Episode 78 Homes Under the Hammer

-Welcome to the programme.

-Even in these more challenging times,

we're fascinated by the world of property.

Martin and I love the idea of getting a good deal,

but it's not always that easy.

No, but one way you can stack the odds in your favour

is by going to the auctions.

Buying properties under the hammer has become even more popular these days.

Millions of pounds of property are sold around the UK every year.

So let's look at the three properties that

got our expectant buyers going on today's show.

If you want a view, then this three-bed semi in Telford has it.

But there's something about this property I can't get a handle on.

Hm! Erm...

In Folkestone, a building where it's all about finding the right level.

If this flat was on the ground floor, it would be worth 10 grand more.

With a £90,000 guide price for this Cornish bungalow, will its

buyer be cracking open the champagne or cracking under the strain?

What an odd place for a crack.

All these properties have been sold at auction.

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

98, on the phone now.

..when they went under the hammer.

Today, I'm in the 1950s housing estate of Overdale,

in Shropshire, which sits in the shadow of a well-known

local landmark, the Great Wrekin Hill.

Legend claims it was made by a giant on his way to drown local inhabitants,

by making a dam off the River Severn.

However, he was met by a sweet-talking Shrewsbury shoemaker,

who persuaded him to abandon his murderous mission.

The giant downed tools and threw away his spade full of earth,

thus creating Wrekin Hill.

Well, you'll have lots of chance to ruminate on

whether or not the legend of the Giant of Wrekin Hill

is true or not from the property I'm here to see.

Because it does have a fantastic view of the very hill itself.

The guide price was £65,000 plus, three bedrooms, semi-detached, let's take a look.

Now, with a semi-detached like this you normally know

what you're going to find when you come through the front door.

Stairs facing you, living room off to the left. Not here, though.

The stairs are there, the living room dual aspect is over there,

and a very nice room it is too.

But facing you is this room...what's this all about?

Is it a utility area? I don't know what it is.

It looks like there's an exterior door there,

so at some stage maybe that was like a porch or something? Don't know.

Whatever it is, not very good. What is, however, is this.

Looks like this is a fairly new electrical installation,

sure enough, date there, 2010.

So that's going to save you a bit of money.

Clearly, though, this wall here wants to come out.

Because it would then open up what is a half-decent sized

kitchen into something which would be really spectacular.

A really nice-sized space, so definitely that wall's going to go.

Kitchen, then, obviously needs a bit of work. Erm...

What's that?

Hm! Erm...

Maybe an odd screwdriver thing for screwing in odd things on the wall?

Or, maybe something which the giant used for eating his spaghetti?

Or an old fashioned washing dolly, used for hand-washing clothes, perhaps?

No. Used by the giant for his spaghetti.

On the subject of fine dining,

as you can see, there's plenty of room for a dining table

and chairs in this generously proportioned living room.

As with the electrics, it looks like the double glazing

and central heating have all been done fairly recently.

Although, decor-wise, all down here needs some serious TLC.

How about up top?

So, upstairs, is there enough room for a giant? Big question.

Well, maybe. Decent sized bedroom there.

Slightly smaller bedroom towards the back.

A separate toilet and bathroom.

Now, if you put a bit of a hand washing basin in there,

toilet with wash basin and then your separate bathroom, I think

that's an ideal combination.

And then through into the second bedroom,

the second front bedroom, if you know what I mean? Yes, pretty good.

In fact, a really solid family house.

And having a wander around means I got to spot

some of the great views from the front room windows.

This house really is in a lovely corner plot.

The front garden is large and looks easy to maintain.

And what's more, there's a bit at the side.

Well, out the back of the property, as everywhere else,

good to see double glazing.

Also, nice somebody has gone to the trouble of painting the rainwater gutter.

I know it sounds a bit silly, but one of my big bugbears is when people don't do the basics.

Gutters and downpipes, get those wrong, full of stuff,

it's going to cause damp, it's going to cause all sorts of problems a stitch in time

definitely saves nine. So it's nice to see that.

What is also a bit of pleasure is the back garden.

Yeah, not about size at all.

You could do with some slightly nicer garden fencing but, apart

from that, it's a good-sized space I think you can have some fun with.

And look, there's even a patio. And heavens to Betsy...

..a sun lounger.

Well, would be rude not to really, wouldn't it?

Nice little sun trap, this.

Well, it would be if the sun was shining.

So, as I soak up the great British...

er...grey skies, now is a good time for a local property expert to come

and give his opinion on this place guided at £65,000 plus

and see if he thinks it makes for a sunny proposition.

This property offers huge potential.

You can start from scratch in a lot of areas.

Now, what I would suggest, because the kerb looks as though it has already been lowered,

I'd gravel that or put some tarmac down and have a proper driveway

and make this a property with offer of parking.

Both for letting or for sale, that would certainly increase

either a sale price or potentially a letting valuation.

He's right, of course. Off-street parking is always a bonus,

But do check out with your local council about any environmental

regulations with regard to materials you could use for the surface.

What does the agent think this house could sell for?

Once the works have been completed on the property,

I would suggest a selling price of around about £100,000.

And how about rental?

Potential rental for this property would be quite good.

I would suggest a rental value between £550

and £575 per calendar month.

Well, it's a good, solid house and you can't complain about the views.

I would, however, make a few internal modifications.

Still, a good one to go for, let's see who agreed

when it went under the hammer.

Lot number four. We stay in the Telford area, this is Overdale.

What's this, 60,000 to start me here?

58, then? We'll start it at 58. 58 bid in the aisle, thank you.

60 bid now. £60,000. 62. 64?

£66,000. 68. You bid at 68.

70? 70. 72? No.

I'll take ones if it helps now.

Anybody want to go 73? 73.

74. 75. 76.

Seen you. 77. 77. 78.

79. 80. Sure?

79, then. Standing then at the back, £79,000.

Are we all done now? At 79, then, once...

79 twice...

third and final time at £79,000...

Your lot, sir, well done.

It looks like smiles all round there.

Getting the property for £79,000 are Phil, his wife Tracey

and their teenage children, Alex and Hayley.

I wanted to find out more about their first auction purchase.

-Congratulations.

-Thank you.

-Thank you, I think.

Tell me why you wanted to buy the house?

Well, it's a bit of an investment opportunity.

It's not our first task that we've done,

-we're just thinking of the future and hopefully retire early.

-Right.

-On the proceeds.

-Good plan.

Have you bought houses for investment before?

Yes, we've just completed one house which has just sold

-and gone through last week.

-Great.

That was originally for rental, but unfortunately I think

we did too nice a job of it and we were advised to sell it.

I think we just went a little bit overboard,

-did it as if it was ours rather than to rent.

-Give me some examples.

-Oak doors instead of just standard doors.

-Right.

-Oak floorboards...

instead of carpets.

And we did a complete renovation of it so it was from roof down.

-So how much did you buy it for?

-59,000.

-How much did you spend on it?

-20...

-26.

-26,000.

-How much did you sell it for?

-135,000.

-Result!

So I can understand why you are very excited about that.

So you're hoping to replicate that here, although you're not

planning to necessarily sell this one on?

I don't think this will be a sale certainly for the next 10 years.

I think we'll sit on it, we'll rent it out

and we'll just take a little bit of money in from it.

Keep it tidy with a long-term view on it.

Tracey thinks they went overboard with their last property,

but they did make a 50 grand profit,

so despite breaking those rules about overspending on personal

preferences, they literally were quids in.

However, they seem aware that they were lucky that time around.

Will they be prudent this time?

We're going to start with making the garden secure,

get the fences sorted out, get the outside ready

and we're considering taking a few walls down internally to

enhance the size of the kitchen and maybe the bathroom.

And then it's a case of stripping it out,

plastering where necessary and decorate throughout.

Who does the work?

The heavy work, I do.

All the background stuff, Trace manages very nicely,

so she looks after all the finances, she looks after the paperwork,

all the legal stuff and Tracey with Hayley and Alex,

who are our children, sort of get involved with the grafting also.

-How old are they?

-Hayley's just turned 17 and Alex is 15.

And, yeah, they've got involved in the last project.

-Hayley helped to tile walls.

-Great.

We have to sell it to them on the basis that it's their future,

-their future investment, so they get involved.

-That's brilliant.

My dad was into DIY and I learnt a lot from him and it really,

if you're in that environment, it really makes a big difference.

-That's where you learned, isn't it?

-That's where I learned.

When we first got together and bought our first house,

-we soon moved on to an old cottage which we renovated.

-Yeah.

-And then from there we bought a piece of land...

-And built our own house.

And built our own house 20 years ago.

Wow, so what's the budget for the works here?

Well, ideally we'd like it to come in at around about five.

Five grand?!

-We reckon we can do it for five grand.

-You'd be surprised,

-I've got a reputation for finding bargains.

-Right...

A lot of the expensive work like the central heating's already done,

-and wiring and stuff.

-Yeah.

-So it is more cosmetic than anything.

-Apart from the kitchen and the bathroom.

-And a few walls we're going to take out, yeah.

-Apart from that, it's pretty cosmetic(!)

-Yeah.

-And the plastering.

-Yeah, the plastering.

-And the floor. Yeah.

'Tracey is a business finance manager, hence the confidence.

'But talk about from one extreme to the other -

'£26,000 on the last property, and only £5,000 on this one?

'Phil's IT job takes him away from home a fair bit,

'so even with the help of those budding DIY-ers, I'd be very surprised

'if Tracey isn't revising those figures upwards very soon.'

-We want the place to be of a nice standard.

-Yes.

We don't want it to be bottom of the range,

but we accept that there are time scales we have to meet.

And if the budget goes a little bit beyond five grand, then we've got

a little bit in hand for that, but we'll make it as nice as we can.

-Well, good luck.

-Thank you very much.

-We look forward to seeing how you get on.

-Thank you.

-Thank you.

So, Phil and Tracey learning from their previous renovation experience, where they overspent.

However, are they going a little bit too far the other way?

£5,000 to do this up?

Well, let's find out later in the show how they get on.

'From Shropshire's rolling hills to the Kent coast's rolling waves.

'Folkestone is riding on its own wave at the moment,

'with a high-speed rail link to London,

'a revitalised town centre and a good smattering of culture.

'The tide's definitely turning.'

Ten minutes from the bars and restaurants,

and we're on the one of the main Victorian arteries through town.

It's a gorgeous grand wide street,

and it really does make a wonderful first impression.

Well, the property I'm here to see

is a three-bedroom flat in this building here.

Now, it had a guide price of £60,000 to £65,000,

and it's on the top floor!

Great.

'A sprightly start up the stairs, at least to begin with.

'My first thought is how fabulous this building is.

'I'm hoping the features inside live up to the ones on the outside.'

Wow. Lovely stairs...

but rather a lot of them. Wish me luck!

'Well, the grand communal staircase is certainly elegant.'

If this flat was on the ground floor,

it would be worth ten grand more.

And right now, I'm thinking that would be ten grand well spent.

'The flat is on two levels, at the very top of this building,

'so right away I reckon that rules out

'any buyers with mobility issues, or young kids.

'Let's hope it's worth the climb.'

Right. This is not what I was expecting.

Wow. Freshly plastered walls.

I can't smell any damp.

The floors have all been boarded. Really, really good condition.

I think that's a bedroom there. New windows.

Another bedroom here - with a bit of a leak up there,

we'll come back to that.

Some storage, a nice bathroom,

new tiles, little staircase,

a fantastic space - I'm guessing this is a sitting area.

A kitchen, with a brand-new kitchen in it.

I mean, this really is an incredible flat.

It's almost like I've turned up too late and it's been done.

'Yes - have I missed something?

'Exactly how long was I climbing those stairs?

'This flat seems finished!'

'And the floor space is wonderful.

'Both bedrooms are good-sized doubles,

'and unlike some upper floor flats we see,

'we don't feel too cramped and crowded by the sloping ceilings.

'And there's more accommodation up the stairs.'

Upstairs there's a lovely bonus, bedroom number three.

It's a really nice size,

you've got fantastic views, with a little balcony.

But - look at this. Now, it's not instantly obvious,

but this is the source of the water damage on the ceiling downstairs.

How? Well, I've been told this door was accidentally left open

four, five years, and that's how long the flat has been empty.

Can you imagine that - five years' worth of water seeping through here,

and what damage that could have done to the floorboards and the joists even.

That's scary.

'You really don't want to see this create a problem in a flat

'that has so clearly had a lot of time and energy spent on it.

'I really hope there isn't more damage than you can see.

'I'd definitely get it checked out.

'That said, it's a lovely building, with that ornate communal staircase,

'and the flat itself has had all the work done.

'At a guide price of £60,000 to £65,000,

'it makes this a very attractive package to my mind.

'I hope the local estate agent has plenty of energy for the climb.'

Gracious Victorian building, very close to the centre of town.

Nice position, close to the seafront.

There isn't very much that needs to be done to get it

in a lettable condition all ready to sell on.

'And how could you add more value?'

Carpeting needs doing,

'a few bits of decorative attention, few fittings, that's it.

'And what about resale? What does the agent think the flat could achieve?'

I think that the ceiling price for this property once it's in

finished condition is probably in the range of £110,000.

'And the rental income it could generate?'

The rental price would be

in the region of £650 per calendar month.

I think this flat is good value, it's in a great location,

it has a lot of charm -

for someone who enjoys a daily climb home.

Let's see who that was at the auction.

'This lot came up near to the end of the auction.'

So lot 54. Three bedrooms.

Got a guide of 60,000 to 65,000 - start me in at 65,000?

£60,000 to start me?

£60,000 I have, thank you. And 62?

62 I have, and 64?

64 is bid, and 66?

66, lady's bid.

At 67, I'm bid.

68. 68.

And 69. And 70.

70, I took the lady's bid, sorry, sir.

71? 71.

And 72? 72. And 73...?

'Plenty of interest on the day.

'We rejoin the bidding at £82,000.'

82,000 right at the very back of the room on the far left-hand side.

83,000 is bid, sitting. 84 for you.

At 84,000 at the back of the room, at 85 for you now?

No, a definite no. At 84,000 at the back of the room, then,

for the first time at 84,000.

Out on my right, at £84,000 for the second time.

84,000 for the third and final time.

Gentleman's bid on my left-hand side, are you all done?

Sold at 84,000.

'The successful bidder paying £84,000 was Greg.

'He lives in Surrey,

'and until recently worked full-time in IT administration

'but is now part-time.

'He now plans to develop property,

'and this was his first investment purchase.

'I met him back at the flat to find out more.'

-Greg, congratulations.

-Thank you.

-Well done.

The property is yours, so how did you find it?

I've been looking in Folkestone for just over a year.

This property came up along with another property

in the apartment building itself, which was the one I had my eye on.

I got told that they were definitely going to auction

so two months after I got told that, I won this one.

So did you try to buy this prior to the auction?

No, I tried to buy the other one.

-It was a two-bedroom, whereas this is a three.

-How much did you offer?

I went to the estate agent and said I'd offer £90,000 which was

the full asking price of the two-bedroom at the time,

if I could go and see the apartment and they said no, so here I am.

-And you paid?

-84.

-For a three-bedroom apartment.

-Yes.

-Give me five!

'Result - Greg's got an extra bedroom in his flat

'and he paid £6,000 less than he offered privately for the other one.

'For Greg's tight finances, well, that's a real bonus.'

What's your sort of plan, your future for it?

Well, in my working life,

I've been made redundant couple of times now

and I've saved hard with my money and this is basically every penny that

I have is in this property and the refurbishment of this property.

It is my pension plan.

OK, you say the refurbishment of this property,

let's talk about the refurbishment,

because you could eat your dinner off of any of these walls.

It's absolutely fabulous.

This fantastic, I really lucked out with it.

The property was partly refurbished anyway

and for one reason or another, they didn't finish it.

What are you going to do to refurbish it

because it feels terribly spacious, lots of little rooms.

There are things you could do to update it.

If I was doing this completely from scratch,

I would do a different kitchen and upgrade the bathroom

and stuff like that, but because everything is in, working,

there's no reason to take it out.

What I'm going to do is coming and spend a few thousand pounds

and just finish the job, really.

'Greg was determined to buy a property in this block,

'but he's not quite so decided about what is going to do with it,

'whether to sell or rent it. He may even move in himself.

'He's got contacts who'll help him with the work

'and Greg is a dab hand at tiling and flooring which means

'he should be able to keep within his projected budget of £3,000

'and a three-month timescale.

'It all sounds straightforward enough

'but the one worry I had about the fact is that door having

'been left open for five years and the possibility of unseen damage.'

When I came to view the property, the damp was a concern for me.

I've had a look at the ceiling in the small bedroom

where the water damage was coming through.

The plasterboard seems in fairly good nick but if there are

surprises, it's not going to be part of the three grand, but it's doable.

'At the moment, Greg still has his day job in IT,

'but he's reduced his time to three days a week, giving him a four-day

'weekend to spend by the sea in Folkestone and do a property.

'It's all a means to an end because Greg's real passion is travel.'

I decided to leave my job that I was in.

It was quite stressful and I wasn't enjoying it,

so my friend and I decided to do Route 66,

so we did that for five weeks.

I came home and a week later I booked a ticket to go away for a month.

I just got the bug.

So hopefully if you can spin this, turn it around,

make some money on it, off you'll be going

-on your travels once again.

-That's the general idea,

to get myself to a point where I can do a couple of properties

and take a small chunk of cash out of the profit and then go and travel.

Do you think there's any chance

you might end up relocating to Folkestone yourself?

Well, the general plan is to spend the next three years in Folkestone

to buy, do up and sell properties, and build up some capital

and then hopefully start a renting portfolio.

You really believe in this area.

Yes, I'd really like to invest my money where I live

and where all my friends and family are,

but the difference is a two-bedroom in Sutton is going to cost

quite a substantial amount of money,

over 100,000 more than this flat cost me

and this is a three bedroom and the beach is a four-minute walk away.

I know you've been spending a bit of time on the beach this summer.

Yes, that's right, every spare moment I've had, I've come down to the flat,

not to do any work, but to spend my day on the beach.

Greg, it's great meeting you today

and I'm not expecting a drastic change.

Hopefully some profit, though, and some new flooring.

Yes, and some new flooring. Thank you very much.

-Lovely to meet you.

-Thank you.

Greg has a few grand to polish up this already shiny flat.

I'll be interested to see what he does and see if he rents,

sells or moves in.

You can find out what he's up to later on in the programme.

'Still to come, this three-bedroom bungalow in Cornwall is

'showing some cracks, so why is that good news?'

Wow!

'And will Greg get to the bottom of those damp patches and still

'have enough in the budget

'to put the finishing touches to his new flat?

'But first, we're returning to those magnificent views

'of the Shropshire countryside...

'..that made this semi-detached house such a must-buy at auction.

'Although the views on the outside were inviting,

'the same couldn't be said for the views inside.'

Facing you is this room and what is this all about?

At some stage, that was like a porch or something.

'Plenty of room for a good reconfiguration here,

'and buyers, Phil and Tracey, who paid 79,000 at auction have

'roped the rest of the family into the project.'

Hayley and Alex, who are our children,

are getting involved with it.

We have to sell it to them on the basis that it's their future,

their future investment, so they get involved.

'With a ready-made workforce at hand,

'Phil and Tracey were good to go and determined not to repeat their

'last development experience where they spent more than they intended.'

I think that we just went a little bit overboard.

-So, how much did you buy it for?

-59,000.

-How much did you spend on it?

-26,000.

-26,000.

-How much did you sell it for?

-135,000.

-Result!

'The couple intended knocking down some walls

'and renovating the kitchen and bathroom.

'Despite Tracey's nose for a bargain,

'I wondered if they were going too far with a rather tight

'budget of £5,000, but given the house had already been

'renovated in terms of electrics, double glazing,

'and central heating, it looked like mostly cosmetic work was needed.

'Five months later and on the outside,

'not a lot has changed, but, inside, it's a different story.'

Probably the biggest change we've made is that we've taken

the wall out between the kitchen and a strange little room that

was behind it, so it made it a larger kitchen.

I think the space is much better utilised, we've got

a nice family kitchen now, whereas we had two very small rooms before,

so that's been a real improvement to the property.

The kitchen took a little bit longer than anticipated.

That was mainly because we used a second-hand kitchen which

needed a little bit of adjustment.

The problem with using second-hand furniture like that is that

you have to make do with what you've got,

whereas with a new one, you just simply slot it in and away you go.

'Tracey clearly found a bargain with that kitchen. Even if it did cause

'a few headaches, it looks good and the living area is welcoming

'and there's a nice blend of subtle colours which feel warm and homely.

'Upstairs, the separate toilet and bathroom have also been updated.'

We've made the airing cupboard in the bathroom smaller

so that you've got more room in the bathroom.

Other than that, it's structurally exactly the same as it was.

Really, we didn't have to worry too much about the aspect of the

build, it was more the ascetics and making the rooms more usable.

'Other than the professionals checking the electrics,

'no task has been too great and no family member excused.'

We've got the kids decorating on the house

and we've even got his elderly mother in to help with cleaning.

It's been a family affair, this one.

'What about that £5,000 they set aside for renovations,

'did they manage to stick to the budget?'

By the time we finished everything, it should come in at about £7,500

and the overspend on that is mainly because of the plastering.

When we got in here and started to take wallpaper off,

we found that the existing plaster had all cracked,

so in some places we had to make good and then we thought by having

the whole house skimmed out, it would allow us

to have a nice blank canvas, a good finish, ready to take the paint.

With an initial purchase price of 79,000, plus renovation costs

of 7,500,

it's time to find out

if two local estate agents think this has been a sound investment?

It's a really spacious property.

Nice and clean and fresh all the way through. Nice, contemporary colours.

Very good for this sort of young market, really.

The feature wallpaper is very good in places and they've

kind of gone above and beyond, maybe, in some areas as well.

I think there's a couple of areas they could have done slightly better,

such as flooring in the toilet, perhaps.

But overall, it's fine, for what the market's expecting.

The view to the front is absolutely perfect.

It's got a good-sized front garden as well,

so they're big bonuses to be found.

The downstairs accommodation works well as well.

All in all, Phil and Tracey

and spent a total of 86,500 on this property.

They definitely want to keep it,

but if they did sell on, how much could it fetch?

I think, in the current market,

they'd be looking to achieve around about £105,000.

With the market price, for sale purposes,

I would say at £110,000.

Minus taxes and expenses, that is a potential profit of up to 23,500.

That sort of return on the investment is what we expected, certainly.

We knew we weren't going to make a huge amount

of money on this, but it wasn't about a resale figure at this stage.

This property is, of course, a long-term family investment,

so what really matters to them is the rental.

I would suggest that should be looking

somewhere in the region of £595 per calendar month.

Top dollar price would be £625 per calendar month.

We expected around about £575 per month.

So anything on top of that is a bonus.

Phil, Tracey, Hayley and Alex aren't resting on their laurels, though.

They've already purchased their next property for development

and they've set their sights on the long-term future.

We always like to go to the auctions and see what's out there.

So, I'm sure we will then

buy further properties and our aim is over the next couple of years

to build up a portfolio with a long-term view of having

a retirement fund, of course, from it.

We now head off to the beautiful county of Cornwall

and the market town of St Austell on the South Coast.

The town grew out of the mining of tin and copper

and more recently, china clay.

Today, it now relies on tourism

and with surrounding scenery like this, its popularity is no surprise.

Well, even on a grey, wet day like today, it is

lovely to be down in the West Country.

The smell of the sea air, there's just something about it.

So the property I'm here to see, I'm excited about it.

It's a two-bedroom bungalow at a guide price of £90,000 plus.

It's on this corner plot. Nice looking garden.

Let's take a look inside.

The bungalow itself looks attractive enough,

but then, as we all know, looks can be deceptive. So, what is on offer?

Well, through the front door to a little sort of central area here.

It's not huge. But then, the bungalow isn't, really.

This is a nice size. This is your living room.

It's dual aspect.

And with these sort of basically floor-to-ceiling windows,

lots of light in here.

So, this is a very dated little serving hatch through

to the kitchen.

I don't like that, though. What an odd place for a crack.

On an internal wall like that. Hmm.

It looks as though other potential buyers have been taking

a close look and that is definitely the thing to do.

Any cracking that isn't just plaster drying out needs a big

investigation. Structural suspicions aside,

I reckon this bungalow would

benefit from a total strip out and start again.

And it would appear no effort is going to be needed stripping

those bedroom walls. So, the two bedrooms, not a bad size.

And the bathroom, which although a bit dated, I've seen worse.

It all gets a bit not too brilliant again

when you come into the kitchen.

It's dominated by this huge, great, I guess it's the chimney breast.

In there at the moment, your hot water cylinder.

So, maybe if you put, I don't know, a combination boiler in, you could

try and open up a bit of that space, because it really, it does need it.

And with the serving hatch, you could do something in here,

for sure. As you travel through here,

you do come out into a really nice-sized space, and you can

understand why somebody has added on this little aluminium...

What would you call it?! ..greenhouse, I guess!

It'd be nice if this was a bit more permanent,

because I imagine in the winter, this would be very cold.

But the concept of having something here,

is, I think, absolutely right.

Because you need that extra space. At the moment, it's a bit snug.

So, this little lean-to - good idea in theory, -

at the moment not very successful in practice.

Best start again, I think.

The kitchen is definitely not suitable for modern living,

but it wouldn't take a leap of imagination to tap into the space,

transform the layout and create a really nice working area.

You know me. I'm always looking for ways to add value to a property.

And one of those is to think about some kind of an extension, so one

of the good things about the position of this bungalow is it is

on the end, so there is the option perhaps of extending out this way.

Obviously with bungalows,

the other thing which you could contemplate is a dormer.

Would the planners allow it?

A good way to get a feeling for that is to look around

the immediate environment

and see what others have done. There's a few bungalows

over there that look like they've got some kind of an extension.

I see three dormers there.

So it looks like the options might be open,

which has got to be good news.

Increasing the square footage of this property could transform this

small bungalow into a good-sized family home.

But would that be right for this area and the market around here?

Let's find out from a local estate agent.

The older generations,

sort of early retirement age upwards,

really like this area.

There's not many that come on the market and when they do, they go

very quickly, so it's a really good area and a really good house.

With that positive news, what sort of returns could the bungalow

make once it has been renovated? First, resale.

This property, in its finished state, would be

worth between £160,000 and £170,000.

If it goes for anything near its £90,000 guide price,

and add a possible refurbishment bill of 15,000,

then the bungalow could represent a pretty decent investment.

But what if you could extend up into the loft?

I think if you added another bedroom to this property, it would

definitely add value to this house, maybe another 10,000 to it.

But even in its current state, it is

still a very saleable house in a very sought-after area.

Hm, sounds like going to the expense of extending upstairs might not

be worthwhile if you were an investor.

So, is there a rental market here?

The rental market in this area is extremely good as well.

This property, in its finished state,

would claim an income of between £675 to £750 per calendar month.

So, was this bungalow by the sea in Cornwall a good catch?

Well, I would certainly want to do a bit more fishing,

specifically about this crack, before I committed.

Let's see who wasn't put off when it went under the hammer.

Lot 129. I would like to start at £90,000 if I can. 90, sir, seated.

Straight off at £90,000. Looking good at 90 here. 91. 92.

93 for the phone if we can. 93.

94. 94,000.

96,000. 97 on the phone now.

97. 98 now, seated.

You're in the room, he's on the phone, I'll take half. 97.5.

98 on the phone now. I will take your 98 now.

Straight at the back of the room. Thank you, sir. 99.

98.5.

99. 99 now. 100. 100 here. 102.

101. £101,000.

That is the first time it is standing against the phone.

Half? 101.5, 102.

Must be, 500 quid. 102. 103, please.

It is 102 at the back of the room, I will call this for the first

time at 102 for the second, third, last time of calling.

102, sir, thank you very much. Your bidding number.

And those successful bidders getting the lot for 102,000 were Howard

and Jason.

Howard, on the right,

runs a property maintenance business based in St Austell

and I was keen to find out why he has spent £102,000 on this bungalow.

We're always on the lookout for refurbishment properties, it's

a good standard bungalow. Easy refurbishment. Very good location.

-Just really works for us.

-Is it something you do a lot of?

It is something we do a lot of.

We're a local building maintenance company here in St Austell

-and we employ over 100 building maintenance operatives.

-Wow.

So, one of our building initiatives is doing refurbishments.

So we've done quite a few of these now and this one is ideal.

So who do you generally manage properties for?

Is it private people or companies?

We've got a sister company who is a social landlord, so we maintain

all of their properties, they've got over 4,000 properties in Cornwall.

-4,000?

-4,000.

-So it keeps us busy.

-No kidding!

So, does this house go into your personal portfolio?

Or is it into a company portfolio?

It goes into a company portfolio and we use it to sell on,

-obviously, hopefully at a profit.

-Right.

And then we move that profit back to our sister company

so they can build more local, affordable housing.

Oh, great.

This sounds like a win-win situation.

Not only will this house get a new lease of life,

and provide a home, the profit from it will go towards funding

affordable housing, creating jobs and profits for the company.

Howard looks after finding the properties,

researching the market and dealing with all of the financial side,

while Jason's job is to project manage the renovation

and they are aiming for a fast turnaround.

-We're hoping to get in and out within four weeks.

-Four weeks? Wow.

Tell me what you are planning to do within that time, then?

The layout is quite dated.

So we're looking to open plan the kitchen/lounge.

The wall behind you is obviously carrying

the chimney breast at the moment. We'll look to demolish the chimney,

take the wall down behind and make it open-plan lounge,

full rewire, central heating system with combination boiler.

Outside, replaster the walls, fascia boards, windows, doors,

and literally go right the way through the property.

We've got a grounds maintenance team on board,

they'll do the grounds.

-And still do all that in four weeks?

-Yes, should be.

-How many people?

Probably have four predominantly, working on it full-time.

-And you're going to be cracking the whip?

-Absolutely.

And while we're on the subject of cracking the whips,

what about those internal cracks?

That's basically caused due to settlement in the sub floor.

We actually got hold of the legal pack

and we found that there was a guarantee for the works where

the previous vendor had actually employed a contractor to underpin

or to carry out remedial works to that. I contacted the contract.

And just double-checked the file

and all of the works were carried out and they said it was

a very easy, straightforward job, it is just basic settlement.

How odd that when they did the remedial works,

-they didn't sort of fix the things you could see.

-Absolutely.

-A bit of plaster, perhaps?

-Absolutely. It's a strange one.

But possibly to our advantage, because when people were

having a look round, it probably looked worse than it actually is.

-There you go. Read the legal pack.

-Absolutely.

Yes, indeed. Homework saves heartache.

And also it can save you a pretty penny.

Talking of money,

they aim to spend £18,000 on a straight renovation.

Basically, just doing the sums, it works for us straightforward,

in and out, and it gives people potential afterwards if

they want a conservatory on the back or to extend it out to the side.

So, you're leaving in a bit of potential uplift for somebody.

Yeah.

Weighing up the cost of investment

and its possible returns means not wasting time

and money on renovations that won't increase the profit margin.

As you would expect from a professional outfit,

Howard has done his research on the market in this area.

So, you had a twinkle in your eye when you saw this one?

-Yes, it was right price, right guide-price...

-Good area.

Good area and, yeah, very strong property.

Great stuff! Well, listen, congratulations to both of you.

Thank you.

And I'll look forward to seeing how you get on.

-Cheers, lovely.

-Thanks, Martin.

So, there you go,

just one of the advantages of reading the legal pack,

Jason and Howard discovering that there was a guarantee on the work

done and that those cracks, after all, were nothing to worry about.

But they would have put other people,

who hadn't read the legal pack, off.

So, how will they get on sorting it out in four weeks?

You can find out later in the show.

It's been a while now since we last visited those properties.

There should have been some work done

but you never know quite what's been happening.

Yes, all sorts of problems can arise.

So, let's find out what's gone on.

We now head back to Folkestone, Kent, where

earlier in the programme we met Greg, who comes from South London.

He paid 84,000 for a three-bedroom flat all the way up these

stairs, on the top two floors of this block.

He works part-time in IT and was hoping to build a property

portfolio for his pension and to provide income so he could travel.

I reckoned he'd got a winner with this flat!

Hardly your standard "before" refurbishment job.

In fact, it looked a lot better than the "afters" I've seen.

What are you going to do to refurbish it?

If I was doing this completely from scratch,

I would probably do a different kitchen

and upgrade the bathroom and stuff like that but

because everything is in, working, there's no reason to take it out.

So, what I'm going to do is just come in and spend a few

thousand pounds and just finish the job, really.

Only one thing concerned me about this fabulous flat,

the upstairs bedroom, it had a lovely balcony

but the door had been left open, wait for it, for five years!

So, bits of this flat had been at the mercy of the elements

all that time.

Greg hopes that with a budget of around 3,000,

he can get this flat sorted in just three months.

In fact, it was only two months later when we returned to see

the finishing touches that Greg had added.

On the top floor, as you can see, we've got carpet throughout.

Erm, this is the same carpet throughout the entire of the flat.

Erm, repainted all the walls, so it's all nice, clean and bright white.

Down here, we just repaired where the damp had come in

and there was a little bit of moisture and then over here, the

door we just shut properly, cleaned up the windowsill, damp's gone away.

My checklist, before I left the flat, is keys,

electrics off and make sure the door's shut!

Sounds like the repair to the attic roof

wasn't as bad as I'd feared.

But what about the water damage to the room below?

Shutting the door correctly has completely eradicated the damp issue.

In the downstairs bedroom, where the ceiling was damaged, we stripped that

back and basically all the plaster boards were in good condition.

The joists and everything like that and the boards upstairs seemed fine,

just did repair work and plastered over the ceiling and job's good now.

Greg's been thorough.

I'd always recommend checking out any suspicious damp you

see in a property.

It might not always be as easily resolved as this!

Probably the biggest change here has been the tiling to the bathroom

and the kitchen.

It's one of the things that I wanted to do myself to keep costs down.

So, to bring up the spec of the property, I tiled both the bathroom

and the kitchen and that saved me quite a substantial amount of money.

I haven't had many tradesmen in but the ones that I have had in is

specialist jobs, like an electrician and a plasterer.

And what about the budget, has Greg stuck to that?

As a whole, I've spent about £6,000 and my budget was three to four.

That's including tools and some of the utility bills and things,

you know, and the general day-to-day stuff.

But the actual renovation, probably,

has just cost me four, four and half thousand.

With that £1,500 on various tools and utility costs,

Greg reckons he's spent around six grand on this renovation.

The money on tools is money well-spent.

After all, he will be able to use them again

and that will save him money on his next project.

With the £84,000 he spent at auction,

it takes his total investment to £90,000.

Greg decided to furnish the flat with some things from his own

property, which I think was a good move,

it helps potential buyers imagine living there so much more easily.

However, those stairs are definitely something to keep in mind,

especially when moving things like fridge-freezers

all the way to the top!

Here's hoping these two estate agents don't mind climbing up

to give us their thoughts on this flat.

First, the agent who saw it previously.

The flat was in good condition but it has been improved.

A lot of decoration has been enhanced.

New tiling in various places.

It's looking really good.

My first impressions of the property are that it looks very modern,

stylish, it's been done to a high standard.

The bathroom fittings are very nice.

How much do the agents think the flat could

achieve on the re-sale market?

More than the £90,000 Greg has invested?

I think that it could be sold for around a £100,000-110,000.

I would think that it would be worth in the region of £115,000.

Those valuations would give Greg a profit of between £10,000-£25,000,

that's before taxes and expenses.

Is that in line with his expectations?

Well, I think they're a little low.

My buffer is 120, depending on whether I almost definitely

rent or almost definitely sell the property.

I've got the property going on the market this afternoon

and it will be going on for 135.

Greg has based that figure on independent valuations he received

after the carpet had been laid but before the flat had been furnished.

What do these agents think the flat could achieve on the rental market?

This flat could rent for around £625-£675 per calendar month.

£650 unfurnished, probably £675 per calendar month furnished.

And that would produce a yield of 8-9% -

enough for Greg to get the travel brochures out.

£675 is a good income.

It means I can release what I've invested.

If need be, then I can travel on that sum of money as well.

For Greg, it's a good start to the beginning of

his property investment journey.

At the end of the day, this is going to be my pension pot

come later in life,

so I've got to be smart with it and I've got to keep going.

Earlier in the programme we paid a visit to this two-bedroomed bungalow

in St Austell, which was bought at auction for £102,000

by Howard, who runs a property maintenance company.

He and project manager Jason renovate properties

and the profits go into a sister company

which provides social housing.

We maintain all of their properties -

they've got over 4,000 properties in Cornwall. 4,000.

-So it keeps us busy!

-No kidding!

No strangers to the property business, then,

and they've done their homework

when it came to the crack in one of the dividing walls.

We got hold of the legal pack

and we found that the previous vendor had actually employed a contractor

to underpin, or to carry out remedial works to that.

I contacted the contractor and just double-checked to verify

that all the works were carried out,

and they said it was a straightforward job.

Now that's a testament to doing your homework

and reading the legal pack.

But you know me! I won't go on about it.

This professional pair set themselves a tight schedule

of just four weeks to complete the refurbishment

and there's a budget of 18,000.

We're looking to open-plan the kitchen-lounge.

The wall behind you has the chimney breast at the moment

so we'll demolish the chimney, take the wall down behind,

and make it open-plan.

Let's find out if they've stuck to that deadline.

First impressions? Well, I'm sorry the colourful flowers

and shrubs have gone, but it's low-maintenance

and it does show off the house in all its glory.

We ended up doing a bit more to the actual garden

than we thought we would.

But we felt that it really needed that

to finish off the property to the right standard.

While we're outside, that aluminium lean-to has gone,

and I'm sorry to see no replacement for it.

But I guess there's still scope, should the next buyer

fancy an extension of some sort.

But it's inside I really want to see.

What does this cracked and peeling house look like now?

Well, if you remember, this was two separate rooms.

So we've taken out the dividing wall.

There was a chimney breast here so we've removed that.

Fitted new central heating,

new gas fire, and a brand-new kitchen with integrated appliances.

We've blocked up the doorway that was there, fitted a window,

put in some new French doors

and we're absolutely delighted with the outcome of the refurbishment.

Howard's team of builders have worked flat-out

to completely renovate the bungalow,

all under the watchful gaze of project manager Jason.

We've literally gone right the way through the property.

We have rewired, we've now installed the boiler up in the loft,

all the walls have all been reskimmed, new coving throughout.

Most of the woodwork, and literally just

gone right the way through the property, so really pleased.

It was a textbook property to do, to be fair.

And the budget was as predicted - we knew what we were getting into.

We finished on schedule.

To be quite honest, it was really quite a straightforward project,

we didn't unearth anything that we didn't expect,

um, and it's run, we've managed to do it in four to five weeks

and that says that the project has run really, really well.

The job has come in on time.

And what about the budget of £18,000 that they set themselves?

Yeah, it's round about the 18,000 mark, probably nearer to 20 now,

we've done some extra work on the garden

so we did want to finish it off really well.

Howard and Jason bought this bungalow for £102,000 at auction.

Together with their renovation costs of 20,000,

their total outlay now stands at £122,000.

Let's find out what two local estate agents think of their investment.

It's the perfect refurbishment job.

Ticks all the boxes.

If you're desperate for a bungalow in a nice close

that's got some decent space and a private garden,

why wouldn't you buy this property?

I really like the property. I think it's modern,

it's fresh, I think the location of the property is nice,

it's close to all the local amenities,

and it's a really nice house.

I think to bring more value to the property

they could have done more with the garden for the patio.

It's not as attractive as it could be,

they could have added a conservatory, for example,

or a nice bit of decking.

The finish is kind of safe in the colouring sense

which means that the incoming person can do what they want.

It's non-offensive, hugely, from the word go.

Howard and Jason bought this property

with the specific aim of selling it on.

With a total outlay of £122,000,

are they on track to make a healthy profit?

If this property was to come to the open market,

I'd see it at £160,000.

I would value this property at £165,000 to £170,000.

Excellent valuations.

Pretty much in the ballpark figure where we imagined,

so yeah, pleased with those.

No surprises as far as Howard's concerned, then,

when it comes to those valuations

which would give him a possible profit

of between £38,000 and £48,000,

minus taxes and expenses.

But if they decide to put this on the rental market,

how much could it achieve?

I'd expect it to be on at about £600 per calendar month.

I think the buyers can achieve at least £650 per calendar month

to at least £700 per calendar month.

That would give them a yield of between 6.5 and 8.5%,

so a decent return. Not surprising, since this business

is a well-oiled machine.

It's all about the planning and the research front, really.

You can't...you know, the more you do upfront,

the smoother the project is going to run in the end.

They did their homework before they bought

and found no surprises when it came to the renovations.

And there's an added bonus!

A week into the build we got an offer on the property.

There was a bit of negotiation to be done,

and yeah, we finally agreed a private sale.

So we've managed to save on the agents' fees,

which is good for us.

Well, in the ever-changing world of property

there are always new things to learn,

and we'll have lots more advice for you next time.

So make sure you join us then for more Homes Under The Hammer.

-We'll see you then.

-Goodbye.

-Goodbye.