Episode 11 Homes Under the Hammer

Now, when you see those

glamorous houses in

newspapers and magazines,

they're so tempting, aren't they?

But do you find they always seem to be way outside of your budget?

Well, one way to bag yourself a bargain, or, possibly,

an unusual property, is to head to your local property auction.

Well, there is a huge choice of properties available at auction,

from flats to mansions to plots of land to build on.

So, here's a selection of properties

that got our buyers excited on today's show.

We head over the Irish Sea to Northern Ireland,

and a property in scenic Carrickfergus.

Nope, it's not this castle.

Then we return to see

if an Englishman's home is his castle, no matter how small!

So, this is it! One room!

And talking of small spaces, in Tyne and Wear,

what's this cupboard hiding?

What's stopping it closing?

All these properties have been sold at auction.

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

when they went under the hammer.

Sold!

Over to Northern Ireland now, and Carrickfergus.

Its name comes from the Rock of Fergus on which its most

prominent landmark was built,

Carrickfergus Castle.

It's 11 miles from Belfast and is County Antrim's oldest settlement.

# I wish I was...

# In Carrickfergus...

# Only for nights...

# In Ballygrand... #

Well, just a mile from the centre of Carrick, within easy

commuting distance from Belfast, is the property I'm here to see.

Three-bedroom, semidetached at a guide price of £36,000,

the big question is,

would I swim over the deepest oceans for this property to find?

Oh, yeah!

It's certainly a big looking house from the outside.

What have we got inside then? Nice sized entrance area, I like that.

Somewhere to put your coat, store your bike, your bags, or whatever.

Good to see. Um, front living room area there.

Yeah, that's a decent size too.

A few signs of damp, which you definitely want to have

checked out, but central heating by the look of the radiators.

Banisters are extra! But then through to a really great room.

At the rear of the property, it's the kitchen.

It's got this breakfast bar area, the kitchen area there,

the dining room living area over that way.

This is a really practical room for modern living, you know?

Kids can be playing over there, watching telly,

while mum or dad prepares dinner here. Just a really great layout.

What a nice surprise. Yeah, you'd want to replace the units, perhaps,

but, as a concept, brilliant!

All very family friendly. What about the rest of the house?

Well, upstairs and the very sensible layout continues.

Three bedrooms and a bathroom.

The bathroom a good size, actually, it doesn't have a bath in it,

but it's got a big shower, and it needs sorting out,

but at least you've got space to do it.

And so the three bedrooms are very similar in size,

but they also share one slightly worrying similarity in that

a lot of them are showing signs of damp.

In that case, right at the top, and in this room, particularly,

down at the bottom there.

Now, not necessarily something to panic about.

It could just be the house hasn't been lived in for a while

and that's just damp from the air, the condensation or whatever.

On the other hand,

given that it's actually all the way around at the top,

it could be that there's a problem in the attic space

and that is damp coming through the roof or whatever.

So, stick your head up there, have a poke about, see what's going on.

My guess is, fingers crossed, it's nothing too much to worry about.

If you could get rid of the mould, this house could scrub up nicely.

And you should get rid of it.

Mould is a fungus and loves to grow in cold, damp conditions,

and then mites feed on mould,

which, in turn causes respiratory illnesses in some people.

Unfortunately, inside is the only place things are growing...

..cause there's little sign of anything outside.

We've come out of the back of the property into the rear garden,

and it's dominated by this rather strange decking,

which creates this little island -

I'm not quite sure what it's all about.

There's also this outbuilding which houses the oil-fired boiler and

here's the oil tank, and then the rest of it...well, at the moment...!

Ahem! It's a bit of a rubbish dump.

A bit of a shame. But tidy it up, spend a weekend here

with a skip and a strimmer,

plant some, you know, plants and some grass,

and you could turn this into a really nice little area.

This, just like inside, needs a bit of love, but I think it's got

real potential and that guide price of 36 grand is extremely attractive.

Time for some local knowledge

and a rundown on the property market

here in Carrickfergus.

This estate was originally a

Northern Ireland Housing Executive Estate,

although many of the properties

have now been privately bought.

Um, the price ranges would be in the lower price ranges and,

as we are starting to come out of recession,

the demand for this type of property is increasing,

particularly amongst first-time buyers

and also the investor market is now coming back quite strongly, and

we have seen a good demand in recent months for properties in the area.

That's encouraging,

because Northern Ireland has had a torrid time in

the property market in the last few years and these houses would have

been bought and sold at much higher prices previously.

You could probably add £100,000 to the value of the property

at the height of the market.

In Northern Ireland, we did have quite a rise that,

at one point, Northern Ireland was the third most expensive part of

the UK in which to live after London and the home counties.

With all that in mind, what could this house sell for

-if it were renovated?

-'I would anticipate that, once renovated,

'I would expect the property to achieve a figure'

somewhere in the region of £55,000 to £60,000.

And what about rental values?

I would envisage a rental income of £425 to £450 per calendar month.

Well, at the height of the property boom,

this house would have been worth around £140,000,

but, going to auction with a guide price of 36,000,

you are getting a lot of house for the money.

Yeah, let's see who spotted the bargain

when it went under the hammer.

Three-bedroom semi,

the guide price is 36,000.

Would someone like to get this away at 25,000?

First one, here's your 25.

25 at the back. 25,000, any advance on 25,000?

Any advance on 25,000? We have 25,000.

Any...? 27. We have 27,000.

29. We have 29 standing at 29,000.

29,000. 31. 31 it is.

31,500, 31,500, 31,500, 31,500...

33. 33,000.

We have 33,000. We have 33,000 here.

Seated at 33,000.

'With the bidding climbing rapidly, we rejoin at 40,000.'

40,000, selling at 40,000.

41. 41 and selling. 41 and selling.

41 here and selling.

All sure?

Last call at 41,000... 42. 42's back.

At 42,000, back at 42.

42, selling at 42,000. Selling...

42,500. 42,500 at 42,500.

42,500 going once...

42,500 going twice.

42,500. Sold at 42,500. Thank you.

The successful bidder was just out of sight of the camera,

so let's reveal him now, back at the property.

And here he is.

It's Pip, a former landscape gardener turned property developer.

It was his bid of £42,500 that pipped everyone else to the post

and secured the property.

I caught up with him to find out more.

-Pip, great to meet you.

-Nice to meet you, Martin.

-Congratulations!

-Thank you very much.

-Tell me why you wanted to buy this place.

Well, Martin, you know Northern Ireland property has been having

a bad time in the last five, six years,

and I suppose it's time that we're going to get a wee bit of uh...

-Growth again?

-..back into the market.

I was actually hearing something on the radio this morning saying that.

Yeah, I think so, and I think the lower end of the sector,

you know, the first-time buyer properties, the rental properties

are the ones that are going to maybe benefit from it, at the start.

So, it was really...I knew the area and I wanted to get something

to make a bit of money and, if not, I can rent it out.

Have you been in the property market in the past?

So, have you seen what's happened in the last ten years?

A lot of people have got stung, but...

At what levels were you seeing it drop by?

50% in Northern Ireland, yeah, right across the board.

There was nothing that evaded, you know, the property crash,

you know, in the last five, six years but, as I say there's green

shoots of growth on the horizon, so, hopefully, we'll get there.

And are you seeing a lot of people sort of coming

back into the market now?

I don't think a lot of people have much money at the moment, Martin.

You know, I think a lot of people would like to get

back into the market because of the rock bottom prices,

but I can't see very...loads and loads of people coming back in.

Pip left garden landscaping behind to work in property full-time,

so, given all his experience in the market, why this house?

I did look at a few,

and there were actually two properties I wanted to buy,

as I say, at the lower end of the sector, the rental markets,

first-time buyer markets that I wanted to do up.

-Unfortunately, one of them actually went pre-auction.

-OK.

So, it was out, and I had a budget set for this house.

It came up within my budget.

-So, it was a no-brainer for me.

-Good.

So, tell me what are you going to do to sort of sort it out.

I actually plan to do a complete refurb, Martin, rather than

just, you know, doing a cosmetic job, you know, a lick of paint.

I do want to change the kitchen about, a new bathroom,

-and, obviously, tidy up around the gardens and inside the house.

-OK.

With a view to what though?

Cos, I mean, clearly, if you're doing it to sell,

it's slightly different to doing it to rent.

My primary objective is actually to sell it, to flip it on and,

if I can make a bit of profit, all well and good.

But if it doesn't sell quickly,

if it doesn't sell at a price that I'm going to pitch it at,

I can just rent it out, cos, at the price, it'll be a good rental return.

Yeah, for sure.

Pip is reckoning on a four to six week timescale

and a budget of £6,000 to £7,000.

But with the shoots of recovery just showing through,

how much does he hope to resell the house for?

What would tempt you to resell it?

What price would you think would be good?

I'm hoping to sell it for over 60.

-OK.

-I'm going to pitch it around 60 and see how it goes.

It's been a long time since I got dirt under my fingernails, but,

I think it's time I started.

That's a heck of a thing for a landscape gardener to say, isn't it?

-Yeah, but I've been out of that job for a while now!

-Have you? OK.

Being a landscape gardener is going to come in handy here,

but does Pip intend to do the work himself?

I will be doing a lot of the work myself,

but, I've built up a few contacts with my contractors over the years

and I'll get them in to do some of the specialist jobs.

And then what about the future? I mean, plans for more or what?

I suppose some more.

I always like to go to the auctions and see what's on and if...

there's a bargain out there, yeah, I would certainly...it won't be

the first time and it won't be the last time I've been at auction.

-Well, listen, congratulations.

-Thanks very much.

-Good luck with it.

-I look forward to seeing how you get on.

-Yeah, good.

Well, like other parts of the UK,

things have been tough for the Northern Ireland property market

in the last few years, but, hopefully,

Pip's experience is mirrored by others and things are on the up.

He's got a good house here and he's got it for a good price.

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

Time to jump on the ferry and head to

the historic town of Dover on the south east coast of Kent.

Throughout the ages, this port has played the critically

important role in trade, defence and cross-Channel travel.

And a revival of the docks at Dover is in the offing, with the promise

of a brand-new cargo terminal to be built, which, it's hoped,

will prove to be a catalyst for some long-awaited regeneration

in the town centre.

So, a fruitful place to gather investment properties.

The property I'm here to see is in this no-through road,

so it's a nice, quiet cul-de-sac in a good location, so a great start,

and for a guide price of just £20,000 to £24,000,

well, here it is.

It's a lower ground floor studio flat. It sounds compact and bijou.

Let's see what it's like inside.

Going down! You coming?

# And I can feel it, feel it

# Feel it, feel it

# Way down where the music plays

# Way down like a tidal wave

# Way down where the fires blaze

# Way down, down... #

Well, one of the biggest problems with these lower ground floor

or basement flats, is, well, they can often be damp, and very dark.

The challenge is always to try and create

a light and airy and spacious feel,

so, whoever's living here doesn't feel as if they're down in

the doldrums, so you'll definitely have to do something with this...!

Shower room and cloakroom! Good luck!

# Don't leave me this way

# I can't survive

# Can't stay alive

# Without your love. #

OK, now the trick behind developing a tiny property like this is

making the most of every single inch.

There are amazing space-saving bathroom suites nowadays

and clever lighting solutions for those dark and dingy spaces.

# Don't leave me this way... #

The same goes for this dinky little kitchenette.

Now, the right units and fittings and clever use of space help

to create flow into the living area, and it will make such a difference.

Speaking of which...

So, this is it!

One room!

Two levels, a window, a door,

no fireplace, no shelving,

no features!

I suppose you could call it a blank canvas.

# But now

# I'm lost for words

# Like a single blank canvas

# I have no idea

# No... #

Now, if this was all there was to this flat,

then I'd still be saying that a guide price

of 20,000 to 24,000 on the south east coast of Kent is

a real bargain, but there's something I haven't shown you yet.

You might have already spotted it out that window.

Look at that view! And guess what?

There's even a garden to enjoy it from!

Well, this is the payoff, isn't it?

What a really nice sunny garden you get with this flat.

And look! Really long, south-facing and,

with a bit of work and imagination,

well, it could be nice.

But what you could also consider doing,

since you've got the space here, is extending the flat outwards,

or, what about a little conservatory,

or more living accommodation,

so the studio transforms itself into a proper one-bedroom flat

and you could do that by adding an extension.

Now, that would make it more attractive to

potential buyers and tenants.

That has really got me feeling positive about this place.

But you would, of course, have to do a bit of research, and talk

to your local planning department to see if this idea would be a goer.

And you'd also have to find out if it was worth the build costs,

even with that low guide price of

20,000 to 24,000.

Who better to ask than a local estate agent?

This is a very small apartment, but

there's a lot of demand in the market

for small apartments.

The more affordable it is, the more people are in the market for it.

What about the possibility of adding an extension to improve its appeal?

You'd have to be quite careful in considering the costs

before building on here, and, probably,

if you put a conservatory or sunroom type extension,

that would be an easier way of doing it,

than putting in proper foundations and a whole new room.

I agree with the agent that an extension could be a bit

of a hassle, but I think it could be worth it.

But say this little studio flat was refurbished with no additions,

what sort of rent could it fetch?

I'd expect there'd be a good demand for this locally in the rental market

and the rental value is probably £350 to £400 per calendar month.

If you created a separate bedroom, that would probably enhance

the rental value to £400, £450 per calendar month.

And if you wanted to sell the property on?

The value here on resale is likely to be 40,000 to 45,000, and with

a room added to the back, that may be enhanced to £50,000 perhaps £55,000.

Well, for starters, there's a fair bit of damp to get

rid of in the flat, and it feels fairly cramped and dingy.

But the guide price, only 20,000 to £24,000,

and you do have a lovely south-facing garden with that view

and the option of looking to adding a conservatory or an extension.

Let's find out who bought this little nugget

when it went to auction.

Garden flat, start me where you will,

24,000, top end of the guide, 24,000 I am bid,

and 26, do I see?

At £24,000 I am bid,

26 I have and 28 and 30.

30 I am bid. £30,000 on my left,

32 I am bid and 34, no.

32 I have, 33 if it helps.

33? 33 in the corner and 34? 34.

35 do I see anywhere?

At £34,000 I am bid. 35, will you make it?

At £34,000... Lady's bid, 35 I have.

And 36. Keep smiling and bidding.

35,000 I am bid. 36?

Yes? 36 I am bid and 37.

No? 36,000 then, lady's bid for the first time at 36,000.

For the second time at 36,000,

for the third and final time,

lady's bid in front of me at 36,000

and are you all done?

Sold at 36,000. Congratulations.

Masked from our view was buyer Debbie

who got the basement studio for 36 grand.

Quite a bit over that low 20,000 to £24,000 guide price.

But Debbie is a developer who knows how to make

the most of unusual properties like this.

She buys on behalf of clients

and we've seen her on the show before when she transformed

a former funeral parlour into a flat for a client in Saudi Arabia.

This time it's a bargain basement flat for a client

living in Scotland.

It's not often you get a studio flat for the money it was at auction.

No, well, I've never bought anything in Kent for 36,000,

so we did well to get this at the price we got it.

It is just a room with a window and a door,

but a really nice sunny garden.

Yeah, I mean, it's got loads of potential.

We haven't quite got the, you know,

total plan in place for this yet,

but it is going to be possible to extend out into the garden,

because, I mean, the garden's at least 40ft long.

One of the neighbours has put a conservatory up

and they've done it so that you have to step down into that conservatory.

Um, but, at the moment,

I'm waiting for a price for a conservatory that we could

walk straight into, so, the conservatory would be on stilts,

or on a platform as such, and that would then make this into a

one-bed flat with a stunning glass conservatory with a fantastic view.

You know, I love the idea of adding an extension, but I don't need to

tell Debbie that what she spends has to balance with possible profit

and this isn't a straightforward conservatory extension.

Such a substantial construction means that she would need to

apply, and wait, for planning permission.

For a straightforward conservatory, you don't normally have to,

but for the height that we're after, I think we probably might do.

I think we'll make money on this flat

whether we put the conservatory on it or not. The question is, how much and

what's going to be the quickest return in the quickest time?

I mean, we could simply just put a new kitchen, new bathroom,

a coat of paint round and do the garden nicely.

And sell it for...?

-65.

-Really?

-60.

So, is it worth going to all the trouble of

adding an extension to get 80,000?

Well, probably not.

Debbie's job is to get a high return in the quickest time

possible for her client, so, she's weighing up all the possibilities.

Another, of course, is to add a bedroom.

I guess the most simple way of doing it would be to remove this

partition wall here so that would open up the kitchen area,

and put a corridor in by the back door there,

so, you could come...you'd come into the kitchen-diner,

walk down the corridor, on your left would be a door to the bedroom

and, straight ahead, would be

a glass conservatory with a lounging area and your views,

and then a garden after that, so, I think that would look really good.

So, I suppose the big question is,

will we see an extension out the back?

-Or won't we?

-You'll have to wait and see, I think!

Debbie is vastly experienced

with clients and property dealings in America, as well as the UK.

So, her vision for this property is bound to be a winner,

whatever she decides.

If this ends up being a straightforward refurbishment,

then it'll be done in two weeks and for under £10,000.

But if all your figures come back and it's quite straightforward

-to build a platform on stilts, you may go ahead...

-Yeah.

-..and do the extension?

-Yes, that's right. Yeah.

It's going to be interesting to see what you do.

-Deborah, it's lovely meeting you today, thank you.

-Thank you.

A dingy Dover studio with not much room to swing a cat!

But a lovely sunny garden and views to die for.

Will we come back to find a nice,

new one-bedroom flat or will it remain the same? Small and snug.

You can find out what happens later on in the programme.

Still to come, in Tyne and Wear, James breaks a Hammer golden rule

and gets a slap on the wrist!

-We didn't view it beforehand.

-Oh!

Whilst in Dover, Kent, Debbie is in line for getting a slap on the back.

I only wish there were more like this.

Now, back over the Irish Sea to Carrickfergus where, earlier,

I met Pip...

..a former landscape gardener turned property developer, who had bought

this three-bedroom semidetached property with a bid of £42,500.

Pip is a seasoned developer

and planned to renovate this tired property in just six weeks.

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

I actually plan to do a complete refurb, Martin, rather than

just, you know, a cosmetic job, you know, a lick of paint.

I do want to change the kitchen about, a new bathroom and,

obviously, tidy up around the gardens and inside the house.

Pip had plans to sell this property on and,

whilst it had good dimensions,

the numerous signs of damp in this house had me a little concerned.

We've returned two months later to find that, whilst there hasn't been

much change to the front exterior, the inside is a different story.

Now, risking such a strong colour in a house you plan to sell is

a brave move, but there's no denying that those

fixtures and fittings give the kitchen a slick modern feel.

The beautifully retiled flooring in here leads out into the hallway.

The living room has been re-plastered, painted

and re-carpeted...

..as have the three bedrooms upstairs.

And those nasty signs of damp are nowhere to be seen.

The stuck-in-the-'80s bathroom has been replaced with

a brand-new suite and contemporary tiling...

..not forgetting a new bath.

Throughout, Pip has transformed this property from

tired and dated to bright and fresh.

And if bathrooms and kitchens sell houses, I think he's onto a winner.

So, what I actually did in here,

I upgraded the tiles in the hallway into the kitchen

and into the dinette, just to give it that bit of a wow factor

when people came into the house.

Also, new kitchen, and the new electrics,

electrics have been upgraded, new switches, new sockets.

So, it took a wee bit of time, but I think the result has been nice.

Because of Pip's background in landscape gardening,

I was particularly interested to see what he'd do with the outdoor space.

However, due to bad weather,

he could only spend a couple of days on it.

Still, not bad for two days work, Pip.

I did most of the work myself.

I certainly did all the grafting, I did all the finishing off,

but I had a good few specialist people in,

the likes of the electrician, to finish off the electrics.

I got a joiner in to do the banisters,

just a wee bit above my talent.

But I did most of it myself.

How was the damp issue dealt with though?

There were no major problems that were actually causing

the condensation, it was just because the house was unheated,

uninhabited, and neglected for the two years with all the windows,

no air getting through, everything sealed off.

With all the tiling, the new bathroom and kitchen,

has Pip kept to his budget?

Well, I had a budget between 6,000 and 7,000,

which included contingency.

But I'm at the bottom end of my budget.

I'll probably come in at around 6,000 so far, and I've got maybe 200 or 300

leftover to do a wee bit of painting outside if I need to do the outside.

So, I'm actually in on target, if not below budget.

Considering the transformation here, that is a great result,

but it didn't all go to plan.

I couldn't see into the boiler house when I came to view the house

and the boiler and the pump were actually missing,

so rather than get a new pump fitted onto an old boiler, we got

a reconditioned boiler, reconditioned pump, and put a new burner onto it.

It was an unexpected cost, but we actually made up in other areas.

By hitting the sales and working himself, Pip was able to keep

costs down as well as sticking to his six-week timeframe.

So, is he still intent on selling?

My plans now are definitely to try and sell it on.

If I don't sell it on within a few months,

two months maybe during the summer, what I'll do is maybe

look for a short-term tenant and see what I can do with it then.

Pip knows that being flexible is an absolute must in the property game.

You always have to have a plan B.

But will he need to rent it out,

or will this house sell for a good return?

He has, so far, invested £48,500 in his three-bed semi.

What do two local estate agents think?

First, the one who saw it last time.

Both the kitchen and the bathroom were the two things

and they do stand out as having been done very well,

so that has been a massive improvement in that respect.

I think the cream gloss kitchen units are very contemporary

and very what people are looking for at the moment,

and the tiling to the hall floor

and kitchen dining area is particularly nice.

The property would appeal to various parties,

but in particular, I suspect, first-time buyers

and also investors, those who do wish to rent the property out.

So if Pip doesn't manage to sell straightaway,

what could he expect rental-wise?

For rental value,

we would anticipate a figure of £450 per calendar month.

I would imagine somewhere around £450 per calendar month.

Meaning a healthy yield of around 11%.

but what about the all-important valuations?

I would imagine the value of the property could be

somewhere in the region of £60,000-£62,000.

As it stands, I would estimate the value of the property

to be in the region of £60,000-£63,000.

So for six weeks' work,

Pip could expect a pre-tax profit

before taxes and expenses of £14,500.

Yeah, I'm very pleased with that price.

If I got that, it could be time

to get the dirt from underneath my fingernails

and instead of counting money, start counting stars.

So will someone else be counting their money here in Hazlerigg,

a former mining village

just five miles to the north of Newcastle upon Tyne?

MUSIC: "Hi Hi Hazel" by The Troggs

# Hi, Hi, Hi, Hazel

# Great to see you back home... #

So what was on offer at the auction?

Well, for a guide price of £50,000 plus,

a two-bedroom, first-floor flat.

Let's take a look.

Well, into the property. Looks to be in fairly decent nick.

Up here, two decent-sized bedrooms,

which is good to see, and then, joy of joys,

this room here - a really good-sized lounge.

Big window, you might want to do something to update the decoration.

Not to everyone's taste.

Nowhere more so, of course, than here in the kitchen.

Now, this stuff was big news in the 1970s

and I remember my dad completely redoing our kitchen like this,

so definitely spend some time in here

and you also want to work on this layout - it just doesn't work.

It's a thoroughfare to the back door and also the loo.

Maybe consider taking out one of these sides

so you've just got a bit more space.

Whatever you do, something needs to be done.

That said, the bathroom is actually really quite pleasant.

Hasn't got a bath, it's got a shower,

but that looks like it's been reasonably recently redone.

A bit of a utility area there.

So on balance, what you've got here

is actually quite a nice-sized flat.

MUSIC: "Gimme! Gimme! Gimme!" by ABBA

Down the back stairs and you're out into a yard

shared with the ground-floor flat

and a gnome.

Back inside, beyond redecorating and replacing the kitchen,

it looks like there's one big job to do

which will definitely require a certified installer

and certainly a sensible installer.

One of the things that never ceases to amaze me

when I'm filming Homes Under The Hammer

is some of the amazing design disasters I encounter.

For instance, here.

A little cupboard.

"What's stopping it closing?",

I hear you cry. Well...

Here's the hot water cylinder.

And it gets better, look at this.

It's actually been installed on top of the carpet.

Brilliant.

But what it does also point towards

is the fact that this is the hot water cylinder,

but there's no other heating in the property that I can see,

so you are going to factor in either some kind of electric boiler

or possibly running gas into the property or oil

to provide that much-needed central heating.

And then, of course, relocate this, please!

Now, you know Lucy and I and our mantra about reading the legal pack.

But in this case, I'll let you off, because there isn't one.

This flat is being sold at auction as option two,

which means no legal pack,

but you do get an additional 14 days to the usual 28 before completion,

giving your solicitor extra time to check it out,

because not knowing the legal ins and outs

could really hamper your plans.

When you're buying any property,

one of the most important things to check out, of course,

is its legal status, freehold or leasehold,

and that's particularly important when it comes to buying flats.

For instance, in this case, there's a loft hatch there

and you might think, "Fantastic, storage, or even better,

"possibly something I could expand into.

"Possibly put in an extra bedroom

"or just create a really nice loft space."

The thing is, you don't know until you check out the status

whether or not you own basically what's above the ceiling

in the property. That could be owned by the freeholder.

Get your solicitor to check it out before you do anything.

You'd need to get your finances checked out too.

Whether the property is freehold or leasehold could decide

whether you can actually buy.

Some lenders won't lend on freehold flats

as the legal and maintenance issues can be complex,

so you may need to have cash to buy a freehold property.

But one of the advantages of buying under option two

is that if there is a legal issue,

you can pull out before contracts are exchanged

and get your deposit back.

We asked along the local estate agent

to get his thoughts on the flat.

The property is in need of some modernisation.

It is in need of a new kitchen, it needs central heating,

but it's ideally suited, either for a first-time buyer or,

for me personally, there's some good rental opportunities here.

And with or without a loft conversion,

what might the flat fetch on the rental market?

Following the refurbishment of the flat,

my estimate would be £500 per calendar month.

With the additional loft conversion and bathroom facility,

my estimate would be £500-£575 per calendar month.

And on the resale market?

If the flat was to be renovated,

my estimate for the valuation would be between £65,000-£70,000.

If a loft space was created with an additional bedroom and a bathroom,

my estimate would be £75,000-£80,000.

Well, it's a pretty decent location

and quite a lot of flat for the money,

given that it's in not bad nick,

so who decided this was the one for them?

Let's find out when it went under the hammer.

Lot number 76,

it's a traditional two-bed first-floor flat.

Who wants to start me at 46?

There at £46,000. Do I have 47 anywhere else?

47? 47 bid. 48?

48 bid.

49 bid, 50.

Do I have 51 anywhere else?

51 sitting down.

52.

Sitting down at 51. 52 again?

52.

I'm here on the third row at £51,000

and I'm selling it once at 51, so you're both out?

I'm selling for the second time at £51,000.

Sold to the gentleman sitting in the room at £51,000.

And snapping this one up for £51,000 was James,

here in the white shirt, and his wife Donna.

James and Donna live locally and know the area well.

I met James back at the flat to find out his plans for this,

the latest addition to their growing property portfolio.

-James, great to meet you.

-Pleased to meet you, Martin.

-Congratulations.

-Thank you very much.

So tell me why you wanted to buy the flat.

We've got a property up the road

and we drive past it every day so we know the area.

We only live just a couple of miles up the road and we saw

that it was going for a good price, so we thought we'd go for it.

We know the location's good and we'll always rent it.

What was it about it that particularly appealed, then?

The price, mainly.

It was very reasonable and we hoped if it didn't go up too much

in the auction that we could get it for around that price

and we'd still have profit and we could get decent rentals for it.

So getting this for just a grand over the guide price

was a pretty good result.

James's solicitor gave the property a clean bill of health

and the flat turned out to be leasehold,

which means that James does not own the loft space.

So he's looking into whether he can buy that

and do a loft conversion further down the line.

So what was it about the flat itself that you quite liked?

More the location and the cost, really. We didn't view it beforehand.

MARTIN GASPS AND TUTS

But we know the style of house.

We came past it, we drive past it every day,

so we know that it's fairly sound. We knew that the windows were new.

We also knew that it hasn't got any gas,

because it wasn't advertised as having gas,

so we know that's a job to do,

but we've budgeted for it and we knew where we could go

in terms of the auction and what potential we had for making it good.

-We're still leaving a little bit of equity in it for us as well.

-OK.

You say you knew what the design was like - it's just as well,

-cos it could have been a bit of a shock when you first saw it.

-Yeah.

Had you not been aware of this kind of design, cos it's quite unusual.

Nothing wrong with it, but it's just odd.

-It's fairly standard for the area.

-Is it?

They usually often have the kitchens out the back.

The living room is bigger than we expected,

but we had seen the bedrooms were a good size.

I was able to safely assume and it was nice to turn up

-and see that I was actually right.

-Yeah.

Having bought it.

Not viewing the property before the auction was certainly risky,

perhaps even more so, as there was no legal pack to read,

but James's local knowledge appears to have paid off.

So tell me, then, what you're planning to do to sort it out.

First thing is to install gas.

There's no gas in the property, so we'll have to get that factored in.

Cost of that?

About 2,000-2,500.

-Yeah.

-Including boiler and new radiators, probably plastic piping.

-What, and getting them to connect it?

-Yep.

-Have you got a quote for that?

-Yep.

Sometimes that connection bit is really steep.

Quite fortunate that we've got quite a good gas fitter,

who's very, very reasonable as well.

-OK.

-That's quite working into our favour.

We're going to change the kitchen,

cos we don't really want it staying as it is,

so we're going to strip everything out, change the doors.

We're going to move the door over a little bit

so it just runs straight through.

We're going to keep the separate utility

and probably have space for a washer/dryer there

and then keep the bathroom as it is and take all the wood panelling off,

get rid of all the Artex, plaster the walls

and then really just redecorate throughout

and then possible loft extension if we can,

-depending on cost.

-What's your budget?

If we just keep it as a two-bed,

-between 7,500-10,000.

-OK.

-And if we extend into the loft,

-I would go up to about 15,000 for that.

-Right.

So what's the timescale?

I would hope to get it done in three to four months,

but realistically I'd allow six months to be on the safe side.

And who's going to do the work?

We'll get builders in to do plastering

and I'll do decorating and we'll get carpets fitted by professionals.

Obviously, if we do go into the loft, it'll be done by a professional,

the building regs and everything like that.

It'll be a combination of myself and a team of builders.

James and his wife have properties nearby

and plan on having more to rent

and they are also looking to sell the family home

and move to a bigger one,

but James isn't giving up on the day job as an IT manager with the NHS.

So the property side of things

is more a sort of passion and a sideline?

It's a passion but it's something we'd like to do full-time

in the long run, but you've got to make enough to make it worthwhile.

I wouldn't risk taking the jump both feet.

I'd want to do it more gradually

until we can afford just to do it full-time.

My wife's dad is a landlord,

my parents have got a couple of properties

and they've got businesses as well.

-Right.

-It's in the blood, really.

-Good.

-Congratulations.

-Thank you.

-Good luck with it.

-Thank you.

-Looking forward to seeing how you get on.

-Thank you very much.

There you go - James proving that local knowledge

is a really useful thing to have when it comes to buying property

and I'm glad that he wasn't too badly caught out

by the whole freehold/leasehold issue.

How will he get on sorting this place out?

You can find out later in the show.

Well, after the work has been done,

we hope those properties will be worth a lot more money.

Have those buyers got started or been waylaid with problems?

Yeah, because time is money.

Let's go back and find out how they're getting on.

We sail back now to Dover, on the southeast coast of Kent,

where earlier I met Debbie,

who buys and renovates properties for third-party investors.

She bought this tiny studio flat for just £36,000.

It didn't look much, but Debbie and her investor were weighing up plans

that range from a quick refurbishment to something grander.

It is just a room with a window and a door,

but a really nice, sunny garden.

Yeah. I mean, it's got loads of potential.

We haven't quite got the total plan in place for this yet,

but it is going to be possible to extend out into the garden,

because the garden's at least 40 foot long,

but at the moment I'm waiting for a price for a conservatory

that we could walk straight into, so the conservatory would be on stilts

or on a platform as such, with strong timber beams to take its weight.

That would then make this into a one-bed flat

with a stunning glass conservatory with a fantastic view.

The real potential in this flat was in that huge garden -

either as a means of extending or just as a lovely place

to bask in the summer sun.

So what was the final decision?

We came back three months later to find out.

MUSIC: "Space Cowboy" by Jamiroquai

# Everything is good

# And brown

# Oh, I'm here again

# With a sunshine smile upon my face

# My friends are close at hand

# And all my inhibitions have disappeared without a trace

# I'm glad

# Oh, I found... #

The studio has had more of a rejuvenation than a face-lift,

with new flooring throughout and a much improved kitchen and bathroom.

It still needs the final touches, but what a change.

However, the story outside is that Debbie and her client

haven't gone for an extension after all.

We decided not to go ahead with the conservatory or sun room,

simply because when we were weighing up time versus cost,

it really would have slowed us down.

Getting that planning permission would have put us months behind

and at the end of the day, it's still got a really lovely view

out of this window and when the sun shines,

that's going to be a nice little heat trap, the patio down there,

and whoever buys this may want to add on to the back themselves,

so the option's still there.

But for us, it wouldn't have worked.

I must confess,

I am a bit disappointed that there is no conservatory.

It really would have added that wow factor as well as value.

But in property development, you've got to make the time

and money work, so no point in letting your heart rule your head.

And whilst it isn't quite finished yet,

this little studio has shaken off its dingy, damp past.

This property has literally only got a new floor, a new kitchen,

a new bathroom and paintwork and that's about it.

We haven't redone the electrics or heating system.

It's the same as it was when we bought it,

so it's quite a simple one.

Outside, the garden when we first bought it

was literally just bare earth

with rather a lot of rubbish out there as well.

Basically removed all the rubbish and turfed over,

made the steps safe, because the steps were very uneven

and a little bit of a safety issue

and the garden's come out really nice.

Potentially, it could be really nice for somebody

if they're into a vegetable patch or whatever down the bottom.

There's plenty of room out there.

For this simple renovation, Debbie had earmarked a two-week turnaround,

but it took over two months, so why the delay?

It took about three weeks for us

to decide on the appropriate course of action with it -

are we going to build at the back or not?

And we also had a holiday season in the way,

but once that was all done, we've got back and we've got stuck in

and we got 95% of the work done in two to three weeks.

We've spent about 10,000 here, which is what we thought, really.

We're hoping to get a good resale price

and also we put reasonably expensive flooring in

and solid woodwork surfaces and things,

so it'll make it a little bit more attractive.

With that £10,000 refurbishment cost

added to her purchase price of 36,000,

Debbie's client has now invested £46,000,

minus Debbie's fees and taxes and so on.

So has it been a good investment

and a wise move to keep the flat as a studio?

What did two estate agents think?

There is always demand for studio flats.

Lower end of the market in terms of pricing.

There are always people looking,

so I don't think there'll be much problem in selling this one on.

I think having a garden with the flat makes it a much nicer proposition,

whether you're going to rent it or buy it,

because you've got that much more space

and somewhere to sit in the summer, etc.

When completed, this flat would sell for in the region of £55,000.

If this flat was put onto the open market,

I think would achieve somewhere in the region of £75,000.

I think 55's too low

and it'd be great if we got 75,

but I think 65's a safe bet

and we will obviously try and market it for more

if we think we can get more.

But, yeah,

I have to say I'm not totally surprised.

With an average valuation of 65,000,

that would mean a pre-tax profit of £19,000, minus taxes and expenses,

and Debbie's fee, of course.

The quality of the work means the average rental would be £450,

which, if you remember, was the predicted income

if Debbie did add an extra room, meaning a yield of 11%.

I think she'd be delighted.

Yeah, absolutely.

I mean, I appreciate it's not totally finished yet,

but it's been really simple to do, quick, easy

and I really do think it'll sell quite quickly as well,

because it's going to be a low-price property,

so I think it's an all-round good, solid investment

and I wish there were more like this.

Well, there are more, Debbie,

although maybe not quite as straightforward.

Like this two-bed, first-floor flat in Hazlerigg,

which had a rather idiosyncratic layout.

It was bought at auction for £51,000 by James,

who works full-time in IT for the NHS,

but is in the process of building up a property portfolio in the area

with his wife Donna,

and James was hoping that his local knowledge would keep him right.

We didn't view it beforehand. MARTIN GASPS

But we know the style of house.

We came past it, we drive past it every day,

so we know that it's fairly sound.

We knew that the windows were new.

We also knew that it hasn't got any gas,

because it wasn't advertised as having gas,

so we know that's a job to do.

Beyond having gas fitted, James was planning to re-jig the kitchen

and drag the rest of the flat

kicking and screaming out of the 1980s.

He had a budget of between £7,500-£10,000,

but more if a loft conversion was possible

and a realistic six-month timescale.

Well, five and half months after our first visit,

we're back to see if the flat is a little bit more up-to-date.

MUSIC: "Best Day Of My Life" by American Authors

# Ooh, ooh, ooh

# This is going to be the best day of my life

# My li-i-i-i-i-i-ife

# Ooh, ooh, ooh

# This is going to be the best day of my life

# My li-i-i-i-i-i-fe

# Ooh, ooh, ooh, ooh... #

That'll do nicely, James.

Admittedly, there was nothing to do in the bathroom,

but the rest of the flat is looking much more contemporary

and nowhere more so than in the kitchen.

Originally there were two 600-depth kitchen units on either side,

so it was actually very narrow. It was quite a tight squeeze,

there wasn't really room to turn round or do anything in the kitchen,

so what we did was actually move the door across

to make it a straight run through the kitchen and we put wall units down

on the lower right-hand side and it gives much more space.

There's much more freedom to turn round and make use of the appliances

and open the doors without hitting your knees, that kind of thing.

But replacing the kitchen hasn't exactly been straightforward.

First of all, we stripped all the wood panelling off in the kitchen

and the wiring was just a mess.

There were live wires lying all over which weren't ended.

There was dead cables in the floor

which we had to get actually disconnected and tidied away

in order to get certification so that it wasn't dangerous.

Also, when we'd finished doing the plastering

and I started doing the decorating,

there was a leak actually in the top corner of the room,

so we had to get one of our labourers up to actually fix that

and, thankfully, it's not reoccurred since,

even though we've had some pretty poor weather.

I'm glad to see that the wood has gone

and I'm also pleased to see that the huge water tank has been sorted

and a new combi boiler installed.

There was no gas at all to the property.

The previous tenants had only had electric heaters,

so I don't know how they got by in the winter,

but we had to get the gas connected in the road

and actually get the gas meter fitted and then the boiler,

the radiators, all the pipe work needed to go in,

so that was a fairly major job

and required quite a bit of planning and time in order to get it done

and obviously cost a fair amount of money.

Like how much?

It cost £3,500 in total.

The actual connection cost in the road wasn't too bad.

It was just the cost of the boiler, the labour as well, the radiators.

All the pipe work and everything as well.

Three and a half grand is certainly a chunk of money,

but I do think it was the right thing to do.

And with all that going on, it's not surprising that James decided

not to tackle the loft space this time round,

especially as he has managed

to be quite hands-on here despite his day job.

I did a lot of the stripping out originally,

and then also I did a little bit of the decoration

and fitting a few of the skirting boards

and the door handles, that kind of thing.

A lot of the work was done by tradesmen.

Unfortunately, I can't plaster, I can't do electrics

and I can't do gas at the minute,

but that's things I'd like to possibly learn in the future,

but at this stage it's just the practicality

of actually getting the job done to a good standard, and safely.

There are a few little bits to tidy up,

but everything should be finished within the six-month timescale

and the budget has come in at £9,500,

which is pretty respectable, really.

So has the outcome of the project tempted him to give up the day job?

It's harder to balance this on top of a full-time job

than I possibly appreciated,

but I would definitely consider doing it full-time

if the opportunity arose

and the financial stability was there to do it.

Well, now for the moment of truth.

A spend of £9,500 added to his purchase price of 51,000

brings James's total spend here to £60,500.

We asked along two local estate agents

to get their thoughts on the renovated flat.

The property has been done to quite a good standard

with modern living space, a very spacious, refitted kitchen

and a nice, clean and tidy bathroom.

I think the property's a really lovely, spacious accommodation.

It's a nice, neutral colour scheme and I think it would really benefit

a first-time buyer, a couple looking for their first property.

James is undecided whether to rent or sell the property,

so let's start with the rental market.

What did the experts think?

I would recommend putting the property on the market

at £450-£475 per calendar month.

This property would rent on the market at £475 per calendar month.

I would have said about 400, to be honest,

so anything above that is good, really.

It is really good, James.

That top figure of £475 per calendar month

would give you a very healthy yield of around 9.5%.

What could it sell for?

The value of this property I would state at £75,000.

I would recommend marketing this property at £75,000.

Initially I was thinking probably about 80.

A sale at the estate agents' valuation of 75,000

would mean a profit before taxes and expenses of £14,500.

He doesn't seem enamoured by the valuation, so what's his decision?

We'll probably market it at what we think is the right value

and then we'll see if we get any interest from there and then,

if not, we'll rent it.

We'll have more property auction stories for you next time,

some with happy endings and some with less fortunate outcomes.

Whatever, they're interesting stories.

-Join us next time for more Homes Under The Hammer.

-Goodbye!