yourselfers!

So we would get somebody else to do all the work.

Unlike some people who buy houses and do the hard work themselves,

obviously there is a greater profit in that.

But we neither have the time or energy to do that sort of work.

We would get somebody in to do it.

Once we hand it over to the builders and architects,

-we just stand back and watch.

-Silent partners.

-Hopefully, yes.

It's been lovely meeting you today.

Good luck with this project and I hope it goes well.

-Thanks very much indeed.

-Well done.

-Thank you.

As a bit of a spontaneous purchase, I think retired dentist, Rohit,

and brother, Dev, have bought really well here.

However, now the hard work really starts

and the decision-making begins.

They have a lot of ideas and it is really exciting times.

But will they get that full planning permission without a hitch?

Or will it be like pulling teeth?

Join me later in the show to find out which route they'll choose to take.

# I'm pickin' up good vibrations

# She's giving me excitations... #

One of the gems of Britain is the beautiful Northumberland coastline

in the north-east of England.

I'm in Blyth, which has benefited from a £3 million investment

over recent years, including the regeneration of the beach front here.

# Good vibrations... #

These wonderful beach huts have been spruced up

and you can hire them for £21 a day or £850 a year.

I wonder if the local rental market could tempt investors

to dip their toe in the water?

# Good, good vibrations...#

Lots of new housing is springing up in Blyth,

a sure sign of a place that's on the up.

Newcastle's only 30 miles away, but for me this is the main attraction.

The property I'm here to see is very close to that beach

so in a very popular part of Blyth.

Unfortunately, right by the side of this fairly busy main road, which isn't ideal.

The property itself, though, is this handsome mid-terrace.

It's over three floors, two flats, guide price was £90,000-plus.

In we go.

So, first of all into flat number one.

Nice high ceilings, we like that.

Look at the size of that front room. Absolutely fantastic.

Lovely, original features too.

That thing on the ceiling there looks to be in half decent condition.

Small bedroom, which is a bit of a disappointment.

And then through to the rear of the property.

It really has got me a bit perplexed

because the property is described as a one-bedroom flat.

Is that the bedroom?

I mean, I would, if it was my flat,

make that big front room the bedroom

and have that as a second bedroom or a study.

The only problem you've got is noise from the road.

You wouldn't lose living space because look at this.

You would lose living space, but I don't think you need it

because you've got this really nice-sized rear living room here.

Off that, the kitchen.

It is all in pretty good nick, look at this.

It hasn't got a cooker and a cooker hood and stuff

but slap a couple of those in and perfectly serviceable.

Good start.

# Oh, what a result

# Top of the league

# On a winning streak... #

The bathroom is off the kitchen but again it's in pretty decent condition.

I think this is a very spacious ground floor flat.

# R-E-S-U-L-T now... #

This is only the start.

There is still a three-bedroom maisonette on the upper floors to explore.

So, up these stairs into the second flat.

And it is a whopper!

Honestly, I don't think I've seen a flat this big ever.

You've got some stairs leading to the top floor there

but that's just one of three floors. We're on the middle floor here.

Bedroom there, that's not massive, but come in here.

Absolutely ginormous living space. I absolutely love it.

Lots of light flooding in through the windows, high ceilings.

Then come through here into, I think, an extension bit on the back,

where you've got your lower floor there, which has got utility bits and pieces.

Then the kitchen here.

Again, the double aspect gives it loads of light

and makes it a lovely space to work in.

In terms of quality of the units and the condition it's in,

it's not brilliant, but it is perfectly serviceable.

So... SURPRISED GASP

The flat has another small bedroom on this floor

but I can live with that given the surprising size of that vast living space.

The place has loads of character.

I'm just loving the banisters.

And so on up the stairs of this house, which is fast becoming a deceptive delight.

Up here on the top floor, it carries on impressing.

Really nice sized bathroom with a separate shower and a bath and a loo.

Then, slightly odd, but you've got another loo there.

Then through into this room here,

I love attic rooms, so this ticks my boxes.

A bit of a dormer there, lots of light again.

There is absolutely nothing flat about this flat.

Nope, these flats definitely have a fizz.

# In a champagne supernova

# A champagne supernova in the sky...#

I'm not so sure about the champagne bathroom suite

but at least it's not avocado.

I reckon if the new owner picked up this up for anywhere near

the guide price of £90,000-plus, they'd have got a real bargain.

To get more information about this pair of properties,

we spoke to a local property expert

who's familiar with the housing market in Blyth.

I think in the ground floor flat, the front reception room

needs to be the double bedroom because the other bedroom isn't very big.

In the maisonette upstairs, there's a huge bathroom

which you could possibly convert into another bedroom

but it would be up to the new owner to decide whether they need that

because there is a lot of space up there already.

I like the fact the properties have retained some original features.

Both properties have a separate yard each.

It means, when we do get the sun, there's somewhere to sit on an evening.

OK, the yards are small but they are private

and each have their own gate.

A definite bonus which could appeal to tenants.

How much rental income could these flats generate?

I would recommend around about £425 per month for the ground floor one

and the maisonette, £475 for that one.

That combined rental income of £900 per calendar month

would produce a very impressive 12% yield.

What resale valuation could the two flats achieve after refurbishment?

For the ground floor flat I would recommend an asking price of around £60,000.

It doesn't really need a lot of work doing at all.

The maisonette, depending on what standard that would be up to,

I would expect an asking price of around £75,000.

Well, it is a lot of property, or rather properties,

for that 90,000-plus guide price.

Some potentially very impressive rental yield.

What's not to like? Let's see who agreed when it went under the hammer.

Lot number 18.

I'm going to move up into Northumberland now and into Blyth.

80,000 anywhere?

Left-hand side, gentleman standing, at £80,000.

Do I have 81 anywhere else?

81 sitting. 82. 83.

84. 85. 86.

87. 88. 89. 90.

91. 92.

Three. Four. Five. Six. Seven.

Eight. Nine.

98,000 on the left. 99.

No? I'll take 500, 98,500.

98,500 bid. 500, 99.

99,500. 100.

100,500.

I'm here, left-hand side at £100,000.

500 anywhere else?

I'm here once at 100,000.

I'm going for the second time at £100,000.

Sold, gentleman on the left-hand side.

The successful bidders who paid £100,000 were Carol and Anthony.

They have a rental portfolio across a number of properties

in north Tyneside and Northumberland.

They're particularly keen on coastal towns

and Blyth certainly has a lot to offer.

I met up with them to hear about their plans.

-Anthony, Carol, great to meet you both.

-Likewise.

-Congratulations.

-Thank you.

-Good property.

-Very nice.

What particularly attracted you to this place, Carol?

We own the flat that's next door on the ground floor.

We came to do a repair, noticed it was up for sale

and decided to look into it,

see how much it was up for and then attended the auction

and were lucky enough to buy it.

Carol and Anthony have been in the property game for 20 years now.

They've certainly been able to make it work.

Carol works full-time for the couple's property business

and while Anthony works for a large IT company,

he's now part-time, allowing him to concentrate more energy on property development.

The couple's experience has certainly paid off with this one.

They did their homework, for one thing, which is essential

when you're bidding at auction.

We did a lot of research on this one before we bought it

because there were a few issues, legal issues, because although

they're two separate flats, on the Land Registry,

they are separate flats but there's no leases.

So the properties couldn't be sold as separate entities.

They'd become unmortgageable as two properties,

they had to be bought as one.

We knew, if we found out this before the auction,

so I sent a legal pack to our solicitor, spoke to my financial adviser,

everything was fairly straightforward.

Just a little bit of work once we bought them and that's it.

Now they're going to be split legally into two separate entities

for future refinancing or selling.

-It was obviously clear in the legal pack.

-Yes.

But if you didn't read the legal pack...

You wouldn't have been aware of it.

This experienced duo made sure to go to a specialist mortgage company

who provided them with a mortgage across the freehold of the two flats.

With a tight deadline of 21 days to complete, arrange finance and get a survey,

these two were prepared because they read the legal pack.

They could have lost their deposit and property if they hadn't.

What are their plans for this promising pair of pads?

Downstairs flat, we'll have the electrics upgraded

and then there's about ten metres of rising damp to cure.

That work's going to start on Monday, take two days.

After that, there will just be decorating, carpets,

and then get that rented.

In the bigger flat, this one, it is going to have the electrics done.

We're going to convert one of the rooms into the master bedroom.

You can still have the option of having this as the dining room

and that as a lounge, but there'll be a wall up.

It gives you a better option for bedrooms.

-What about kitchens and bathrooms?

-They're all in good repair.

Nothing wrong with them whatsoever. Freshen them up and that's it.

The couple have set a modest budget of £4,000-£5,000.

The guys who work for them are currently renovating another

of their properties and will then spend three to four weeks

on these two flats, getting them ready to let and generate some income.

So, another property for Anthony and Carol to add to their portfolio.

And a jolly good one it is too.

I'm glad they spotted those potential issues in the legal pack

and have got them sorted.

Still, can they really do this place up within that timescale

and that fairly limited budget?

You can find out later in the show.

Still to come, we go back to a stunning listed house

we first saw two years ago.

I only had one word...

perfection!

Back in Northumberland, these two flats turn in a decent profit for Anthony and Carol.

-That's really good.

-Higher than I thought.

-Higher than I thought too.

But first, in Chatham, Kent,

we find out if one house has become two.

Back now to Chatham in Kent.

Earlier, this three-bedroom detached property

had sold for 184,000 at auction

to Rohit, a retired dentist, and his pharmacist brother, Dev.

Their plan was to renovate and rent it out.

But there was more to this place than first met the eye.

It came with this plot of land to the side,

perfect for building on, perhaps.

Do you intend to build a house on the site?

We're not entirely sure yet. We've got two choices.

Obviously, we could get the full planning permission

and sell it off as a building plot to a builder,

or perhaps build ourselves and then we'd have two properties on the site.

-Have you ever built a house before?

-No, that would be a new venture.

It would certainly add to the value of the property,

but it is a major undertaking.

So let's return now, four months later,

and it's pretty clear they haven't built on it yet.

They've kept things simple and concentrated on bringing

the inside of the existing property up to scratch.

# Wherever you go, I want to be there

# Whatever you do You know I'm going to be there

# It's pure and simple I'll be there for you

# Pure and simple Going to be there... #

Remember, they plan to let it out

so they have very much left it as a blank canvas for whoever moves in.

Rohit couldn't come along, but Dev talks us through the work in the front room.

In the living room, basically, what we decided to do

was leave the ceiling as it was and just paint over it.

There was a fireplace, gas fire in the chimney breast,

which we felt was quite old.

We had the gas fire removed, plastered over

and basically the whole room was redecorated and re-carpeted.

Although nothing too fancy has been done, it's fit for purpose.

The whole place has been rewired, replumbed

and a new boiler's been fitted.

They've also replaced the roof but not everything needed doing.

The windows were in good condition

so they didn't have to be replaced, that was a major saving.

Behind the wallpaper when it was stripped,

was in very good condition.

We did expect some problems but actually, quite minor problems.

All it needed was a little bit of filling and sanding down and repainting.

Overall, very pleased with what we found.

They opted not to replace the kitchen

which surely helped their £30,000 budget.

The kitchen, we did think about replacing

but we decided that the current kitchen was sufficient for this purpose.

It's all good so far.

Have they had any thoughts about that plot of land and what they're going to do with it?

Originally, it came with outline planning permission

but the diagrams were very poor.

We resubmitted the diagrams and we're hoping

to get planning permission for a three-bedroom property.

We have a choice of either building it or dividing the land

and selling the plot off as a potential self build.

It's a valuable asset

and the potential return on the property didn't stop there.

They've also decided to rent out the two garages as well

and reckon they can get £15 a week per garage.

Obviously, building a brand-new house will be a huge cost

but for the work on the existing property,

they'd hoped to spend less than 30,000.

Did they stick to that?

We came in at 21,000.

That includes finishing the garages off, preparing the garage roof,

dividing the plot, so the fencing goes in between.

That was considerably less than we expected.

The architect fees came to 3,500.

We had budgeted for 5,000, but it came in as 3,500

so we're well under budget.

We asked two local property experts, including the one

who viewed it last time, to give us their opinions of the work here.

Feels very fresh, there's obviously been quite a lot of work done here.

I can see there are nice new ceilings.

The paintwork's clean and tidy.

I've seen quite a few changes from what it was before

and he's done a lovely job, made it all neutral

and something somebody can come in and put their own print on.

On to values, then.

As it is now, how much could it fetch on the resale markets?

Remember, the brothers paid 184,000 at auction

and have spent £21,000 on the work,

making a total outlay of £205,000.

If I had to value this property as I see it today,

I would be estimating the valuation to be around the £200,000 mark.

If I was to put this property on the market for sale today,

I would expected it to achieve anywhere between £200,000-£225,000.

A lot more than I expected, I have to say,

so I'm very pleased with that.

That top figure of 225,000 would net them a twenty grand profit,

minus the usual tax and fees.

But they also have the potential of the land next to it.

So what could that be worth with planning permission granted

or even with another house built?

If I had to value the land by itself as a potential building plot,

I'd suggest a valuation around £90,000.

A dwelling built on that piece of land,

a semidetached to this property here, I would say

would probably be not too far from the valuation of this property.

Around the £200,000 mark.

I would think that if the full planning permission was agreed

on the land, we would be looking at around £80,000-£100,000.

If they put a three-bedroom semidetached house on there,

I would expect that to achieve £225,000.

On the land, I'm quite surprised with the valuation.

I would have expected something in the region of £50,000, possibly 60,000,

so I'm absolutely delighted with the valuation.

They've already had some estimates of around 75,000

to build the property,

so potentially another 150,000 worth of profit,

again, minus fees and tax.

But that's all in the future.

For now, Dev and his brother Rohit plan to rent this place out.

What income could that generate?

A three-bedroom semidetached house in this area

would rent for £800-£900 per calendar month.

A three-bedroom property around here

would rent for around £825 per calendar month

to £850 per calendar month.

Fortunately, we've already got a tenant

and we are going to get £850 a month.

So they've got their figures spot on, with a yield of nearly 5%,

and if they ever do sell or even build that other house,

they can rest assured they're sitting on a nice little nest egg.

Back in 2011, I visited an intriguing Grade II property in Camberwell,

south-east London.

With the lovely park nearby undergoing massive regeneration,

the location was certainly promising.

The park is undergoing a transformation.

How far do you have to go

to find a property that's in need of much the same?

Not very far at all.

In fact, the property I'm here to see is just here.

It's a grand Georgian semidetached and a guide price of £330,000.

Straight away, we know no matter what it's like inside,

it's got great views.

Great views but not a great entrance.

These semidetached Georgian houses have their main door

upstairs on the side.

In this case, it's blocked off so I'm heading for the current front door,

which is in a rather dingy-looking ground floor extension.

The house is spread over three floors.

It has a characterful but tatty facade

and on the face of it seems like a lot of London property for £330,000.

Bit of a shame, for such a grand house,

that you have to gain access, at the moment,

through this downstairs and fairly unpleasant rear entrance.

It doesn't get any better when you get in because this,

believe it or not, is the kitchen. It's just horrible.

Very low ceilings.

You've got a strange roof light thing going on there.

And then down into the living room... And this head height thing -

what is going on here?

There must be about two inches above my head so about six foot.

Not good at all. And it continues all the way over this ground floor.

The good news is there is a reasonable amount of floor space.

I wonder if there is a way of raising this ceiling

because then it would give it a much better feel.

Also, maybe there's some playing around with layout you could do

and I think one of the keys to that is what we find in the garden.

So what have we got?

We've got this strange corrugated roof, lean-to affair,

which is definitely ready for demolition, but then good news -

this fairly flat area, which has got a concrete base,

which would be the ideal spot for some kind of extension,

extending the kitchen and living room to create something,

maybe with a glass roof - really make the most of the location.

That may well be within permitted development rules.

However, the house is listed and therefore you're going to have

to go through listed building consent before you do anything.

The downside could be that it's going to eat away into the garden.

Actually, it's not going to be too much of an issue.

It's ginormous.

No, really.

I mean, can you see how far it is? Fantastic space!

And for a sort of property in a location like this,

the garden - perfection!

# This could be a perfect place

# This could be a perfect place. #

Back inside, there are two more floors to explore.

First, the upper ground floor.

So, upstairs and the first thing, I'm delighted to say,

finally, we get a bit of head height

and also some hints to the house's Georgian past.

This staircase here, classic Georgian design.

And space starts to get really exciting.

You've got a big front bedroom there.

That actually, believe it or not, is the original front door

and the original front doors themselves are here.

I'm sure listing people would want you to put that kind of thing back

to recreate the grand entrance this place once had.

Both these rooms are being used as bedrooms

but would have been impressive reception rooms

when the house was built.

On the top floor of this three-storey building

there are two bedrooms - one at the front and the other at the back.

Both are packed with period details,

although lurking under dingy decor and hardboard.

Squeezed in between them is the only bathroom, so where is the loo?

Well, that's back down on the lower ground floor.

It's pretty obvious that a major reconfiguration is needed

but the sloping floors and bulging ceiling

will undoubtedly be more pressing.

Even if it was bought for anything like the guide price £330,000,

in a listed building renovation, costs can quickly spiral.

Well, there are clearly some structural issues with this place

but you know what? Allow yourself a decent enough budget

and you can sort out any problems there may be.

And what you would end up with is a pretty fantastic house

in, I think, a lovely location.

Can't go wrong. Let's see who agreed when it went under the hammer.

Move on now to lot 65.

Who would like to give me a start on this?

350 anywhere? How much?

-330.

-OK. 330, down here.

335 anywhere? Thank you.

335. 340.

345. 350. Yes. 355.

360. 365.

370. 375.

380, sir? 385.

390. It's against the gentleman in the middle.

Bids at £391,000.

Anybody else? 392, back in. 393. 394, more competition. 395.

396. 397.

No? 396 for the first... 397, back in the room.

398. Where is he? 398.

399. 400,000, sir?

401. 402. 403.

404. 405. No?

404 for the first, 404 for the second,

404 for the third and final time. All done?

-GAVEL BANGS

-Sold. 404. Well bid.

That hard-won bid of 404,000, 74,000 over the guide price,

was made by restaurateur and caterer Charles

and his wife Tima, a hotel reception manager.

They are looking forward to their first baby's arrival

and are currently renting in Notting Hill,

so this will be a new home for their new family.

I caught up with them at the property.

Charles, Tima. Lovely to meet you both. Congratulations.

-Thank you very much.

-Tell me why you wanted to buy this house?

When I saw a picture of a lake...

..I thought, "That can't be right!" Because I knew the area.

We drove down here and I just thought it's astounding.

Got a lake outside the front and parkland down the side and the back.

Why were you so passionate about buying it?

Because it's our first home.

And it's really hard to find something like this in London.

I mean, there's quite a bit of...

What shall we say... slope in the floor.

-Yes. Yes.

-Not a problem?

-Well, no.

If there was a problem there would be great big cracks up the wall,

wouldn't there?

Charles may seem blase about the bowed ceilings

but this is not the first period property he's renovated

and he's built up good contacts for restoration work.

So, tell me what you're going to do to sort it out?

We haven't quite made up our minds how to use the rooms.

Being a caterer, restaurateur,

the kitchen's the centre of the universe.

I'd like to spill out from the kitchen into the garden.

So that requires permission to open the window,

which we may or may not get.

And then do we have this as a reception room?

Do we have an extra bedroom downstairs?

Where's your main bathroom going to be, then?

There will be... We don't know yet.

Sometimes you can have too much choice.

I do hope they get the layout right when they finally decide on one.

What will influence what you do, Tima?

Well, the amount of people that are going to live here!

-I'm not sure what she means by that!

-THEY LAUGH

I think, Charles, how big your family is going to get!

A four-bed might be a good plan.

He was hoping £100,000 and six months would do it

but I felt there might be an issue with that schedule.

There is also one small thing - you are actually having a baby!

Which might kind of divert attention for a little while, perhaps?

-Perhaps.

-Perhaps.

12 months later, when we first return to see it,

the house had undergone a remarkable transformation.

The scaffolding was still outside

but it was now most definitely a superb family home.

Charles and Tima's daughter, Valentina,

was already nine months old.

Being both new parents and having a whole new house to fix up

was quite a demanding combination, and this was no ordinary house.

I've done buildings like this before, and from this period.

With hindsight, I was too confident.

This particular building is far more fragile than I'd appreciated.

Although plenty of the problems were visible when they bought it,

they soon discovered the drains needed replacing,

which only added to the cost.

Don't forget, this house is Grade II listed,

which added a whole new dimension to the renovation.

If 75% of the original exists, you must restore it.

It was time, it was money, it was frustration.

The care and attention to period detail might have taken more time

but the results were simply stunning.

The top floor was now two beautiful bedrooms.

Valentina's looked out over the park at the front of house.

Charles and Tima's bedroom is at the back, overlooking the garden.

Between them is a brand-new family shower room.

Really, every room has a special thing.

Sometimes I think myself that - what's the best in this place?

And every time I find every room has its own character.

On the ground floor, the bedsit-style front room had been transformed

into a glorious sitting-room that was full of character.

At the back Charles decided to put his all-important kitchen

on this level rather than in the basement.

He'd waited seven months for planning consent to convert the basement

that was now going to have a revised layout.

It will be a bedroom at the front and a large bathroom at the back,

a utility room and then you will go into what will be a day room,

an office or another bedroom and that will open out into the garden.

Charles's initial £100,000 budget had disappeared fast

and was only set to increase.

By the time the extension has been built, the budget will have doubled

and I'm hoping that the value will show through. We shall see.

And so will you if you stay tuned for our return,

a full two years after they purchased it,

to see how magnificent the completed house is now.

It's been a while since we saw those properties.

Have the new owners been busy bees?

Or have they stopped dead in their tracks?

Let's go back and find out.

Blyth on the Northumberland coast is currently undergoing major

regeneration, with lots of new residential properties,

plus refurbishment of the seafront and harbour.

Earlier in the programme the two flats in this mid-terrace were

bought for £100,000 by local property developers Anthony

and his wife Carol.

The couple already own the neighbouring ground-floor flat.

This experienced duo had a very clear idea of what needed

to be done to the two new acquisitions.

The downstairs flat, we will have the electrics upgraded.

Then there was about 10 metres of rising damp to cure.

Then there is the decorating, carpets, and the bigger flat,

this one, again it's going to have the electrics done.

We are going to convert one of the rooms into the master bedroom.

-What about kitchens and bathrooms?

-No. They are all in good repair.

Nothing wrong with them whatsoever. Freshen them up and that's it.

They had set a budget of £5,000, which included £1,000 as contingency.

Five weeks later, we return to Blyth.

The two flats are now finished

and tenants are set to move in in a few weeks.

The flats have been decorated and carpet laid.

There are just some new kitchen appliances in the ground floor flat

but that was about all it needed.

The upstairs flat is on two floors.

I'm delighted the landing on the lower level has retained

this fabulous staircase.

-And there is a new bedroom.

-This wall is new.

This used to be one huge room.

We decided to reinstate the wall to make a huge master bedroom

and we also had to reinstate the doorway into the bedroom

and by doing that, it makes the property into a four-bedroom property,

which is a better use of the space than what it currently had.

On this floor, there is a new bedroom and the two smaller originals.

Whilst up in the attic, that bedroom has been redecorated

and the dormer windows restored.

Anthony and Carol thought they would have to install

a new damp-proof course on the ground floor,

but just when they thought they were on top of everything,

the unexpected happened.

The big challenge, once the damp-proofing work was done,

the skirting boards were taken up and the hardboard covering

the floorboards, that's when we discovered there was woodworm.

So half of the floor in the lounge downstairs had to be replaced.

Half of the floor in one of the bedrooms had to be replaced

and the rest of the woodwork had to be sprayed

to make sure that was free of woodworm as well.

And there was another cost they didn't see coming

in the entrance to the first-floor kitchen.

We replaced the doors.

Some of the doors of the property, in some places,

like here, there was a total height glass panel door

that didn't contain safety glass.

I probably would have changed that anyway

but it was also a requirement of the mortgage company.

It's peace of mind, really, to have a safety glass door

because in a property of this size,

there's probably going to be children

and we want to make sure that everything is safe.

No question about it. I'm always very concerned when I spot any glass.

Do always check that it's safety glass.

They'd set a budget of £5,000, which included £1,000 contingency.

What effect did the unexpected woodworm have on the budget

-and time scale?

-The budget went up a little bit.

Didn't really affect the timescale

because we had plenty of time to renovate the property anyway.

The budget ended up at £4,600, so with the £100,000

they had paid at auction, that takes their total investment to £104,600.

Separate leases have been drawn up for each flat

and the couple have tenants lined up for them both.

We invited two local estate agents along.

What do they think of the finish and the potential for the two flats?

First impressions of the property,

it's been decorated to a high standard.

Nice neutral colours throughout.

This would fit into the local market very well.

It's got a lot of space, a lot of contemporary living space.

Obviously, extra bedrooms with a new wall

being put up in the upper floor flat.

What resale valuations could these flats achieve?

Let's start with the ground-floor flat.

For the ground-floor flat,

we would look for a resale value of £65,000 to achieve around £60,000.

I would say the ground floor

to go on the market for a resale of £75,000

to try and achieve between the £75,000 and the £70,000.

We thought about £65,000. I think realistically that's its money.

I don't think 75 would be achievable.

And for the maisonette flat?

For the first floor flat, we would look to market

the property at £89,950 to achieve around £85,000.

I would consider marketing this property at around about

the £95,000 to try and achieve between the £95,000 and £85,000.

85 and 95 for the maisonette, that's really good.

-Higher than I thought.

-Higher than I thought, too.

If the ground floor flat were to sell for the £65,000 that Anthony suggests

and the upper flat were to achieve the higher figure

of £95,000, there would be a profit of £55,400 before tax and expenses.

The estate agents thought the ground floor flat would rent out

for between £400 and £425 per calendar month.

-400, 425 is what we thought.

-We're getting 425.

-We got 425, yes.

The first-floor flat I would look to rent for £450

to £475 per calendar month.

The upper floor flat I would try for the £500 per calendar month.

Again, we are at the top end with 495.

£495 is what it's being rented at.

Which is what we thought would be the market rate.

Once both flats are let,

they should generate a yield of around 10.5%.

That is an impressive return

and another property to add to the couple's growing portfolio.

They are highly experienced,

so what advice would they give to a rookie developer?

There is always something that will crop up,

especially on an older property. The woodworm came up on this one.

It wasn't a major job, but it still had a cost to it

which stopped us doing a few other little things.

But if anyone wants to do it, especially on older property,

just be aware and have a contingency plan.

We return now to Camberwell in south-east London,

to a property that overlooked this park and lake

which we first showed you back in 2011.

This grand Georgian semi was bought for £404,000 by restaurateur

and caterer Charles and his wife Tima, a hotel reception manager.

The couple were expecting their first child and Tima thought

this three-storey property would be an ideal place to live.

Why were you so passionate about buying it?

Because it is our first home

and it's really hard to find something like this in London.

Tell me what you are going to do to sort it out?

We haven't quite made up our minds how to use the rooms.

Being a caterer, restaurateur,

the kitchen is the centre of the universe.

I would like to spill out from the kitchen into the garden.

They had set a budget of £100,000 and when we first returned

one year later, their baby Valentina was already nine months old

and the top two floors had been beautifully restored.

It had taken seven months to get planning consent

for the basement conversion.

Charles had decided to put the kitchen on the first floor

rather than in the basement and he'd also revised plans for down there.

It will be a bedroom at the front, a large bathroom at the back,

a utility room and then you will go into what will be a day room,

an office or another bedroom and that will open out into the garden.

It sounded fantastic

but Charles's initial £100,000 budget was set to double.

Now, nine and-a-half months later, the rear extension is built.

The basement now provides

all the extra accommodation the family require.

# It's amazing

# It's amazing All that you can do... #

Amazing indeed.

The lack of head height in the basement has been resolved.

# Now it's up to you. #

The new bathroom is elegant

and captures a period feel just right for the house.

The changes we've made have been mainly concentrated downstairs.

We have tweaked upstairs but mainly downstairs and outside.

We have demolished the old extension,

apart from the original front wall,

and built a new extension on the back of it.

We now have a serviceable bedroom and a nice bathroom.

We have a utility room and a second reception room,

which is...garden room is what we call it.

It is a narrow room that runs from the door that once

led into the basement right the way round into the garden.

It could be configured as a study or even a fourth bedroom.

Restaurateur Charles has even got a wine store.

Just as well, because there is now plenty to toast

throughout the house.

A garden of this size in London is a real bonus.

It looks like Valentina is enjoying it

and Charles was keen for his kitchen on the first floor

to benefit from the outside space as well.

We have put a balcony off the kitchen,

so you now step out from the kitchen

into the garden and that means that activity is all on this floor.

It means that from the front door on this floor

there is the living room and the kitchen.

While upstairs on the top floor

are the two family bedrooms and the bathroom.

The top two floors haven't dramatically changed

since our last visit and they didn't need to.

However, Charles has added this impressive new fireplace

in the lounge which, like the house, he bought at auction.

Restoring a Grade II listed property of this size can't have been cheap

and Charles's initial budget of £100,000 had already doubled.

So what's the final figure looking set to be?

We were going to approach 200,000, which we did,

and I managed to spend some more.

We are looking at about £250,000 now.

With the purchase price of 404,000,

that takes the total investment here to £654,000.

Apart from the extension and patio area,

there is now a new driveway and a specialist blacksmith

has made railings true to the period of the property.

Charles discovered that buried in the garden

there were lots of original bricks

from when the house was damaged in the war.

His builders used them in the extension.

What did two local property experts make of this lovely restoration?

The extension adds great value to this property.

It provides the extra rooms and the extra space.

It could be used as a three-bedroomed house with a study

leading on to the garden or as a four-bedroom with a study

now turned into a bedroom.

The layout and the size of the property is amazing.

Very, very big property. The way that it's a 3/4-bedroomed house,

ideal for a family.

I think the changes have been great.

The features they've put on help restore it to its former glory.

For this type of property, character features are essential.

It's what everyone looks for in this type of house.

I wonder if there's much rental demand for such a magnificent house.

Just how much income could it generate if let?

This property could rent out for around £2,000 per calendar month.

This property could rent for £3,500 per calendar month.

A potential yield of between 3.5% and 6.5%.

The lower figure surprises me.

Because, obviously, we had to rent before we moved in and we were

paying that for something not much bigger than the basement.

The higher figure is OK, not that we are renting, of course.

Could the property be worth over the £654,000 that Charles has invested?

This property could expect to achieve

anything around £800,000 to £850,000.

This property could resell for £950,000.

So a potential profit of £146,000 to £296,000

before tax and expenses. Is Charles pleased with that?

I would have been disappointed

if they'd said much different from 800 to 850.

I thought that was a reasonable value.

If we got 950, I'd be absolutely delighted.

That extra money spent has been worthwhile.

I'm really blown away by the look

Charles has created with this restoration.

It's never easy with a listed property

but he has pulled it off absolutely magnificently whilst retaining

that all-important homely feel.

It was a key driver in the whole thing, to create a home.

And I think we've done that.

And the way Valentina responds to the lake

and the park and the garden is great.

We tried to be honest to the period

and I hope people feel we've succeeded in that.

It is a really nice cottagey feel.

You move very comfortably within the floors, within the rooms,

and that is the sign of a good building, for me.

Join us next time for more amazing auction highs and lows.

Will the buyers make huge profits or a loss?

-Will you be jealous or relieved you didn't bother?

-See

-you then. Goodbye.