Episode 68 Homes Under the Hammer

Hello. Now, despite slightly confused market conditions,

people still want to grab a slice of the property action.

And if you are prepared to take the plunge,

auctions are a great place to start.

It can be fast, it can be frantic,

but it is interesting to buy your home under the hammer.

Now, some properties are very popular at auction.

Meanwhile, others go unsold.

The auction room can be a very difficult place to conquer.

So, here are the properties that caught

the hearts of the buyers on today's show.

In Cardiff, what a property we have for you.

Great size, nicely appointed, but...

The layout, it's all wrong. It's all wrong, it's all wrong.

And if it's the high life you want, don't miss this flat in London.

I can see right the way across London to South Bank,

and look - that is the London Eye.

In Oldham, this three-bed house is full of surprises.

You probably think you know EXACTLY what I'm going to find.

But no.

All these properties are being sold at auction.

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

when they went under the hammer.

Are you sure?

I'm in Cardiff, capital city of Wales, and in the late 19th century,

Cardiff became the biggest coal exporting port in the world.

These days, the bay area is a modern,

thriving quayside development, and the property

I'm here to see is about three miles away from the bustling city centre.

I'm in Old St Mellons, a suburb east of Cardiff.

It's a popular spot for commuters,

with easy access to the Welsh capital.

And the property I'm here to see I think will be very popular indeed.

It's this.

It is a four-bedroom detached house, which has been extended.

The guide price was 185,000 quid. Let's take a peek.

Hmm, OK, not everyone will like the fake Tudor beams, but there is

actually some real historical authenticity to this building.

Part of it, apparently, once was a barn used for storing carts.

Over the years, the building had a lot of extensions added, so it's vast.

I'm hoping these broken windows don't indicate any problems inside.

So, through a little porch into your main hallway.

It's really nice that there is this big area here.

Gives a really good feeling to the property the moment you walk through the door.

Stairs to the bedrooms there. Lots of little rooms going off there.

And a very odd little room at the front.

I don't know what you'd use that for.

And then through into this area here, which I suppose is...

Well, it's kind of a reception room, I don't know quite what.

It doesn't particularly work because I can see through the kitchen

and that is too small, as far as I'm concerned.

That wall wants to go.

I mean, without even thinking and seeing the rest of the property,

get rid of that to really open that up, because you come through here

into what I suppose is the formal dining room area.

And, again, it's a good-sized space, but in terms of the flow

of the property and the layout, it's all wrong.

It's all wrong, it's all wrong, it's all wrong.

Just in case you didn't get that, let me repeat - it's all wrong.

The kitchen is dated

and really not using its size to its best advantage.

To one side, there's a small corridor containing a toilet.

And further along this huge dual aspect lounge,

so much space and potential just waiting to be realised.

But go back through the kitchen and there's more evidence of just how

this ground floor layout isn't working.

Well, at the very rear of the property,

accessed through this utility area, is an extension, just one big room.

And it's just odd. I mean, the way you get to it through here...

It's got a shower in it.

Maybe this would naturally lend itself to being a gym or

something like that, with the shower facilities and whatever.

Access out into the rear garden via these patio doors as well.

It really has shrunk the size of the rear garden as a negative,

but it's, you know, a useful space.

Again, though, the whole thing of the internal

layout of the property, not quite working.

It's disappointing that such a large house has such a small garden.

You can sort that interior out, but bar knocking down the extension,

you just can't make this garden any bigger.

So far, an ideal family house, just not with an ideal family garden.

Upstairs, and does the layout improve? Well, let's find out.

Nice big landing, so we like that. Bathroom and separate loo here.

A huge great corner bath. Very, very dated, though.

A kind of corridor, odd corridor, leading down to a bedroom there.

Very large bedroom that way. Another very good-sized bedroom there.

A nice additional feature, which is a bit of a balcony.

And then through to...

through to a room which, in some ways, epitomises the problems with

this house. This is your fourth bedroom.

This is the bedroom bit, that is the en suite.

And as you can see, it's almost the same size as the bedroom.

Right, take out all the internal walls and start again.

That's the only thing to do.

So the house may be big, but what it needs is a total

back-to-basics renovation to get it looking its best.

It's a lot of house for that guide price of 189,000,

but does a local estate agent find this house as perplexing as I do?

First impressions when arriving is,

"Wow, this looks like an interesting property."

It's got mock Tudor features.

But then as you enter and go round the property,

you realise it is in quite a disappointing position at the moment.

Unfortunately, the way it has been designed and obviously over the years

extended, refurbished, is such that it now needs a good thought

and clear out.

Basically, with four walls,

you have got a good square footage for family accommodation, but

not the current arrangement conducive to a family home.

But as an investment, is this a good buy?

Could you do it up and let it out?

Once the property has been renovated,

the property itself is in a zone where it's very popular

for schools, public transport, so there is a high demand.

And, in my opinion,

the property would rent at £900 per calendar month.

And what sort of resale value could the house achieve?

In my opinion, once this property has been thoughtfully redesigned,

it could reach a capital value of £350,000.

Well, a house that doesn't quite live up to the promise

when you arrive at the gates and look at it.

It's a little bit all over the place inside

and the back garden definitely disappointing.

Still, it's in a good location and has fantastic scope to be quite...

Well, quite something, actually.

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

Onto lot number 24.

185. Are you going to wave at me? 185,000, we're looking for.

185, thank you. 185,000, sir. Thank you. 185.

Who's going to take this chap on? I've got 185.

I'll take it in ones, if it helps things along.

185 I have. 86, thank you.

187. 187, and 8.

8, 9, 9, 90.

One, two, three, four, five, six, seven and eight.

9, 200. 200,000, I'm in the market. 201, 2?

201,000 on you, sir. 201,000...

201,000 for you at the back... 2.

Thank you. 202.

Three, four, five, six, seven.

208, 9, 10, 11, 12...

212,000.

13, 14, 15, 16, 17, 18, 19, 20.

220 on you, sir. 220, and 1. 221, and 2.

Two, three, four, five.

226, 227, 228.

9? 230. 1, 2...

Two, three, four, five, six...

235 is on you, sir. 235, OK?

235,000. Any advance? Be quick.

235,000.

Any advance?

235. Yours, sir. 235,000.

That final bid of 235,000 was made by Cardiff-based Will,

who may look familiar to you if you are a regular viewer of the show.

We met Will twice before, once in 2007 when,

as a fledgling property developer,

he bought a four-bed house with his brother John to do up and rent out.

Lucy then caught up with Will a few years and a few houses down the line

when he bought an even bigger end-of-terrace with eight lettable rooms.

Five years on, and Will is obviously

still in the property game and still buying big.

I met up with him to find out his plans for his latest purchase.

-Will, great to see you again.

-You too, Martin, yeah.

-How are you?

-Very good, thank you.

-What's been happening since last time we met?

All sorts has been happening. MARTIN LAUGHS

Been married, new baby, more houses, lots of work. Busy, busy.

-Great. So it's obviously gone well.

-Yeah, it has gone very well.

How many properties are you up to now?

We have got six rentals and obviously this is the latest one,

-this is number seven, yeah.

-Wow.

So is this a bit of a change, this one, or is this going to be a rental as well?

This is a complete change, because this is going to be a family home.

Not for me, though, not for me. It's for my brother. He's been looking...

He's actually based in Cornwall with the Navy, but he's in Cardiff an awful lot.

So it's part of an investment for him, getting him on the ladder,

and obviously it is a nice house for him to live in when he is here.

Did you find this place for him or did he find it?

I do all the legwork. I found it, phoned him, told him about it, did the viewing,

bought it, then showed it to him.

Wow!

-Mm.

-But you were spending his money?

-Yeah.

-Without him having seen the place?

-Yeah.

I can't believe this wasn't slightly nerve-racking for you.

No, but I know what he likes, I know what he wanted,

and he trusts me, I trust him.

It all works out.

Well, John, Will's younger brother,

obviously trusts him a lot to spend £235,000 of his money.

John is currently serving in the Navy, based in Cornwall,

flying helicopters, so he won't be actively involved in the renovation.

But he has seen the place and the brothers know the awkward room layouts need fixing.

It's a bit of a funny one.

There's been extensions popped on at the back and there's...

So we're going to have to do some moving around of walls

and the like, but I like doing stuff like that.

It's nice to make big changes like that, so I'm good to squeeze in...

There's plenty of room for an extra bedroom upstairs, so far from

having a small four-bedroom house, you can have a nice, big five-bedder.

Erm, so we'll do that and get it all put back together really nicely.

Right. Is this something you're going to get involved in, in terms of...?

I'll be doing the hard stuff, rolling my sleeves up and making it happen.

I've got a little team with me, so we'll get stuck in and make it nice.

-He's very lucky to have you as an older brother, isn't he?

-I like to think so.

Will reckons the work should take about six months with

a budget of £30-£40,000.

But if the plan is to turn this four-bed house into a five-bedder

then that's a lot of rooms for a single man.

And with Will's growing family, well,

are you thinking what I'm thinking?

Maybe I could move in and he could have one of the rooms at the back.

We'll have to see. No, it's not. It's going to be his house.

I assured him it will be his house.

You talk about that flippantly,

but you say you've got a new family, a young family.

Yeah, I've got two children now.

I've got Skye, who's just over three and a half,

-and I've got Jesse now, who's nine months.

-Right.

So, yeah, got a boy and a girl and we could do with some more room

ourselves, but he might come back and find us squatting in his house.

-Who knows?

-Is the temptation not to do this for yourself?

Oh, it's very tempting. Especially when it's all done nicely, it'll be even more tempting.

But, no, I wouldn't do that to him.

-MARTIN LAUGHS

-What about you personally?

Any sort of plans for expanding the portfolio even further?

This is going to tie me up for a bit now, doing his house. Jeez!

But we will wait and see, see what happens once this is done

and he is in and settled. We'll perhaps start looking again.

Maybe see you at the next auction, who knows?

-Great. Good. Well, listen, congratulations.

-Thanks very much.

-Well done.

-Thank you.

-Look forward to seeing how you get on.

-Thanks.

Well, what a nice big brother Will is,

but what a responsibility - spending nearly a quarter of a million pounds

of brother John's money on this.

Well, thankfully, he liked it, and actually,

the biggest question is going to be

whether Will falls in love with it himself after it has been restored.

You can find out how he transforms this place later in the show.

OK, so what do the following people all have in common?

Carl Cox, Cannon and Ball, Eric Sykes, the man who voiced

the Daleks, musicians Inspiral Carpets and Mark Owen of Take That.

Well, they all come from the Metropolitan Borough of Oldham.

Over the years, Oldham has seen some interesting times.

It was once the textile processing capital of the world,

so perhaps it's not surprising that a town with such a rich

industrial heritage should produce such major stars.

Well, getting back to where they are from,

I'm here to see a really interesting sounding property.

Five minutes from the town centre, close to the motorway network and

the new Metrolink into Manchester, three-bedroom mid-terrace.

Had a guide price of £50-£60,000. Let's take a look.

Nice double-glazed front door, which is good.

And then into something which I really think is a real

bonus for a property, a little porchway here.

Keeps the draughts out, keeps it nice and warm in here.

And at first glance, yeah, doesn't seem to be in too bad condition.

Interesting choice of flooring.

-FLOOR SQUEAKS

-Squeaky, too!

Erm, a bit of, I think, damp going on there,

but looks like it's got central heating.

Although, judging by the radiators and the pipes,

it doesn't look like it's that modern.

And judging by the boiler, that's definitely the case!

But I like what's happened in here. It's a kitchen.

I mean, in these kind of properties, more often than not, people have

built an extension on the back and that is where the kitchen is.

This makes a really good-sized kitchen, basically

built into what was the rear sitting room.

And, you know, not bad condition.

Bit of smartening up, you could probably rent it out like it is.

It's a very good start.

This kitchen is certainly up to the job.

It's in good nick, well laid out and has a cooker to boot.

The boiler, however, definitely needs to be replaced,

and I would look to hide it away somewhere more discreet.

But with that really good-sized lounge,

downstairs definitely gets the thumbs up from me.

Now, upstairs, you probably think you know EXACTLY what

I'm going to find.

But no. Bit of a surprise, and it's a good one.

You've got the bedroom which would have been at the back,

that's had some kind of a bathroom added to it.

So that works actually quite well.

And at the front here, this is the original door leading into what would've been the one room here.

That has been divided into two.

I mean, hmm, you've got a bit of corridor space and it's sort of...

I don't like things which have got droppy kind of things.

It's a bit of a hazard. But in terms of utilising the space, really good.

And definitely having the bathroom upstairs, a major plus.

And they've even managed to squeeze a bath in.

A bit of a small one, but a bath.

-# One, two, three

-One, two, three

# Oh, that's how elementary... #

Hey, three bedrooms and a bathroom upstairs, who'd have thought it?

They're not a bad size and, again, in pretty good nick,

making this a relatively straightforward refurbishment.

-# It's easy

-It's so easy... #

I reckon you might need to spend some more time in the garden than the house.

It certainly could do with some smartening up.

With good access from the back,

off-street parking or a garage could be an option.

But, overall, this looks like a great investment.

So what does a local estate agent think?

Quite a nice property.

There's not much work required in order to upgrade it.

You've already got the PVCu double glazing.

You've got the gas central heating already installed.

I think the only negative is the bathroom.

I think it's got a small bath. It's not ideal.

I would turn that probably into a shower room.

Ah, maybe a shower could be an option.

Personally, though, I'd stick to a bath.

I think it's more family friendly.

But even so, what kind of resale values could a house that

was guided at £50-£60,000 achieve once given a little TLC?

On the open market, I would expect a property like this,

once renovated, to achieve £75,000.

Not a bad resale value.

But I have to say, I see this more as a perfect rental property.

I would expect this property to achieve £450 per calendar month.

That means if it was bought anywhere near that £50-£60,000 guide price,

you could see a 9% yield, which is very nice indeed.

Well, it's a good-sized house that just needs a bit of cosmetic work to really spruce it up.

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

Lot 25, three-bed, mid-terraced property, well maintained.

Set in a popular area with spacious accommodation, three bedrooms.

Get started on this - 45.

45 here.

Just beat you to it in the front, sorry. 46 behind. 47 in front.

48. 49.

50. 51.

52.

52 on the phone.

53, 54, 55...

55 I've got. 56.

Maybe not surprisingly, this was a popular lot,

and we rejoin the bidding at £60,000.

Back in at 60-and-a-half. Half, 61.

Half, 62.

62 I've got. Half, can you?

Half. 63.

Back in at 63. Half.

63,250, 63-and-a-half.

63,750.

63,750. 64.

64 I've got. 64,250.

64-and-a-half. 64,750.

65. 65 I have got.

At £65,000. I want to sell it...

First time, second time,

third and final time, you've had your chance...

Well done, sir! I knew you'd get it.

So, after that hard-fought battle,

the successful bid of £65,000 was made by Ken.

Ken lives 20 minutes away in Bolton

and recently has started to build a small rental portfolio.

-Ken, good to meet you.

-Nice to meet you, Martin.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

Well, we know the area and I've got other houses in this type of area.

It were a last-minute thing,

so I didn't actually get the chance to come and look inside it.

MARTIN GASPS So I bought it without even looking inside it.

-Oh, no!

-So I'm quite pleasantly surprised.

It is quite well maintained, actually.

Yeah, you were lucky, for sure.

So it sounds like this is something you do, is it?

Yeah, about two-and-a-half years ago, I sold my company.

-I'd run it for 21 years.

-Wow, what was that?

-We...we used to manufacture rear-view mirrors for trucks.

-OK!

-A very niche market.

-Yeah, very niche market.

So I sold my company about two-and-a-half years ago

and I thought, "Well, what shall I do with the money?"

So I decided to start buying houses and renting them out.

-# Here comes the mirror man

-Ooh-ooh-ooh-ooh!

-# Says he's a people fan

-Ooh-ooh-ooh-ooh!

# Here comes the mirror man

# Ahhhhh... #

With the money he got from his mirror business,

Ken has bought six other properties for his rental portfolio.

And as he didn't see this property, on reflection - ha-ha! -

I think he's been lucky.

It's certainly an approach I wouldn't advise.

So what involvement do you have in the process?

Do you project manage it? Do you actually get your hands dirty?

-No, I don't. I have people...!

-You have people who do!

I have done that in the past. I have people who do it.

People who do them up, we have, you know,

the electricians and plumbers, so we sort of...

The guy who lets, who manages it for me,

I work with him on the guys that we use and, you know, they're pretty...

-They do a good deal for us.

-Great. So what's the plan for this place?

I'm going to get the plumber in first to check the gas fire out.

I'll need a new boiler in the kitchen.

I want to rip these floors up, this flooring up, and especially

in the kitchen, cos it's sort of a bit loose, the kitchen.

Put some cushion floor down in the kitchen,

-and I want to put carpets all through the house.

-Right.

And basically get it all painted and decorated.

So what's the budget, then?

I think we should get it done for 3,000, 3,500.

What's the timescale for sorting it?

We want to get it done in about two and a half weeks.

-Oh, wow, straight in there.

-Yeah, straight in.

-Have you already got people interested, or...?

-Not yet, no.

We're going to advertise it while we're doing the work.

Two-and-a-half-weeks, boom, get it on the market.

Get it on the market. Get it done up.

Get it done up and get it rented out, get the money coming in.

It's obviously gone well, this whole idea of, you know,

taking the money you worked hard to generate and put it into property.

Yeah, it has, yeah, and it gives us a good income.

I'm retired now,

so I get a very good income off the rents that it generates.

-Well, listen, congratulations.

-OK. Thank you.

-Good luck with it.

-Yeah, thanks a lot.

-Look forward to seeing how you get on.

-Yeah. Thanks.

-# Here comes the mirror man

-Ooh-ooh-ooh-ooh!

-# Says he's a people fan

-Ooh-ooh-ooh-ooh!

# Here comes the mirror man

# Ahhhhh... #

So, Ken taking the money he got from the sale of his business

and investing it wisely in property.

And another good one to add to the portfolio.

But two-and-a-half weeks to sort it out? That's not long.

How will he get on? You can find out later in the show.

Coming up, the London flat that's all set to sparkle.

We do a lot of blinging to our flats.

And back in Oldham, everyone - and I mean everyone -

is keen to see the results.

Today, really, this morning, was the first time I came to see it.

But first, it's a return to South Wales.

It was three miles east of Cardiff city centre where we glimpsed

a property that rather stood out from the rest of the street.

Formerly a barn conversion, this large four-bedroom detached house

was a maze of rooms, so not only was an update in order,

but a rethink of the layout wouldn't go amiss either.

It was bought for £235,000 by property developer Will who,

along with his brother John,

has built up a small portfolio of rental properties.

So is this a bit of a change, this one, or is this going to be a rental as well?

This is a complete change, because this is going to be a family home.

Not for me, though, not for me. It's for my brother. He's been looking...

He is actually based in Cornwall with the Navy

but he's in Cardiff an awful lot.

So it's part of an investment for him, getting him on the ladder,

and obviously it's a nice house for him to live in when he's here.

So the plan was for Will to renovate this house around his other

developments and building projects

while brother John was kept busy with his naval career.

So, armed with a budget of £30-£40,000,

the hope was to get it shipshape in around six months.

16 months later, we're back with Will to see how he's got on.

New lawns and a much more presentable front area suggest some progress.

# I wanna see inside

# Would you let me see beneath your beautiful tonight?

# Oh-oh-oh-oh!

# See beneath, see beneath

# I-I-I-I... #

Oh, joy, exactly what I wanted to see -

a complete reworking of the layout.

So this is a room where a lot of the work happened.

It has changed beyond all recognition, really.

There was a large wall coming down here which separated

a dining room from a smaller dining room here.

Once we took those out,

that gave us the space to be able to put in the island unit to give

a really nice, open-plan kitchen, dining, family sort of room.

There's now so much more flow, with the kitchen leading into the

side extension, which in turn flows to a garden you can actually see.

And the garden can also be accessed by French doors

from the refurbished lounge.

There's a modern cloakroom to complete the downstairs

and there's also been some layout changes upstairs.

So this is where the chimney was.

We took it out, it gives us

a nice corridor through into our master bedroom.

The master used to be a small, boxy room with a dressing room off of it.

Once we took the wall down, separating it from the en suite,

we popped a window in the back wall, two foot thick of old stonework.

Then I got up in the loft, saw the state of the beams, and I've always

wanted to do a gallery ceiling, so it was an offer too good to refuse.

So, we pulled it all down, sanded the beams, beautiful open ceilings,

beautiful exposed beams, even a little chandelier to boot.

What more could you want?

# Would you let me see beneath your beautiful tonight? #

So, beneath the ceiling,

the beautiful old beams can see the light of day.

The master bedroom now comes complete with a modern en suite.

And the three other bedrooms aren't looking too shabby either.

One of which also has an en suite.

And by combining the separate toilet and bathroom,

Will's ended up with a big family bathroom.

And if that wasn't enough, moving the chimney breast

and rejigging the layout slightly, he has created another

bedroom in what is now a spacious, bang-up-to-date five-bedroom pad.

But why did it take ten months more than he expected?

It's been a lot of time because I've tried to juggle it with doing other jobs

and I've just been here on weekends and brought the guys in for a week here, week there,

couple of weeks here, big burn at the end.

But, yeah, it's come out really nicely. From the gardens...

Obviously landscaped all the back and the front.

That's the chimney breast that has been recycled to make the front

garden borders around the grass, actually, so we recycled what we can.

To be honest - don't want to blow my own trumpet - I'm chuffed to bits.

I think it might be the nicest house I've been in, let alone worked on.

Well, he might well be chuffed about what he and his team have

achieved here, but it's not for him, it's for his brother.

So was he ever worried that his brother might not like it

quite as much as he does?

Not in the slightest, no. I was quite looking forward to showing it off to him.

He's seen it at various stages throughout the build,

and obviously at one stage, it was like a cave with bricks piled up

and dirt and filth everywhere.

I enjoy showing someone that

and then bringing them back to this, and you can see the difference.

This is the best bit - showing the end results.

But, no, knocked his socks off. He loves it.

Well, that's a relief.

So, Will may have delivered the house his brother had hoped for.

But at what cost?

I'd say that the cost of the place,

and all of the materials and work and fittings and things,

we must be in for £300,000 by now.

£300,000 all in

seems like a pretty good deal to me,

considering the size and finish of the house.

Do two local estate agents agree?

What I particularly like about the property,

it's got an oldie-feel look about it from the outside,

but when you come inside, it's contemporary, modern,

and the standard of the finishings is excellent.

It's very important

that when using such good quality fixtures and fittings

that it's matched with a very good finish as well.

Here, this is a perfect example of that match.

Not only was this property bought as a home,

it was also bought as an investment.

So has a project that cost around £300,000 been money well spent?

In my opinion, the value of this property as it currently stands is £375,000.

I would estimate a sales value of this property

to be in the region of £350,000-£360,000.

That's kind of where I was pitching it in my head.

Um, it's a lovely house, and someone did want to buy it.

Yeah, that's the sort of figure I was imagining.

Yeah, kind of on a par.

So, a potential pre-tax profit of between £50,000 and £75,000.

Should Will's brother's naval career take him further afield

and he has to let the house out,

the agents thought rental figures

of between £1,350 and £1,500 per calendar month should be possible,

which would generate an annual yield of above 5%.

So, hats off to Will.

He's certainly done his brother proud. Now, what's next?

Things are quietening down a bit.

I've got a few projects now that I just need to finish off, but much smaller jobs.

My brother's moving in on the weekend.

Then my plan will be to fill my van with his sofas and bits and bobs

and get them across here, get him settled in,

and then drop the kids off so he can babysit for the weekend.

The west London area of Kilburn was a place

that was overlooked in the past,

but with good transport links and desirable period property

at comparatively affordable prices,

Kilburn is in high demand.

# This is the London

# That belongs to me... #

Seven minutes' walk from Kilburn tube station, and we are here.

The lot itself is in this imposing 1930s block.

It's got one bedroom, and it had a guide price of £200,000.

This really is an enormous building,

and this was one of my favourite eras.

The lobby is just as I'd hoped,

and the only downside is that the lift goes to the third floor,

and I'm heading for the fourth floor, which is at the top.

Oh, this is a fantastic hallway.

You know, some people regard hallways as a waste of space,

but I think they set up property beautifully,

and this is a really good area.

Loads of storage, which is quite unusual for a London flat.

Look, there's more over here.

You've got these lovely brass handles everywhere. Look at that!

More storage! Look! I've never seen so much.

It's got a certain character to it.

You've got a kitchen here, which really has seen better days.

You'd need to completely put some thought into that.

But a fantastic skylight.

Got a really nice-sized bedroom,

a little bathroom, which needs to all be changed,

and a living area.

Now, this is wonderful. A great space.

You've got nice proportions.

I know your heating and hot water are included in this property.

Look at this lovely old radiator. I'd like to restore that.

The windows are not that fantastic, but they're functional.

They do the job.

But the best bit is, from here,

I can see right the way across London to South Bank

and, look - that is the London Eye.

Can you see it?

# The beauty in our London skies... #

Oh, a great view indeed. You could plan a day out from here.

Inside, the space is generous.

It feels homely, and even the squeezed kitchen is bright enough

with that skylight to be a pleasant place to cook.

I'm liking this a lot, and I love the communal gardens out the back.

As well maintained as the lobby,

these fabulous gardens would be a lovely place

to while away a sunny day,

and a real luxury many Londoners can't afford.

But there is a catch. There always is, isn't there?

You should know by now that when it comes to property,

you don't often get something for nothing.

And in this case, the lovely communal areas, the lift,

the garden - they all come with a hefty price tag.

We're talking service charge,

which is around £3,000 a year.

That is huge.

In fact, it's £250 a month to add on to your mortgage,

your council tax, your bills and, without a shadow of a doubt,

it will definitely put masses of buyers off.

The heating and hot water is included in that service charge,

and it is worth remembering that most flats

come with a service charge of some description.

It's just the size of this one that makes me wince.

If you were planning to rent,

there's your healthy yield disappearing down the plughole by a few per cent.

Still, I think the flat has so many plus points.

We asked a local estate agent along to see what he thought.

It's one of the more popular blocks in the area.

The common parts are almost immaculate.

They are very nicely kept.

There's off-street parking, albeit that there's only 31 spaces,

I think, for serving 58 flats.

And there are some lovely communal grounds as well

for people to walk around in.

The main negative, I have to say, is the service charge.

It's disproportionate to the size of the flat. I believe it's £3,000.

The lift only goes to the third floor,

which means that a prospective buyer will then have to walk up another flight of stairs

which, if they were buying the flat to get away from stairs,

obviously is a huge disadvantage.

Yes, I agree about those negatives,

but I do still like the flat, guided at £200,000.

The lease has nearly 150 years left, so no hassle there.

But could it be a sensible investment?

What could it fetch if it was refurbished for the resale market?

If this flat was fully renovated and brought to the market today,

I would bring it at an asking price of £295,000,

and would hope to get in excess of £285,000.

And a rental figure?

If this flat was renovated,

what price it would get per calendar month?

I'd have thought comfortably between £1,100 and £1,200 per calendar month.

That service charge will always cause you issues

when you come to sell

and eat into any rental profit you hope to achieve.

And it will hold back the value of the flat itself.

But it depends what you're willing to pay for,

because this is a lovely block in a good area,

which could be a great place to live.

Let's see who liked it enough to go for it at the auction

One-bed, purpose-built flat. Needs a bit of modernisation.

-Who'd like to kick off? MAN:

-170.

Yes! 170. 175.

180. 185. 190.

The bidding starts off frantically.

We rejoin the action at £222,000,

with one bidder out, and a new one in.

222. 223. 224. 225.

226. 227. 228.

229. 230.

The price keeps going up. We come back at £241,000.

241.

242, sir? Have a think.

If not, 241. It's going at 241.

First time. Second time.

Third and last time. Are we all done?

Sold - 241.

And the successful bid of 241,000

for the one-bed flat in Kilburn

was made by Tariq.

Tariq works in IT.

He's a software designer, and he and a colleague

like to dabble in property,

though this is their first auction purchase.

Tariq, congratulations. This is great news.

So, tell me about this flat, why you wanted to buy it.

It's the location. I used to live here.

I know the area really well

and I was always interested in buying a flat here,

either for investment purposes or just as a project to turn around.

So, are you looking for property for yourself to live in,

or an investment opportunity?

These are all investment opportunities.

The household I'm living in, I'm happy.

These are all... All my projects are for investments.

You say all your projects. How many have you got on the go?

I've got three on the go at the moment.

What was it about this property you liked in particular?

It's the location and the building.

I've always liked this building. I've always liked the location.

It's close to the Kilburn tube station. It's close to the city.

So, it should attract the right type of investor

or rental for people as well.

I agree with Tariq.

On the face of it, this is a great investment,

but there is a massive elephant in the room here,

and we need to address it.

-Let's talk about the hefty service charge.

-Yes.

I think if I was renting it out, it would be difficult

to figure out what is what,

but at the moment, my initial plans are to turn it around

and sell it back at either an auction or through an estate agent's.

It's interesting you want to sell it back through an auction.

It's a quick turnaround.

I know that once this flat is done up,

it's all brought back up-to-date,

it will sell very quickly because of the location.

-But let's talk about the price you paid at auction.

-Yes.

Most people like to get a bargain and sell it on at a profit.

But for you to pay what you paid and then put it in an auction

and hopefully get some profit,

I'm a little bit worried that that would actually happen.

Yeah, it's a risk.

But in this area, if you look at the average one-bed, it's over 300,000,

and we're not planning to spend more than 15,000 on this.

Mmm, to sell this for 300,000,

I reckon this flat's refurbishment needs to be of a high standard.

I know Tariq and his property partners have experience,

but I worry.

Is £15,000 going to be enough?

What are you going to do for your 15,000?

Because, you know, it's fab as it is,

but it does need to be taken to a certain level...

-Sure.

-..to get that buyer.

Well, we do a lot of blinging to our flats and apartments.

-Most of my projects are like that.

-Really?

-Yes.

-It's all hi-tech stuff coming in.

-Wow.

Solid flooring, lighting, et cetera. So we try out different ideas.

It would really have to be a cut-price couture for £15,000.

I know it's only a one-bed flat, but fancy gizmos, wooden floors

and luxury finishes, they don't come cheap, not for 15 grand.

Where is Tariq shopping? I want to know.

However, the ambitious plans don't stop there.

One option is to totally open-plan the kitchen areas that you've seen,

the bedroom that you've seen, we want to just open-plan that out totally.

We want to make this the bedroom, which is a very large bedroom.

So, it would be one way of doing it.

Also have an en suite from this bedroom into the bathroom,

and also have a guest sort of toilet and basin in there.

But this would then be a rather large bedroom.

Yes, it would be a very large bedroom

and, yeah, people like large bedrooms.

You've got lots of storage space.

But people like large living spaces more so, I feel.

My hunch is that, you know, to have a living space here,

with those views, that's really what you want to be looking at.

That was my initial hunch when I walked into the flat

for the first time when I was viewing,

when they were doing the open days.

-Yeah.

-But now that I've had more time to mull over it,

I'm quite 50-50 between moving this and making this into a bedroom

and open-planning the other area.

It's been so lovely to meet you today.

I'm really excited to see which way you turn this flat around.

-Are we in the lounge? Are we in the bedroom?

-Sure. I don't know yet.

-Not sure yet.

-It's going to be interesting.

-Sure.

-Lovely to meet you.

-Thank you very much.

-Thank you.

So, I understand Tariq wants to renovate and sell on,

but back in an auction?

I'm not sure it's the way to maximise profit.

And also, I'm not sure what he should do with the layout either.

It's a lovely flat, and it's just an interesting one.

You can find out what happens later in the show.

So, have our fearless developers emerged victorious?

Or have they floundered in the shallow end?

Time to find out.

It was in the Lancashire town of Oldham

where we first came across a three-bed terraced house

which was, quite frankly, pretty together.

Yes, it needed a new boiler, and there were the odd signs of damp.

But it really just needed a general spruce up

and would be good to go.

It was bought sight-unseen by a retired local businessman, Ken.

Well done, sir. I knew you'd get it.

Ken used to manufacture rear-view mirrors for trucks,

but there certainly was no looking back after his switch to property.

He'd already bought six other properties for a rental portfolio

and he didn't plan to hang about on property number seven either.

What's the timescale for sorting it?

-We want to get it done in about two and a half weeks.

-Oh, wow.

Two and a half weeks. Bing, bang, boom. Get it on the market.

Yeah, get it on the market. Get it done up.

Get it done up, and get it rented out, and get the money coming in.

And Ken wasn't only hoping to get it turned around quickly -

he planned also to get the work done on just a £2,000-£3,000 budget.

Well, now, three weeks later, we're back

to see if this really was bing, bang, boom.

# Bing, bang, boom

# Bing, bang, boom... #

Let's just say, some subtle changes have taken place.

# Bing, bang, boom... #

New carpets, a fresh lick of paint

and one or two other issues have been addressed.

# And it's bing, bang, boom... #

The first thing we had to do,

there were a little bit of damp in the corner of the front room.

When we investigated it, we found out that the drainpipe outside

was broken, so we've replaced the drainpipe at the front.

The gas fire - we've replaced the gas fire with an electric fire,

because the gas fire was broken and irreparable.

In the kitchen,

we put a new boiler in, because the old boiler was also broken.

We've had the whole house redecorated and painted,

and we've had carpets laid throughout.

So, troubleshooting done, the rest was just a sprucing-up exercise,

with the bathroom cleaned and plans to install a shower curtain...

..and the three bedrooms given a little lift

with that new decor and carpets.

-So, has Ken kept a careful eye on this one?

-I wasn't here at all.

I wasn't on-site at all.

I've being in Spain for the last three weeks,

so I only came back last Friday.

So, today, really, this morning, was the first time I came to see it.

But I have the person who looks after rent in my properties,

he's been overseeing it on my behalf.

# I'm the invisible man

# I'm the invisible man... #

Ah, so Ken disappeared to the sun while his team did the work.

I have to say,

the changes that have been made at the back are practically invisible.

He has put some paint on the back wall,

but it's slightly disappointing.

Come on, Ken, pull out those weeds at least. It won't harm the budget.

My original budget was about £2,500-£3,000.

We actually came in at £3,010.

So I'm quite happy to say we stuck within the budget.

Well, sticking to his £3,000 budget

and with the purchase price at auction of £65,000,

Ken has got the house ready to let out

on a total investment of £68,000 before taxes and fees.

So, is that value for money? What did two local estate agents think?

Yeah, I think it all looks quite spacious and freshened up

and very neutral.

It's a great buy-to-let property.

It's been refurbished. Not a lot of work has been done to it.

Redecorating, new floor coverings.

But it's what it needed to freshen it up.

What I would have done differently is possibly re-plastered

some of the rooms, and concentrated more on the garden at the rear.

I think I would've had a look at the bathroom.

I think there were some opportunities to do that slightly differently.

I think the bath will be off-putting to some people.

Perhaps it might have made sense to put a shower in there

rather than just leave that very small bath.

I think perhaps a few more tweaks could have been done,

but Ken was keen to keep his spend to a minimum

and get on the rental market as quickly as possible.

But if he were to sell, what return could he get on his £68,000 investment?

We would expect it to achieve somewhere between £70,000-£75,000.

To put this on the open market for sale,

I would suggest a figure of around £75,000.

Yeah, I felt, you know, it could be between £70,000-£75,000.

We've always bought the house to rent anyway, rather than sell

so, yeah, I'm quite OK with £70,000.

Yes, I think a potential £2,000-£7,000 pre-tax profit

isn't going to change Ken's mind.

It's definitely all about rental.

In the current rental market,

we would expect it to achieve £450 per calendar month.

I would suggest, on the rental market, it could achieve

around £450-£475 per calendar month.

I think the rentals being quoted are on the lower side

and I'm sure that we can achieve £525 per calendar month.

Achieving even the lowest figure of £450 per calendar month

would still see a healthy yield of around 8%. Not bad.

So, is the plan to continue to grow his rental portfolio?

Well, I rent six properties at the minute.

I'm getting a good income off the six properties,

so I'd like to bring a little bit of money back in.

So, I think the next property, I will probably look at

trying to buy, do it up and sell the next property,

rather than rent it,

and hopefully make some money on a resale.

So, a cheap and cheerful fix could be all you need.

But back in Kilburn, London,

this one-bed flat needed a bit more bling.

It was bought for £241,000 by software designer Tariq.

The flat was in a really stylish '30s block,

but it was a bit tired and dated,

and more than that, well, a little out of fashion.

Yet Tariq had just a £15,000 budget to bring it up-to-date.

What are you going to do for your 15,000?

Because it does need to be taken to a certain level...

-Sure.

-..to get that buyer.

Well, we do a lot of blinging to our flats and apartments.

-Most of my projects are like that.

-Really?

-Yes.

-All hi-tech stuff coming in.

-Wow.

Solid flooring, lighting, et cetera.

So, we try out different ideas.

And that £15,000 wasn't going to just bring in the bling,

it was also going to be used for some potential layout changes.

It seemed mighty ambitious on such a tight budget,

and Tariq had a fast turnaround planned,

hoping to put his blingtastic flat

back into auction in just a few weeks.

Three months later, we're back to see

whether Tariq managed to pull it off.

Wow. There certainly is a touch of bling.

And I have to say, I'm glad to see the basic layout hasn't changed.

So what influenced his decision there?

Because of the lease conditions and the restrictions on the lease,

as well as the complications of the pipework over here,

we decided to leave the flat as it was, the layout as it was.

It would have been nice to have a mini bathroom and an en suite,

but in the scheme of things

and the timelines that we were working to,

it wasn't the right thing to do.

No structural changes meant he had money to spend

on the finishing touches, which might not be to everybody's taste.

The bathroom has been overhauled.

Everything is new here - tiling, flooring, sink, toilet, bathroom.

We've put some special mosaic in.

It's brought it up-to-date.

So, it's been totally redone. It's got an overhead shower.

We've also put a water pump in to make sure

we get good pressure, cos we're on the top floor.

Yeah, that's pretty much it, really.

The bling in the bathroom is complemented by the swish new kitchen.

We've put granite worktops, we've put granite tiles,

we've put a customised kitchen, all integrated appliances.

We've even put an induction hob and had an electrician come in

and run it for the day just to work out

how much electricity it's going to use.

It works out to be less than a pound

if you run it for six hours a day.

So, we've made it economical to run as well,

rather than just doing the flat up and that's it.

This flat comes with a £3,000 service charge

and it's on the fourth floor of the block,

where the lift only goes to the third floor,

leaving a hike up the stairs.

So Tariq really needs to make the flat worth that effort.

I think he's done that, and I think it will now attract buyers

and tenants on the open market.

But Tariq had other plans.

The plan was originally to put it back into auction

just to turn it around quickly.

Subsequently, I've had a change of mind

and to give the market a chance.

So I've had a few agents come in and value the place.

It's on with multiple agents. I'm quite confident it will sell.

Yes, I think this is a more sensible approach,

but his budget went from his planned 15,000 to £18,000.

Having purchased the flat for 241,000,

Tariq has invested a total of £259,000, without costs and fees.

So has he brought enough bling to make the cash tills ring?

What do two local property experts think?

The selling point of this property is, number one, fantastic location.

Close to all local amenities, shops, transport links very, very good.

Also it's a very good size, very spacious, and very well refurbished.

The flat's very nice and modern. Very light and airy.

Good for a young couple to move into and enjoy.

Bathroom finished to a very high standard.

Integrated, all brand-new, very, very nice.

Yes, it's completely ready to go.

It's not Tariq's preferred option,

but what kind of rental figures could this flat now command?

For rentals, I think you would achieve £1,200 per calendar month.

The current rental valuation for this property at the moment

would be somewhere in the region of £1,400-£1,500 per calendar month.

What I expected. It's in the range what I expected.

I've had similar valuations myself.

I know if I was going to rent it, it will go for £1,400.

In fact, I have interested parties already at £1,400 to rent it out.

I've always done this with all of my properties,

lining people up just in case I change my mind at the last minute.

Not a bad plan, and that approach,

with £1,400 per calendar month,

taking into consideration that three grand service charge,

would still net an annual yield above 5%.

But more importantly, how would Tariq's £259,000 investment do

on the current resale market?

Put this property on the market at the moment for sale,

it should achieve somewhere in the region of £325,000.

I would market the property at £315,000

and expect to achieve offers between 310,000 and 315,000.

Extremely pleased that the valuations have come in that range.

That's what I wanted, and that's what I was expecting.

So it's good to get that validation. It will be good to get it sold now.

Tariq has the flat on with five agents at present,

and if he gets anywhere near the agent's valuation,

he could potentially see a pre-tax profit

of between £51,000 and £66,000.

So what's next for Tariq? Onwards and upwards?

Something similar to this.

If I can find something similar in this area.

I won't go out into different areas that I don't know.

I'll stick to what I know

and do probably the same formula.

Well, that's it for today's show. Not enough for you?

Well, there's plenty more.

So make sure you join us next time for Homes Under The Hammer.

-We'll see you then.

-Goodbye.

-Goodbye.