Episode 67 Homes Under the Hammer

-Hello. Welcome to the show.

-We all know that the value of properties

can go down as well as up.

So it pays to buy at the right price in the first place.

And one way you can do that is to buy your home under the hammer.

If you're sitting at home thinking,

is now the right time to buy property?

The thing is, you'll never be quite sure.

So sometimes, you've just got to go for it.

On today's show, three bidders have already put their money on the line.

Here's what they bought.

This fabulous Folkestone flat finds a buyer who is willing to risk all.

It was a dangerous decision.

The question in Edmonton, London is,

can a paramedic use his skills to resuscitate this tired two-bed terrace?

In Willaston, Cheshire,

a first-time buyer has a very demanding renovation schedule.

-What is the sort of timescale for this?

-I would like it done tomorrow.

All these properties were bought at auction.

We'll find out who bought them and for how much

when they went under the hammer.

# Underneath the sky

# Underneath the sky again

# Underneath the sky again. #

This is Folkestone on the South Kent coast.

Once a holiday resort and ferry port,

now it's home to the Channel Tunnel

and a regenerated town centre, which really lives up

to its name as the cultural quarter and I reckon it's a perfect place

to see if there are any property bargains bobbing around.

The property I'm here to see is a flat right here on the seafront.

As far as locations go, it's a winner!

The building itself, well, it's a bit of a love or hate moment

since it's this 1970s' tower block.

Now, don't judge too soon.

These concrete structures have their virtues.

Lots of space, lots of light

and I'm hoping a lot of property for the guide price

of £110,000 to £115,000.

If you think it looks more like an office block than somewhere

to live, then you'd be right,

since it was originally offices for an insurance company.

Today, security is still paramount with key fobs and codes

and multiple doors to get into the beautifully maintained lobby area.

Going up...

# Everything is going up. #

..to the seventh floor, and already first impressions are pretty good.

Just look at that view!

I'm really impressed so far with the communal areas.

So often, it's that that lets a property down. But, wow!

The geography of this place. It goes that way, that way.

It feels really spacious.

Quite '80s in its decor, but really clean and tidy.

The kitchen, I mean, you know, you could rent this out immediately.

Clean as a whistle. It really is. Through into the lounge.

You've got the most enormous room here. It is huge!

I did think possibly you could move the kitchen into here,

but why would you bother?

Potentially, I might take that wall out, but look, you've got one, two,

three, four huge windows with the most unbelievable view of the sea.

I mean, it's breathtaking!

What you have here is a panoramic view of Folkestone. It's awesome!

# Ease your feet off in the sea

# My darling it's the place to be. #

A lovely townscape on your right, but fancy a sight of the sea?

Just look to your left.

Coming up here feels like you've escaped into another world.

It would be almost like living in a plush hotel.

Away from the crowds, but right in the heart of the town.

On a practical note, next to the living room and kitchen,

you've got a loo and utility area.

And then a reasonable double bedroom down the corridor

followed by another OK double and a family bathroom.

So out of the three bedrooms that you get with this flat,

this one is the largest. It's the master.

It comes complete with bedroom furniture, if that's your kind of thing.

And it's got a really nice little ensuite bathroom through here.

Again, it's just so clean and tidy everywhere.

But the best bit about this flat is the amazing view

looking out on to Folkestone beach.

It's just sensational. Have a look.

Go on, out you go.

The fantastic views and superb communal areas

even include a roof terrace.

This outside space is a little bit tired,

which is the first downside I have found.

The communal areas in this block are beautifully maintained

and having a lift to the seventh floor is a must.

But these things don't come for free

and the service charge for this flat is staggeringly huge.

In fact, it's £5,000 a year.

Now, I couldn't quite believe that when I heard it

because that is steep even for central London

and will make this place so much harder to sell on

and slash your profit if you are hoping to rent it out.

The sun may be shining but I can see storm clouds ahead for whoever bought this one.

# Warning

# Danger. #

As if the £400 a month service charge wasn't enough, there's no parking.

That might put a lot of people off.

What does a local agent make of this unusual lot?

The building is very well located, close to town.

It's very well maintained.

The main selling point of this flat is its view, its location, its space.

The service charge in this building is pretty high.

In fact, it is certainly the highest in the area.

It would make it very difficult to rent the property viably.

How would he value the property?

It's a lovely property and in another location

with a lower service charge it would be worth a lot more.

But as it stands, about £125,000.

Could a make-over improve its value?

If you ripped out the bathrooms and kitchen and put in

state-of-the-art modern facilities, perhaps you could push to 140 or 145.

But that would be the absolute limit.

What rental could this property command?

The rentals in this area for this sort of property,

given the limitations of parking, would be around £725 a month.

Amazing views, amazing location, amazing flat.

It's just that service charge

that's the fly in the property developer ointment.

Let's find out who wanted it anyway at the auction.

Lot 99, we go to now. A three-bedroom apartment.

Excellent views from a landmark building. A stunning building.

Do I see £110,000 anywhere just to start me off?

£110,000. 110.

It's in the room and it's going to be sold. 110, I've got.

115 now do I see? 115. 115 and 120.

120, do I see? At 115 I've got.

118 I'll take, if it will help. Are we all done? £118,000 bid I've got.

120 now. 120.

120 and two. And four. 124.

And six. And eight. 128. 128.

126, I'm obliged.

At £126,000, sitting down in the middle there.

At 126 for the first time.

126, unless I get another two, for the second time.

Third and final time for £126,000, Are we all done?

To the blonde lady at 126.

Against you at the back. Are we all done?

126, madam, it's yours. F947.

Thank you.

# Seaside woman. #

And the successful bidder was Fiona,

a part-time developer from the local area.

Her successful bid was 126,000.

Fiona, lovely to meet you today.

I have got the biggest smile on my face. I love this flat.

I think it's amazing.

I know. We were very lucky, actually.

When I went to auction, this was not a property I was looking at.

-I had not viewed it at all.

-So did you know the building?

-No.

You didn't even know the building. So there you were on auction day.

-Had you read the legal pack? That means a no then?

-That means no.

Yes, no. Purely because I probably read six other legal packs.

There were other properties I was interested in.

My partner was looking at some things as well,

which didn't come to anything.

So I can't read all the legal packs.

What happened next?

I was quite disappointed because it was too nice.

What?

In a real crazy, warped way,

I like to walk into a property that is absolute rubbish

and know that I've actually bought something

that's going to earn me some money.

So, come on, tell me, the biggest downside

to having not read the legal pack is?

-The maintenance charges.

-Go on, hit me with it.

-5,000.

-That would make me cry.

-Yes, it made me cry.

-There you go.

-You've been stung with that.

-Yes.

That is probably why this ended up going to an auction in the first place

because not many people that own a three bed flat in Folkestone

-would want to be paying five grand a year.

-No.

That £5,000 service charge certainly is a sting in the tail for Fiona

and I'm concerned it will affect the property's value.

How are you going to add value here?

At the moment, as nice as it is, if it was going to be for rental

purposes, I probably wouldn't do very much to it.

But the situation in Folkestone is, we do have people

coming down from London now and we have the fast train link.

There are a lot of retired people

that want to live in properties like this

for the security and the views, obviously.

There are quite a lot of properties out there

so this one has to have an edge.

It's going to be like a London flat, not a Folkestone flat.

Everything will be done to a very high standard.

So I hope when people walk in here, they don't want to go anywhere else.

Everything will be brand-new. The kitchen will have all appliances.

It will all be integrated. It will be high-end.

I'm panicking already.

-I'm panicking.

-You're thinking, money, money, money.

I really am panicking.

Fiona has set a budget of £25,000 and I'm so worried

that she will just simply not get her money back.

# This is a warning

# This is a warning. #

This is the fourth property that has been renovated in Folkestone

and each one has been done...

It was a dangerous decision to make

and each one was probably over renovated.

But we did get the top price for them.

Is there anything you are worried about now that you have bought it

and you have to now put the labour in and the work and the funds?

I'm worried about getting it done on time because obviously,

each month we have the property, we are paying the maintenance anyway.

This is a summer property. Are you going to have this ready by the end of this summer?

-What do you think?

-That was the other problem with the legal pack.

Most properties, as you know, are 28 days completion, which suited us

to the ground because this then would have been on the market now, really.

The legal pack stated that the owners wanted a 60 day completion

so that threw us out by another month, which was really important

because of the weather.

So hopefully, this gets back on the market by mid-September.

But we need a real good Indian summer for that.

Fiona, it's been lovely meeting you today.

I cannot wait to see what you do here. It's a great property.

-Well done.

-Thank you.

Can you believe it? Fiona was disappointed with this lovely flat!

I do understand how she feels.

I love to see a transformation but there is scope to improve here.

She just needs to be careful not to overspend.

You can find out how it all goes later in the show.

Welcome to Willaston in Cheshire.

An idyllic little village with links to nearby Nantwich and Crewe.

An affluent area, popular with buyers and renters alike.

On the surface, Willaston is like many other little villages

but go digging around and there is a small difference.

So why once a year do people from all over the globe

descend on this normally peaceful Cheshire village?

Well, that's because Willaston is the home

to the annual World Worm Charming Championships.

# Can you dig it. #

What do you mean, you've never heard of it?

The Worm Charming World Championships!

If you haven't, you must be living under a rock.

The mind boggles at what that might actually mean,

but at least you can be sure that

if you move to this village, you would be surrounded

by down-to-earth neighbours with charming personalities.

# Can you dig it. #

And so I worm my way down the street to take a look at the property

that was up for auction and it's this three-bedroom semidetached.

It had a guide price of £115,000.

It looks like quite a lot of property for the money.

There's only one way to find out. Let's get a wiggle on!

So, what's on offer? Well, fairly standard layout.

Stairs up to your bedrooms there and then through into your living room.

It's lovely that you've got this bay window.

It looks like it needs a bit of work but lots of light flooding in here, which is nice to see.

The fireplace could do with modernising

but my eye isn't actually taken by that.

It's taken straight down here.

Look at this. Nasty.

It doesn't feel particularly damp but something is seriously going on there

that would need to be sorted out.

Let's hope it doesn't carry on through.

Possible signs of why the guide price is just £115,000 then.

It is, however, a good-sized living room.

And the bay window adds a little character.

Well, it's not a bad size kitchen.

Clearly in need of some updating for sure.

Although, this brick look is very in fashion at the moment.

Just...it's not normally just bricks that have been painted!

A useful under stairs area there.

So a bit of playing around here and that would be OK.

Where it starts to go a bit wrong is the fact that off the kitchen

is the only bathroom in the property.

This here is the wall that had those problems.

You come into this bathroom and, boy oh boy, are there some issues going on.

The floor, if you can see, is actually really badly dipped.

I don't know what's going on because it's obviously had some major issues

and I wonder if this was the start of the problem

and that's led to those problems next door.

Either way, this needs to be investigated and I bet once you start digging down here,

you are going to unearth yourself a whole heap of problems.

# Welcome to my nightmare. #

A sloping floor can certainly spell trouble and expense.

Move upstairs though and things look brighter.

A good-sized bedroom at the front.

And two smaller bedrooms at the back mean that whoever buys this house

might want to pinch some space for an upstairs bathroom.

Well, at the rear of the property you've got this little outbuilding,

which in itself is actually quite pretty with these bricks, but if you look at what next door have done,

they've built an extension incorporating this, which is definitely a good way to go.

You've certainly got enough space, not only with that,

but at the rear here where there is this really nice sized garden.

It needs a bit of tender love and care, but lots of space to be playing with.

A house that is in need of some TLC then.

But with a guide price of just £115,000 in such a popular area,

this could be a real opportunity for the right person.

Does a local estate agent agree?

The property has got great potential.

With a neat finish and good presentation, it would be perfect

for young buyers or tenants looking to move into the area.

The current layout of the property isn't ideal for the family buyer.

But certainly, moving the bathroom from the ground level

to the first floor would be an excellent change.

So who would this property appeal to?

Market conditions are very strong in this area.

Very popular with local buyers

and a number of couples and families are looking to move into the area.

If the house went for anything like the guide price of 115,000,

even with the work to be done, there could be a good profit here.

What kind of rental could it achieve in this popular area?

In my opinion, this property will rent for a figure of £695 per calendar month.

Once the refurbishment is done, how much could we expect to sell for?

Once this property has been refurbished and the bathroom

has been moved, I would expect to achieve in the region of £175,000.

So a good property? Oh, yes. I'd say a very good property, in fact.

Yes, there are a few issues to sort out like the damp and that bathroom floor.

But a really nice area and a lot of house for that guide price.

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

Lot 40. Three-bedroom semidetached house. It does require modernising.

It's got a driveway and garden and a pleasant village location.

95 then, to get it going? Lot number 40.

95 bid, thank you. At 95,000. 100, can I say now?

At £95,000. Yes, 100.

At 100,000. 105?

£105,000.

106. 107. 108. 109.

£109,000. 109.

At £109,000, are we all done?

110.

111.

112.

At 112. Seated, against you, standing.

At £112,000. Another one. Be quick.

The bid is at 112 and I'm selling it at 112. Are we all done?

113 anywhere else? If not, £112,000 for the first time.

£112,000 for the second time.

Third and final time at £112,000.

You've bought it, sir. Well done.

Sophie is looking a bit shell-shocked having bought this semi

for £112,000 after her dad Anthony made that final bid on her behalf.

And at the ripe old age of 22,

she's got the key to the door of her first property.

-Sophie, great to meet you.

-Hi, Andrew.

-Congratulations.

-Thank you.

-You look quite excited to have got this then?

-Yeah, really excited.

To be honest, we didn't think we were going to get it,

-thought it would go for a lot more.

-I wonder why it didn't?

There is quite a lot of work that needs to be done

and maybe there wasn't the right people at the auction, I'm not sure.

-Right, but happy news for you.

-Yeah, really good.

So tell me why you wanted to buy it?

Just to get on the property ladder, really.

I've been looking at renting but I think I would prefer to start

a mortgage and just get on the property ladder.

-So this is going to be your home, is it?

-Yeah, yeah.

I wanted to put my own stamp on somewhere as well, really.

My dad's going to help me do it up and a few friends and family.

This sounds perfect for Sophie.

With her job as an assistant manager at a golf club just up the road,

and her family and friends nearby, she won't be short of helpers.

And she'll need them.

# Thinking about tomorrow... #

-It's a big first house, isn't it?

-Yeah, well.

I'd like to add value and then maybe sell it on in a few years.

So, tell me what you're going to do to put your stamp on this place?

I'd like to keep the living room as it is, really.

I think what we'll do is strip it back, dig the floors up,

-put a damp proof course in.

-Right.

While everything is stripped back, rewire,

it needs double glazing, central heating. So, the whole lot, really.

Right, what about layout downstairs?

Obviously you have the loo downstairs and the bathroom, that's not ideal,

what's your plans for that?

I was hoping to move the bathroom upstairs into the smaller bedroom.

Obviously that will make it into a two-bedroom property.

Maybe in time I can extend onto the outbuilding,

but I don't think I'll do that just yet

because two bedrooms is fine for myself.

And probably knock through that wall downstairs

and make it into a big kitchen with a dining table.

Sophie is a girl with a plan and moving that bathroom

and extending the kitchen are both the obvious and right things to do.

# A change

# Will do you good... #

I have to admire her sensible approach.

She's taking it in careful stages and is going to remain

at her parents while the work is going on.

And she's got plenty of help.

Plus she's got a comfortable sounding £20-£25,000 budget.

So what's the sort of timescale for this?

I'd like it done tomorrow,

but I think realistically probably five to six months.

In the meantime you carry on living at home and then party and move in?

Well...something like that.

What's the most exciting thing for you?

Having people round, I think.

Like showing them, this is my house.

Having a barbecue, that would be nice.

-What do your mum and dad think about all this?

-Yeah, they're pleased.

Dad thinks it's a good idea and I think he's as excited as I am about it.

Mum said let me know when I want some painting done so...yeah.

-Good. Listen, congratulations.

-Thank you.

-Good luck with it.

-Thanks very much.

-We look forward to seeing how you get on.

-Thank you.

So, Sophie, not surprisingly really excited to have this as her first house.

It just goes to show it's not just developers and property developers

who get good things at the auction, it's first-time buyers too.

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

Still to come, in Edmonton, London,

a fantastic two-bed terrace with a garden

is crying out for a make-over and a reshuffle.

In Willaston, Cheshire, first-time buyer Sophie

takes a gamble with her three-bed semidetached.

But first, will this high-rise, seafront apartment

overcome its big service charge with a suitably high-end finish?

# Make it... #

We now return to Folkestone in Kent where earlier I met Fiona,

a property developer with nerves of steel.

This three-bedroom apartment with sea views wasn't

originally on her shopping list, but she took a risk and invested

£126,000 with no time to read the all-important legal pack beforehand.

So, come on tell me, the biggest downside to having not read the legal pack is...?

The maintenance charges.

-Go on, hit me with it.

-5,000.

-That would make me cry.

-Yes, it made me cry.

-There you go, you've been stung with that.

-Yes.

Well, Fiona also found out there was no parking and the current vendors

wanted a 60-day completion date as opposed to the recommended 28.

She set a time frame of four to eight weeks and a budget of £25,000

to ensure a high-end finish to pull in the buyers.

We've returned three months later to see if her leap of faith paid off.

The kitchen now looks sleek and modern with a fantastic

American-style fridge freezer and a range cooker.

MUSIC: "Sunday Shining" by Finley Quaye.

The panoramic lounge has shaken off the 1980s' decor

and the service hatch is no more.

# As the morning gathers a rainbow

# I want you to know now

# That I'm a rainbow with you... #

At the back of the apartments,

the master bedroom has been modernised and painted

and its ensuite has a much-needed make-over.

The two smaller bedrooms to the centre of the property have been

re-carpeted and repainted to that high standard Fiona wanted.

# Woah, woah, yeah... #

The main bathroom has a high-end finish too,

with a rather lovely looking spa bath added and a chandelier.

Fiona has transformed this once-dated apartment,

turning it into a modern, chic, seaside pad.

What really stands out for me though is that ultra-slick kitchen.

This room I think has had quite a major change in the respect

that the doorway, I've opened up so it gives it a feeling of space.

Built-in microwave, the range oven and this amazing American

fridge freezer which I absolutely love and lots of wine racks.

So I'm really, really pleased with this

and I think it's brought it up to 2013, whereas it was stuck in 1986.

This former office space turned apartment

has been dragged into the 21st century

by Fiona and her team of builders.

She project-managed from her holiday home in Spain,

but it hasn't all been sun, sea and sangrias.

I've had to change everything, to be honest.

I don't think anything hasn't been changed,

and there's been more changes than were initially anticipated.

And because it was an office block originally,

things like the electrics,

as the guys were trying to feed through the walls,

they were hitting steel girders.

Just... It has been a nightmare, to be honest.

Originally, Fiona was going to knock through to create a kitchen diner.

What happened to THAT plan?

Decided not to go for the open plan kitchen-dining.

So, instead,

I've filled the wall in

to allow maybe for a flatscreen TV on that wall

so that furnishings will then be forced towards the better view

and it opens the doorway to the kitchen,

which gives it that semi-open plan.

So, we've gone 50/50 on that, but I'm pleased with the result.

Originally, Fiona planned to spend

what I thought was a worrying amount - £25,000 - on renovations.

However, after doing the sums,

she revised this down to between £15,000-20,000.

Still generous. So, has she kept to it?

I'd say the budget has reached 18,500. But I think it's worth it.

There's things that we changed that we didn't plan on changing,

and I think, if we hadn't,

it wouldn't have had the finish that it has.

It's taken Fiona ten weeks to get to this point,

so is it time to sell, or would she consider renting?

I would never rent it, because, to me,

once it's rented, it's never going to be new again.

However long it takes, it will just stay on the market

until the right buyer comes along at the right price.

And I will be patient.

I always had a worry that Fiona would overspend on the finish

in here, given that very off-putting service charge of £5,000.

So far, her total spend, excluding legal fees and stamp duty,

comes to 144,000.

That's almost bang on what the agent who came to see it

thought the flat could fetch at top spec.

Yikes!

We've invited two property experts along

to judge just how much patience

Fiona will need.

I saw this property

before the improvements were done,

and I think the owner has made a fabulous job here,

it's absolutely amazing what she's achieved here.

I certainly like the view from the lounge.

Having a double aspect

and a view over the Channel is beautiful.

There is no doubt this flat is in a fantastic position,

and Fiona has made it her vision of a lovely high-end property

with great appeal, but there are storm clouds still on the horizon.

Major sticking points with this apartment are,

one, there is no onsite parking,

and two, the service charges are extremely high.

Let's put it that way.

I get why Fiona doesn't want to rent this apartment out.

Having got it to this standard, she would have to spend money

maintaining it if her tenants were to move on,

which would eat into her profit.

But if she ran out of patience waiting for a buyer,

what would she achieve on the rental market?

If she were to rent out this property, I think

she would achieve around £950 per calendar month.

I think this would achieve around £950 per calendar month.

Giving a rental yield of between 7 and 8%.

But it's only selling Fiona has her heart set on.

To sell properly, I would say about 175,000.

I would suggest a figure of around £165,000.

I think it's quite laughable!

But, hey, that's not a problem at all,

because I actually had one of the residents here

ask how much we wanted for it,

and they were prepared to pay 195, which we turned down.

So, that says it all.

That top figure would give Fiona a pre-tax profit of £29,500.

But she's now got it on the market at £249,000,

which would mean a £103,500 profit before tax and expenses.

So, taking that risk looks like it might pay off.

If something comes up, jumps up,

that you think on the face of it looks good,

then maybe just take a chance.

That's what life's all about.

And someone else who took that chance

did it here in Edmonton, North London,

a bustling and vibrant area of the capital.

It has a varied housing stock.

'30s homes, modern blocks and charming terraced houses,

and some open spaces.

This is a part of the capital

that could yield some interesting possibilities.

In a city where the average price of a terrace is - wait for it -

half a million quid,

the property I'm here to see sounds like a bit of a steal.

It's this two-bedroom Victorian house,

and it had a guide price of £155,000.

I'm going to check it out.

In these tough financial times,

places like Edmonton become a lot more attractive

to first-time buyers and property investors alike.

-# Money talks

-Listen!

-# Money talks

-Get money

# Dirty cash I want you

# Dirty cash I need you, whoa-oh... #

With a big money redevelopment scheme under way nearby,

and train links into the city, this little two-bed terrace

in the heart of Edmonton could be just the ticket.

So, a little bit dated and tired, but that's how I like 'em.

It quite excites me when you walk into a property

and straightaway you know you can add something.

I wonder what went there!

So, here we have the lounge.

What have we got that I like in there?

Well, for starters, some lovely cornicing.

I'd get rid of those ugly polystyrene tiles,

they'll have to come down.

The fireplace - not fabulous, so I'd probably get rid of that.

Put something more traditional in its place.

Second reception room - again, a great size.

Bit of a woodchip nightmare.

And, saying that, you could probably take this partition out

and have an open staircase.

I know under here there's a great big cupboard,

so you could easily have a bit more space in the room.

Also, if you wanted to, you could knock through here.

You'd need to install some gas central heating,

that wouldn't go amiss in the property.

And then, down here, look -

a really good-sized kitchen, square in size.

It's practical. It's not massive, but you know what?

So far, I think this house works.

# Your love

# Lifting me higher... #

Not only does it have high ceilings

and a nice compact kitchen downstairs...

it also boasts a good-sized garden.

In London!

Upstairs you have a big double at the front...

..a good-sized double in the middle...

..and a large bathroom at the rear. Which gives me an idea...

I reckon if you steal a bit of space from the front bedroom, here,

and this middle bedroom,

and you moved the doorway over

and create an internal bathroom along here,

then you can free up the existing bathroom space

to be your third bedroom.

It's not ideal,

and I do like the layout as it is,

but if you're thinking of maximising your rental and even resale profit,

I think it's worth considering.

There's no doubt that creating an extra bedroom would cost you,

but as the saying goes, you've got to spend money to make money.

With rental prices in London at an all-time high,

it might be tempting to try and buy somewhere to let out.

But here in the capital, unless you have several hundred thousand pounds

in cash knocking around, you have to rely on a buy-to-let mortgage,

and those are still not offering terribly good rates of interest.

Here in Edmonton, however, the dream becomes a bit more of a reality.

With prices not so terrifying and the rental market booming,

you may be able to borrow that bit less

and then reap that bit more in rental rewards.

# Sweet dreams are made of this... #

The guide price of 155,000, while still being a lot of money,

almost makes the dream of entering London's property investment world

a bit more of a reality.

What did a local estate agent make of this two-bed terrace?

My first impression of this property is it needs quite a bit of work,

but it's in a good area and will give a good yield to the owner.

In my opinion, the new owner should be aiming at the rental market.

It's a great location, you're going to get a very high yield.

After a refurbishment is done,

what could be the potential value of the property?

Once refurbished, it would go on the market for £230,000.

And if the bathroom was moved and an extra bedroom was added?

If you were to create the third bedroom

and put the bathroom in the middle of the house,

it would go on the market for £250,000.

And what rental value could we expect?

If it was a two-bedroom house, to go on the market for rental,

it would go on for £1,250 per calendar month.

And as a three-bedroom house, on the market for 1,400 per calendar month.

This is a decent house, with scope to dramatically improve.

Let's see who went for it, and why they wanted it, at the auction.

It's an appealing two-bedroom bay-fronted mid-terraced house.

Requires modernisation.

Invite your bids. 190, anywhere?

If not, you tell me. 190?

150.

155 anywhere?

155, I'll come to 155. 160, where is it? 160.

165. 170, sir.

170, 175.

180. 185.

186?

No?

185, there. 186, new place.

187. I'll come to you, 187.

188.

189.

With bids overtaking the guide price, we rejoin at 201,000.

Anybody else for lot 71?

201 back here. 202.

202, 203.

204.

205. 206. No?

It's with you, sir, on my right. Bid's £205,000.

Anybody else?

It's against you on my left.

Anybody else? If not, 205 for the first.

205 for the second.

205 for the...206, back in.

207? No.

You said that last time.

206 for the first.

206 for the second.

206 for the third and final time.

All done? Sold, 206.

MUSIC: "Our House" by Madness

And the successful bidder is paramedic and local boy Gary.

He paid 51 grand over the guide price of 155,000,

so will he be able to resuscitate this two-bed terrace?

# Our house

# In the middle of our street...

-Gary, congratulations.

-Thank you.

You must be so pleased that you got this on auction day.

Yes... Yeah, no.

I'd like to have paid a little bit less, but I was quite happy.

So, come on, then, how much did you want to pay?

-Um, 205 was my limit.

-OK, so you only went £1,000 over!

This is about the third auction I've been to,

and I've stuck to that limit all the time.

This is the first time I've brought someone with me

and I got a nudge, and he says, "Go for another thousand."

-Yeah.

-So, I put one more in and I got it.

I wasn't too sure if I'd gone too much over, but I'm happy.

While I don't think Gary's got himself a complete bargain here,

there's so much potential in this house,

I'm sure with this, his first property investment,

he stands a good chance of making some profit.

So, what is he planning to do?

Don't intend to sell straightaway.

I want to rent for at least two to five years.

Hopefully make it into a three-bedroom

and get as max rent as I can, really.

So, tell me, how are you going to move forward

and create that third bedroom?

Um, I had a few ideas.

I was thinking about extensions,

but the cheapest idea I think I will go with is the middle bedroom,

make that into a bathroom - unfortunately there'll be no light,

it'll be a sealed internal bathroom, and have that small third bedroom.

I think it'll be a small bathroom,

but it'll be such a worthwhile exercise.

Maybe a wet room or something like that.

So, when did you come up with that idea?

Um, after talking to an estate agent recently.

What about knocking through these two rooms between the, er...

-two reception rooms?

-I think if I was going to be living here myself,

it would be something I'd definitely like to do,

but I thought, renting it, it would give them an option

of keeping that room separate and doing what they want with it,

whoever rents it, so...I probably will keep the separate room there.

I think, to try and maximise a bit more space,

have all the chimney breasts taken out throughout the house.

One's already been taken out, from the kitchen.

Oh, I don't know, that could be quite a costly exercise.

-I mean, they're big, solid old beasts, some of those.

-Yeah...

And if you were to put a nice fireplace there,

it can actually be a feature.

I don't know. I think, maybe...

see how much money you've got left at the end of the exercise.

Gary has a modest budget of £10,000.

He's given himself four to six weeks to complete the project,

and has taken three weeks off work to get the ball rolling.

Projects like this can be stressful,

but after 25 years as a paramedic,

it must be water off a duck's back for Gary.

Is your job as a paramedic really stressful?

Because I can imagine doing up property is going to be,

a little bit. That's what worries me - how are you going to cope?

It was definitely nowhere as stressful

as waiting for the mortgage completion,

the 28 days you had to buy, that was the most stressful, waiting for that.

It all worked out fine...

So, wait a minute,

so the hammer went down and you didn't have a mortgage in place?

-Um, I had a mortgage in principle, but the...

-But when was that?

How long before the actual auction was that mortgage in principle?

You've got to be very careful, at the moment.

It was well over six months ago I got that mortgage in principle.

Things change so quickly!

I found that out, and it did take a couple of sleepless nights

to get things sorted, but it all worked out in the end.

Brokers were telling me it was very tight,

-and we didn't know we were going to make it...

-Oh!

But it all worked out.

All right, next question. Are you confident, are you ready for this?

Yeah, I don't...

Hopefully, I can't go wrong

if everything goes as it has done from the auction.

-Um...

-Come on, Gary, be a bit more confident!

Is it going to be a good project?

When you come back, hopefully you'll tell me it was all worthwhile.

I'm so excited to see the end result.

-Well done.

-Thank you.

-Thank you.

I don't think anything will be as stressful for Gary

as getting that mortgage.

I'm sure, whatever this house throws at him, he's going to cope.

I look forward to seeing how that third bedroom works.

And you can see for yourself later on in the show.

Well, they say time can be a healer, but it can also be an enemy

if you're up against a deadline.

What has happened to those properties?

It's time to go back, to find out.

We're back in Cheshire, to Willaston,

home of the World Worm Charming Championships,

and also home to first-time buyer Sophie.

This three-bed semidetached house cost her £112,000 at auction.

It's a big first house, isn't it?!

Yeah, well...! SHE LAUGHS

I'd like to add value, and then maybe sell it on in a few years.

So, tell me what you're going to do to put your stamp on this place.

I'd like to keep the living room as it is, really.

I think, really, what we're going to do is strip it back,

-dig the floors up, put a damp proof course in.

-Right.

Um...and while everything's stripped back, rewire.

It needs double glazing, central heating.

So, the whole lot, really.

Yes, that sounds like the whole lot!

But there was more.

She was hoping to add value by moving the bathroom upstairs

and making the kitchen bigger.

She had hoped to get her first phase done within five to six months,

so, spot on six months later, we're back.

Initially, Sophie had no plans for an extension,

but after a rethink, she decided to extend her kitchen space

by knocking through to the old coal shed.

And it looks great.

Sophie has also extended into what was the old bathroom,

creating yet more space for the kitchen.

The living room has been stripped back,

and a feature fireplace created.

Upstairs, the work continues, with replastering

and painting well under way.

I think turning the third bedroom into a bathroom is a fantastic idea.

Sophie clearly still has work to do here,

but what she HAS done has already improved this property.

For me, though,

it's that kitchen extension that really has the wow factor.

So, this is the old coal shed.

Basically, what we've done is -

it was already connected to the house by the roof,

so we've knocked that through and made it into one nice, big area.

And obviously we've got the nice patio doors, leading out.

Hopefully, when we get some nice weather,

we'll be able to have a barbecue.

With the addition of skylights in the roof,

and knocking through into the old bathroom space,

Sophie has created a bright and spacious kitchen diner.

She's also turned the old pantry into a downstairs cloakroom.

So, what else has been undertaken here?

Basically, from the start, everything was stripped back.

The floors have been dug up, it's all been replastered.

Completely redone, really.

Moving the bathroom upstairs -

I didn't really like the idea of having the bathroom downstairs.

I know that I've lost one of the bedrooms, but I think nowadays

in houses, bathrooms are generally upstairs, so, um...

I wasn't too worried about compromising one of the bedrooms,

and I'm hoping the value of the house

hasn't changed too much with that.

And we've also got the small toilet downstairs, anyway -

so, yeah, the best of both worlds.

Sophie originally had a budget of between £20,000 and £25,000.

Has she been able to stick to that?

I have stuck to the budget, roughly, and spent about 25,000-27,000,

with all the flooring and everything included, so, yeah.

Not too bad.

The worst part has been trying to get all the tradesmen communicating!

The plumber coming when he's supposed to, so they can plaster.

Just them all talking to each other

to make sure it all runs smoothly, really.

But on the plus side, it's been nice seeing it all come together.

It's taken Sophie six months to get to this point.

What else is there to do,

and how much longer does she think it will be before she can move in?

What's left to do is to fit the rest of the bathroom upstairs,

all the floors downstairs need to be fitted.

I've ordered the carpet for the stairs today.

I've got a new sofa,

so...can't wait to see what that looks like in the room.

At the moment, I'm planning to move in, hopefully,

within the next couple of weeks.

As I've chosen all the fixtures and fittings,

the plan is to move in, really. Yeah.

I think this is a lovely home

that any first-time buyer would be chuffed to have.

Good job, Sophie.

What will two local estate agents make of this transformation?

The current owners have done a very nice job

with the open-plan family dining area

and the French doors out to the garden.

It seems to be coming along really well.

Some great additions, really impressed with the finish.

Certainly, in the time that we've been away, they've added

some real character to the property,

and it should soon make the perfect family home.

Sophie plans to live in her first home for a while to come,

but anyone who has done a job like this wants to know

if they have spent their money wisely.

She bought this house for £112,000,

and has spent about £27,000 turning it into a lovely home.

Sophie has sacrificed her third bedroom

so she could get an upstairs bathroom,

and she's worried that might impact on the value of the house.

What do the agents think this house would fetch on the market?

Anything like £139,000 investment?

When the property's finally completed,

I would expect to market this property for offers over £135,000.

I would estimate the property to be marketed

at the value of £135,000-145,000.

I think 140 is sort of what we were expecting, anyway.

Um...so we will have broke even, just about, I think.

So, as I'm moving in anyway, I'm not too concerned.

But hopefully, in time, the prices will go up.

Interestingly, the estate agents

thought the house could have achieved £150,000

if it had been kept as a three-bed.

It's all academic, though,

as Sophie plans to move in and make this her home.

How does she feel about leaving Mum and Dad's, though?

I think it's all just become a bit more realistic, now.

It's nearly finished,

and I'm wondering if I've made the right choice.

But I think, when I've moved in, I'll be quite happy.

Now to another first-time investor

here, in the hustle and bustle of Edmonton in North London.

Paramedic Gary, who I met earlier in the programme.

At £206,000, he paid 51,000 over the guide price,

and to maximise his profit margin, Gary wasn't looking for a resale.

He was going to hang onto it and rent it out.

And he thought this two-bedroom house needed to become three.

Um, I had a few ideas.

I was thinking about extensions,

but the cheapest idea I think I will go with is the middle bedroom,

make that into a bathroom.

Unfortunately there'll be no light,

but it'll be a sealed, internal bathroom

and have that small third bedroom.

I totally agree this was a smart move.

However, Gary's other plan wasn't one I thought really necessary.

I think, to try and maximise a bit more space,

have all the chimney breasts taken out throughout the house.

One's already been taken out, from the kitchen.

Oh, I don't know, that could be quite a costly exercise.

-I mean, they're big, solid old beasts, some of those.

-Yeah...

And if you were to put a nice fireplace there,

it can actually be a feature. I don't know. I think, maybe...

see how much money you've got left at the end of the exercise.

Gary planned to keep costs down by doing lots of the work himself.

He had a four to six week timescale.

Four months later, we're back to see how he got on.

# Yeah

# Gonna make it better

# Ooh, yeah

# Yeah

# Gonna make it right

# Here it is

# There's no way to make it better

# Gets you down

-# It's pressure

-Pressure... #

The bathroom has been turned into an extra bedroom.

# Yeah

# Gonna make it better... #

By splitting the middle bedroom, Gary has created a new bathroom.

# Here it is

# There's no way to make it better

# Gets you down

-# It's pressure

-Pressure... #

The terrace has been transformed

from a two-bed to a three-bed property,

but my favourite part is the surprise extension to the kitchen.

The kitchen was a little square box kitchen. We had a door here.

It ended around about here, so we extended it outwards,

three metres out, under permitted development,

and it's worked really well.

French doors leading out to the patio area.

We didn't plan to do an extension, but after we've done it,

I think it's worked out really well,

and I'm really pleased with the result.

Not only did Gary add an extension, but he also opened up the stairs

onto the dining room, and squeezed in a cloakroom underneath them.

So, what else has he been up to?

We decided to do a full renovation on the house, so...

The first thing we done,

we knocked down all the chimney breasts to create a bit more room.

Upstairs, we took where the bathroom was, we made that into a bedroom,

and now it's a three-bedroom house as opposed to a two-bedroom.

And in the middle of two of the rooms we created a bathroom.

It's small, but it's adequate.

Moving the bathroom, building an extension

and creating a third bedroom

must have had an effect on his original budget of £10,000.

Do you know what? The budget was... You know, it was...

That 10,000 was just to do a quick renovation job,

and we ended up doing a lot more.

So, literally every wall has been replastered,

rewired the whole house,

plumbed the whole house, put central heating in.

We had a bit of a delay waiting for the gas to be connected,

but that was the only delay, really, that held the work up.

All that extra work meant that Gary ended up

spending between £14,000 and £15,000 on the house.

He originally set himself a target of four to six weeks

to complete the work, much of which he planned to do himself.

However, he came up against an unexpected problem.

I had an accident towards the end of the project.

I came off a motorbike,

so I had to ask my dad to help me a lot more with the finishing.

Which I'm pleased he did, cos he's a perfectionist,

and he's done a wonderful job, I think.

So, Gary's timescale and his budget grew a bit.

He's gone all out on this project, and he's now spent £221,000.

But I reckon it was worth it - he's done a really nice job.

Will two local estate agents agree?

I think that adding a third bedroom to the property

would enhance the property.

Obviously, two to three bedrooms, the value of the property will go up.

The fact that he's made two good-sized bedrooms, also,

and not two small ones is a very good plus side to the property.

I like the extended kitchen,

especially with the doors opening into the garden.

Very, very spacious, and bright colours, as well.

But does the extra work equal extra profit?

I would put this property on the market

in the region of £265,000-£270,000.

We would be able to achieve something

between £270,000 and £275,000.

With a top valuation of 275,000,

Gary could expect to make a potential pre-tax profit of £54,000.

But it's renting that Gary's interested in for now.

So, what do the agents think he could charge?

You would receive around £1,350 per calendar month on this property.

We should be able to achieve something in the region

of about £1,350-£1,400 per calendar month.

Yeah, I'd be very happy with that.

That's a good yield for the amount of money I've put in.

I've already had an offer higher than that,

but I would be happy with them sums.

I think Gary has every right to be chuffed

with his first investment project.

That higher rent estimate would give him a yield of around 7.5%,

and he has a good asset for the future.

I've been looking at houses already, looking for the next project.

It went so smoothly, apart from my accident,

so I can't wait to buy another house.

Well, that's it for now. We'll be back next time

with more action from the auction rooms across the country.

So make sure you're watching Homes Under The Hammer.

-Goodbye for now.

-Goodbye.