Episode 2 Homes Under the Hammer

Well, the temperature's pretty nice today, but it's really difficult

sometimes to tell the temperature of the property market.

You have to judge whether it's blowing hot or cold.

And one way you can do that is to visit your local property auction.

When you go to an auction, you can soon tell whether there's

confidence in the market or everybody's playing a cautious game.

Yes, it's a very revealing snapshot of what's going on

in the property world,

so let's see what properties went up for auction today.

In southwest London, I find, or rather can't find,

a bit of a problem.

The weird thing is, I still haven't come across the bathroom and the loo.

And talking of problems, in Northumberland,

well, there aren't any.

You see? All auction properties aren't rundown,

dishevelled places that need completely rebuilding.

Whilst here in Folkestone,

will buying this house prove to be a backwards step?

Actually...whoa!

Come and have a look at this...

'All these properties have been sold at auction

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

'when they went under the hammer.'

Sold!

Today, I'm in Fulham,

a lovely part of southwest London that I never tire of visiting.

It's a prime London spot neighbouring

the likes of Kensington and Chelsea, and has certainly been known

to attract the odd notable resident or two.

Fulham also benefits from a long river frontage beside the Thames.

Now rife with luxurious riverside apartments

and perfect for a leisurely walk, a gentle jog, or, perhaps,

a bike ride in the warmer months.

There's no questioning the fact that Fulham floats my boat.

And, unlike other parts of the country,

the Fulham housing market remains very buoyant.

The property I'm here to see is only a few minutes' walk from that

lovely riverside walkway, and it's located along this

quiet residential road with attractive terraced properties.

They're gorgeous!

Now, with local amenities literally a few minutes walk that way,

well, you can't argue with this sought-after location.

I always get excited when a Fulham property comes up at an auction,

and, today, I'm here to see a two-bedroom ground floor garden flat

with a guide pride of £375,000.

OK, so it's not quite as pleasing as its grand neighbours,

but I am still fairly excited to take a look around.

The front door gives access to two flats off a shared hallway.

Well, what you lack in character, you certainly make up for in space

with these flats. It's got a really nice lounge area to the front.

I've noticed the metal-framed windows are still in place,

I'd like to see them changed and some double-glazed units put in.

We've got a bedroom here and a rather green hallway. Do I look ill?

I feel the colour is reflecting on me.

Now, towards the back, we've got a rather strange place for a bedroom.

It's not really working for me, pull-down beds,

and that's because it leads straight into the kitchen.

A very small kitchen indeed and it's lilac!

Oh, the paint palette in this flat leaves a lot to be desired, but

the weird thing is, I still haven't come across the bathroom and the loo.

This way.

# Gotta keep searchin', searchin' Find a place to stay

# Searchin', searchin'... #

So far, the layout of this flat, which was guided at 375,000,

just feels a bit wrong to me...rooms off corridors

and the kitchen off this room, but my searching's paid off. Ha-ha!

I've found the bathroom.

# Gotta keep searchin', searchin', wee-ooh... #

Go through the kitchen to an area that feels like an outbuilding

and there it is.

It's going to need a total rip-out and refit, like the kitchen,

but I'd be looking to redesign the whole footprint

at the back of this flat,

and you're going to need to install central heating, you're going to

need to rewire, and I'd think about changing those 1950s fireplaces too.

There's wasted space from a blocked up staircase between the kitchen

and bedroom, which once would have allowed the first floor access

to the garden. Did I say garden?! In London?! Yes, I did.

Things are certainly looking up.

Wow! Just look at the size of this garden.

Any kind of outside space is at a premium in London

and this is not just a small rear yard.

Excitingly, this also gives us options for

improving the size of the flat.

My thoughts are that you could extend over the side return

and also further out here to the rear.

That would give you a much bigger footprint to play with.

Then the bathroom could be moved to the bedroom next to the kitchen,

the front lounge would become your second bedroom and,

with a lovely new extension at the back,

you could have an open plan living area with access straight out onto

that huge garden, with, perhaps, a patio for those summer barbies.

OK, a big upside here. So, what's the downside?

I'm afraid there's more than one.

So, you might only be moments away from the River Thames, but, just

down the road, you'll also encounter Fulham's football stadium,

which has a capacity of over 25,000 people.

Great news if you're a football fan, but not so much to cheer about

if you want to park your car here on a match day.

Now, if the buyer of this property hasn't done their homework,

this could be an unexpected own goal for them.

Restrictions mean that you can't park outside your own property

between 9am and 9.30pm on match days. Not very convenient!

Now, downside number two, the lease. There's only 77 years left on it.

You're getting close to the 70-year mark at which it can be very hard

to get a mortgage. Extending it could be an option, but at a price.

Then, of course, there's the usual issue with a leasehold property.

Will the freeholder let you make changes you want to make?

So, a lot to consider there. What does the local estate agent think?

Having had a look around the flat today, actually, although it seems

like it needs a lot of work, it's actually a fantastic project.

We're in a location called the Alphabets, which is

a part of the Bishops Park Conservation Area in Fulham.

The implications of it being a conservation area are that

you need to look into the planning regulations so you don't change

any aesthetic that would go against planning.

OK, just another thing to think about.

So, is this flat worth tackling, particularly

if you could get all the permissions to extend it?

What would it be worth?

If the property was fully extended and renovated,

with a long lease, I would expect it to achieve no less than £775,000.

What about the value without an extension and just a refurbishment?

If the property was renovated, leaving its shape the same,

then I would expect it to achieve no less than £600,000.

And the rental comparisons, with or without an extension?

If the property was renovated in its current size,

I would expect it to achieve £1,700 per calendar month.

If the property was fully extended,

I would expect it to achieve £2,100 per calendar month.

This Fulham flat is full of potential.

Make the right decisions

and you could really reap the financial rewards.

However, you certainly need money to make money with this one,

and, despite the lovely location, there's a penalty to be paid

when buying something so close to a major stadium.

Let's see who decided to tackle this property on auction day.

Ground floor flat, Fulham, SW6.

350.

350. 355.

355 at the back. 360.

365.

Yeah, 370.

375.

380.

385.

390.

395.

400.

405.

Anyone else? I'll take 401 at the back.

401, sir. 402.

402. 403.

404.

405.

406.

406, new spot. 407.

410. 411.

412.

412. 413.

414.

415, yeah? 416.

417.

20? 421.

422?

If not, 421, first time,

second time, third and last time. Have you all done?

Sold. 421.

That final bid of 421,000 was made by Tim...

..who has a business partner, Dan.

However, it was Tim and their builder, Jason, who came

along to meet me at the property, which is Tim's second auction buy.

Tim is from Australia and has been developing since late 2012.

Tim and Jason, great to meet you guys today.

I love the location of this flat. I mean, how fabulous.

You are right on top of the river.

Yeah, I know, it's fantastic, I mean, as far as down by the river,

you've got people basically going down there with their dogs,

you've got people jogging, a lot of people riding these days as well, so

it's a perfect distance there and it's also really nice and quiet.

So, what did you do prior to becoming a property developer in Australia?

Well, I was actually studying in Australia. I'm still studying for

my Master's as well, that's in marketing, cos that

gives me a good insight as far as trying to pick some places,

do a lot of research on the places and getting it to sell at the end, really.

So, Jason, you're here to sprinkle the fairy dust!

I am, I'm going to try and make the place look slightly better than it does at the moment.

What are you going to do to really turn this place around?

Um, it needs a complete rewire.

It needs some central heating, plaster all the way through,

colours, palettes, new doors...

-We're going to try and make it look great.

-New doors?!

-Oh, yeah.

Now, see, I love... There's not much character in this flat at all,

but I would say those doors are lovely. They're so expensive to buy

brand-new. Have a think about that one, Tim.

I think we will. I mean, certainly, it's also about not only

the doors, but I really love the fireplaces as well.

-They've got a lot of character...

-You like these fireplaces?

-I think they've got a lot of character.

-We're going to have an argument!

-Oh, I love this!

I'll tell you what we'll do, we'll compromise on the doors,

-you can keep your doors, but they're doing.

-Jason, Jason!

-I'm sorry, but I'm with Jason on that one!

-Well, there we go.

We'll see what happens in the end.

Well, I hope Jason and I win this one.

Something about the '50s was not so fabulous in my opinion.

They've just got to go. No, seriously, they HAVE got to go!

So, tell me, in an ideal world, how you would like to address

the layout here? Because it just doesn't work as it is at the moment.

Subject to the right permissions,

remove the staircase at the back that is literally a staircase

to nowhere, and then move the bathroom through

and open up the entire back area through to a new conservatory,

letting quite a lot more light down the hallway.

And how many bedrooms do you hope to squeeze into this property?

Well, at the moment, we've actually got two bedrooms, as it stands.

There is a possibility of possibly making it into a third bedroom, but,

at the moment, we're basically going to decide between two of the options,

either going for the third bedroom or either going for, basically, a

much bigger bathroom, which will give a lot more space down to the end.

# The bigger the better, the bigger the better

# The better the bigger... #

The plan is to do this flat up for resale, but, before they even start,

Tim and Dan have already demolished one of the flat's downsides.

They've spent £14,000 extending that 77-year lease to 99 years.

Smart move, boys. So, how much more are they planning to spend?

Well, basically, the budget, we're looking around the 55,000 mark,

pretty much topping out to 60.

Certainly, I think we'll be able to achieve that.

Guys, I can't wait to see what it's like when it's finished.

-Good luck with this project.

-Thank you.

-Thank you.

Tim and his builder Jason have a lot of work to do

and they really need to improve that layout.

Will they manage to create that third bedroom

and still come in within their budget?

You can find out how the boys get on later on in the show.

Well, it looks like Tim and Jason have a battle on their hands

to sort the layout in the flat, and I've come to a place which has

had its own share of battles over the years.

I'm in the town of Ponteland,

about eight miles northwest of Newcastle upon Tyne, so it's

easily commutable, and yet, you've got all these lovely surroundings.

But, it's also got a very turbulent past.

In the 14th century, Scotland and England were at war, and this area

was on the front line

and the Ponteland Pele Tower was one of many built along the borders,

on top of which fires would be lit to warn of impending danger.

The local villagers would also run in here

and huddle together to shelter from the invasion of marauding troops.

So, what kind of shelter am I seeking out today?

Well, for a guide price of £99,950 plus...

up for auction was this, a two-bedroomed cottage.

Looks charming from the outside. Let's take a look inside.

Mmm! It's looks good.

Nice sort of neutral colour scheme

and the stairs up to your bedrooms there.

Into the front lounge, double-glazing,

it's got a nice feel to it. Yeah, straightaway I like it. Oh! Ha-ha!

That takes me back to student days. The old iron mark on carpet.

It's a trick, yeah! Oops! So, new carpet required, but look at this!

At the back of the property,

a really good-sized kitchen with ample space there

for a kitchen table or a dining table.

Yeah, what a nice, nice, nice space, and it gets better,

because through here, a little bit of a utility room,

downstairs loo, somewhere for your washer and drier.

Straightaway, a very liveable house.

# Say, hey, good lookin'

# What ya got cookin'?

# Well, how's about cooking somethin' up with me? #

Yes, this looks like there's all the ingredients here for

a pretty together house.

A great-sized kitchen with dining space, a good lounge,

and then there's the added bonus of that utility area.

Outside, there is a slightly disappointing yard,

but there is parking at the rear.

# Say, hey, good lookin'... #

Nice wooden banister. Does the loveliness continue upstairs though?

Yeah, I think it does.

A lovely bathroom, fairly recent, nice white suite.

Um, and then two decent-sized double bedrooms.

I mean, it could do with a lick of paint. Um...

Well, that's it. I mean, you could rent this out pretty much as it is,

or just move into it. Ideal. You see!

All auction properties aren't run down,

dishevelled places that need completely rebuilding. There!

# You're lookin' good

# You're lookin' so good

# All right, you're lookin' good

# Like I knew that you would. #

Don't worry, you haven't missed anything.

These really are the before shots, not the afters.

I'm really struggling to find much wrong with this place.

A quick make-over inside, and I think maybe the front could be given

a bit more kerb appeal. The fence and the front garden are

looking slightly sorry for themselves, but that's it.

The only downside might be that it's hard to add value to a house

that was guided just below £100,000.

But what does a local estate agent think?

This is a very nice two-bedroomed mid-terrace cottage,

formerly a railway cottage, in the centre of the village,

close to all amenities, the park, and the sports facilities.

The property just has it all and that's what worries me.

Would there be any room to add value?

The yard itself is very plain just now, but provides off-street parking.

It could be changed to make a nice patio garden.

OK, so there are a few things to be done, but could this house,

guided just below 100,000, work as an investment?

This house, once fully refurbished, should be

worth in the region of £130,000.

And as a rental property?

This house should achieve somewhere in the region of

£595 per calendar month.

Well, what a charming little property,

and you could literally move into it as it is.

I'm sure a very popular lot when it went under the hammer.

How about 98?

98,000, the gentleman sitting down.

Do I have 100 anywhere else?

100,000, sitting. Thank you. 102.

No? 101. 101 bid.

102.

102 bid. 103.

103. 104.

104 bid. 105.

105 bid. 106.

106, new bidder. 107.

107 bid. 108. 108 bid. 109.

No. So, 108 sitting down. 108-and-a-half then.

108-and-a-half bid. I'll take 500 off you as well for 109.

I'm going one to 108-and-a-half.

I'm going for the second time of £108,500.

Sold to the gentleman sitting down.

'And so, for £108,500, the successful bid was made

'by Brett on behalf of his partner, Ruth.

'Ruth and Brett live on the coast 18 miles away

'from the house in Whitley Bay, and Ruth works as a support worker'

in a residential home for adults with learning difficulties.

She took off some time to meet me to tell me

why she bought this former railway cottage.

-Congratulations.

-Thank you very much.

-Uh, you must be delighted.

I am, actually, yeah.

Very delighted, because I didn't know what it was like inside.

How do you mean?

-Cos I hadn't viewed it.

-Why?

Because I didn't really intend to go and buy it that night.

I mean, obviously, I did make sure that I had enough money to

-pay the initial deposit.

-And what about the rest of the money?

Well, I think I've probably nearly got that together now.

What do you mean, "nearly"?!

Well, I didn't have my finances in place either.

-Any more rules you're going to break?

-Probably lots.

So, have you got your finances yet?

Um, I'm going to the solicitors tomorrow to sign everything.

-So, no, in other words.

-Well, yeah, but I'm sure it'll be fine.

Thankfully, Ruth isn't quite as fly-by-night as it seems.

She has a buy-to-let mortgage pending and has also used her

own savings and a loan from her mother to secure the property.

# When I set my mind to it

# There ain't no doubt I can

# Cos I'm breaking all the rules

# Doing it my way, anyway I choose to... #

And this isn't the first time Ruth has done this.

The property she currently lives in, she bought at auction.

Didn't view it, and didn't have all her finances in place either.

It seems she's a repeat offender when it comes to

rule-breaking on property buying, not something I'd advise at all.

# This girl's breaking all the rules... #

So, when you tell me about a whim, at what point did this whim occur?

Well, I'd seen it in the paper and I got home at about five,

and I thought, "Hmm, will I go for a run or will I go to the auction?"

It was this or a run, as in a jog thing?

Uh-huh, I do a little bit of jogging, you know.

-The Great North Run, have you heard of that?

-Oh, yeah.

Well, that was coming up.

It was, like, two weeks after the auction

and I was trying to cram in a bit of training.

Wow, that's like a half-marathon, isn't it?

I've done it a lot of times. I'm quite fit for an old woman!

-How many times have you...?

-That was my 29th.

29th time?! Wow!

# Run for home, run as fast as I can

# Woo-ooh

# Running man, running for home... #

So, Ruth traded a run for a home. Wow!

And, in this case, it doesn't look like a marathon or even

a half-marathon effort to get this place sorted, or even a gentle jog.

The only thing she might break sweat over is those finances.

What was it that, um,

appealed so much about this place that you took such risks?

It's quite cheap for Ponteland.

I know the property, you know, although I hadn't seen it,

I've lived round here most of my life.

-Um, my grandmother actually grew up in the house next door.

-No!

Yes, yeah. Her father worked on the station.

So, did you visit her when she was there?

No, no, because she left when she were...

She was 28, I think, when she got married.

So, why were you so keen to buy it?

Well, I thought maybe my mother might come and live here

because she lives about four miles up the road.

Um, she's just had a hip replacement,

but I don't think she wants to at the minute.

I think maybe later cos she's driving again now, so, maybe I might move in.

-You might move in?

-I might, mm-hm.

How are you going to decide what you're going to do to the place?

Um, I think, initially, I will probably just decorate it, um,

maybe check to see if there is any real problems, you know,

like structural things.

My partner's a builder, so he will come and check it out,

cos he hasn't seen it yet either.

-Huh!

-But I think, initially, I'll just decorate

-and maybe rent it out for a while, while I decide what to do.

-Right.

So, at this stage, it's just going to be a lick of paint, is it?

I think so. Maybe carpets.

Is there any budget at all to do what you're planning?

There might be a little bit. I could probably spend up to £2,000.

What would be the deciding factor on whether or not you move in?

Well, if I do move in, I don't think my partner will come with us,

because he doesn't want to live up here, so...

Is that? Uh...?

That doesn't mean that I would not see him any more,

but I think he would maybe stay nearer and I would maybe come here.

-It sounds like a fairly big life decision there.

-Oh!

Have you mentioned this little...?

I have mentioned it, yeah, that I might live here.

Cos I was going to say, if he sees this on telly and goes,

"Hang on a minute!

"Where is she?!"

I probably would tell him first.

I think he'd probably notice.

"I thought you'd been a long time with me tea!"

Well, he probably thinks I won't do it, but I might.

Oh, OK, well, we wait with bated breath.

Yeah, well, I'm sure you'll find out when you come back.

Well, yes, absolutely. Um, good luck with it all.

-Thank you very much.

-Lovely to meet you.

Well, it's all quite humorous, however...

..buying property without reading the legal pack is bad enough,

but not having your finances sorted out is absolutely...

..just asking for so many problems.

It seems like Ruth has got away with it, not quite sure what she's

going to do with the place, I don't think she is either.

The only way to find out is to join us later in the show.

Coming up, in Kent,

this Folkestone house will need to be completely checked out.

Because they are worrying signs!

And we meet Ruth's rule-breaking accomplice.

She's actually done it twice now.

Actually, funny enough, both times, I've been with her.

But, first, we return to the rather desirable area of Fulham in London

where we came across a slightly less than desirable

two-bed ground floor garden flat.

It wasn't just that it was really in need of a full refurbishment,

it was more the fact that the layout...well,

it really wasn't working.

Wasted corridor space...cubbyholes, odd-shaped rooms,

and there was a rear garden that could have been made more of.

# A change...

# A change will do you good

# ..will do you good

# A change will do you good... #

There were other niggles.

It came with a relatively short lease

and there were parking restrictions because of the flat's

proximity to a football stadium, but the layout was the big issue to be

tackled before this flat could hold its own in the high-end

of the Fulham market.

-Sold, 421.

-And it was bought for the not-so-insignificant sum

of 421,000 by Australian-born Tim in conjunction with

his business partner, Dan, as their second development project.

And Tim and his builder, Jason, were keen to alter that messy old layout.

-# A change...

-A change will do you good... #

So, tell me, in an ideal world, how would you like to address

the layout here? Because it just doesn't work as it is at the moment.

No, you're right. I'd like to move the bathroom through

and open up the entire back area through to a new conservatory.

And how many bedrooms do you hope to squeeze into this property?

Well, at the moment, we've actually got two bedrooms as it stands.

There is a possibility of possibly making it into a third bedroom.

Uh, but, at the moment,

we're just basically going to decide between two of the options.

Either going for the third bedroom or either going for a much bigger

bathroom, which will give a lot more space down to the end.

Tim was keen not just to change the layout, he was also planning

a top-spec finish, and therefore had a healthy £60,000 budget,

and he was hoping Jason would be able to turn

it around in three to four months.

But now, over ten months later, we're back with Tim to see if,

at last, it comes up to spec.

That's a crisper exterior, with new doors and windows,

but it was inside where the work was really needed.

Well, the front room has been fully renovated and central heating

installed, while that funny little corridor bedroom

has now been converted to a storage area.

And a great modern family bathroom.

The bedroom at the rear, well, that's definitely improved now.

It's even got its own en-suite.

But what's lurking at the back of the flat?

Wow! That's not a conservatory!

That's one full-blown fantastic extension. I love it!

With a top-spec kitchen and loads of living space, complete with

bi-folding doors out to a revamped low-maintenance garden.

Just what's needed! It's all very impressive.

So, why the change of plan?

Basically, the reason why we decided to go for an extension rather

than a conservatory is pretty much maximising the use of space.

And, as far as the area in Fulham

and what people basically want in a kitchen

and what people want in an entertaining area, it really is

necessary, and really a conservatory just wouldn't have been good enough.

I have to say, I agree with you, Tim, and this addition has moved the

flat from being ordinary to special and into the next price bracket.

With the change of plan also came a change of builders,

with his previous builder, Jason, deciding this size of project

and the time it was going to take just didn't fit in with other

work commitments.

But it's not only his original builder that's gone.

Well, as far as keeping any of the original features,

like the fireplaces and the doors,

we did actually get rid of the fireplaces and we not only got

rid of them, but we actually hollowed them out as well, basically,

to create a bit more space.

As far as the doors go,

we were actually quite keen to actually keep them,

cos they were a lovely original feature,

but the main reason is they were a little bit warped

and as far as fire regulations to make sure that they

covered that, they didn't actually come up to scratch.

Well, I for one am glad to see the back of the fireplaces,

and the doors...well,

with the finishing look that Tim was after, I can see why they went too.

But what was Tim's main role here?

Pretty much just running around,

trying to source all the equipment, all of the materials,

deal with all the legal side, with the accountant,

with the surveyor, with the architect, with the lawyers,

with the council. So, really, I've just been running around,

so busy doing all these sorts of things,

and I've been backwards and forwards from Australia,

basically finishing my Master's in marketing, that's almost done,

so it's been very, very busy doing this as well as doing that.

Tim makes popping back to Australia sound like he's

popping down the shops

rather than to the other side of the world, but I suspect,

like his Air Miles, he's clocked up some serious amounts of money

getting this renovation done.

Originally, we were thinking about 60,000, but, in the end,

we actually ended up doubling our budget, which was basically 120,000.

Obviously, there's a huge amount more costing

as far as the extension, and, also, we had the lease extended,

so that way anyone can get a loan,

which basically came at £14,000, and, also, obviously, the finish.

We wanted a nice high finish,

so they're the sort of costings as well.

The finish is fantastic,

so I'm not surprised they blew the original budget.

That 120,000 now takes his and his business partner Dan's outlay

to a total of 541,000 for what is just a two-bed flat,

albeit a very nice two-bed flat.

So, will it hit the right mark for the local market?

What do two property experts think?

I'm absolutely blown away with the changes, I think

they've done a phenomenal job, the finish is extremely high and they've

created a wonderful flat.

First impressions...is, I suppose, it's quality.

So, flooring really nice,

light switches, tiles...

It feels like someone's taken care into the finish.

It will really pay off when it comes to market.

I think the extension was absolutely the right thing to do.

They've managed to incorporate excellent light and space,

used the full width of the property, and the opulence they've

brought into the rear addition is fantastic.

Ideally, Tim and business partner Dan want to sell

their £541,000 investment, but how would it fare on the rental market?

This property, on the rental market,

would achieve £1,950 per calendar month.

I think rental value on this flat will be

£2,000 to £2,200 per calendar month.

Around two grand a month rental would generate an annual yield of

around 4%, but, really, it's the resale that's key here.

Can there really be money in a two-bed garden flat

when you spend £541,000 on it?

If this property was to go onto the market for resale,

I would expect it to achieve no less than £850,000.

I think the resale on this property will be £850,000 plus.

Well, that is incredible.

That's a potential pre-tax profit of £309,000.

What does Tim make of that?

Wow, I mean, 850,000, that's really amazing, I mean,

I wasn't expecting we'd get that sort of price for this property,

but, yeah, in the end, I think it really shows we're very vindicated

by the extra work we've put in and certainly with the extension.

Yes, sometimes aiming high can get you the best rewards,

particularly in the current buoyant London market,

though the potentially substantial profit will be split two ways.

Is Tim now ready to put his feet up and enjoy the fruits of his labour?

Well, as much as it would be nice to lie on a beach somewhere,

unfortunately, that's not the case. Pretty much, if we want to keep this

going with the business, I really think we should be straight back

into the options and trying to get the next property.

Wow! That really was some project in Fulham and that potential profit

is making my head whirl. I still can't believe it.

I need somewhere to calm down,

and where better than a trip down to the coast?

This is Folkestone in Kent.

Once a small fishing village, all that changed in the 1840s

when the harbour was dredged and the railways arrived.

Suddenly, trade and tourists flocked to Folkestone and the area boomed.

Although the industry in Folkestone has faded over time,

it's still full of day-trippers in the summer months enjoying

the beach and the reasonably new creative quarter, a regenerated area

of the old town now buzzing with artists, shops and cafes.

Folkestone really is a lovely little town, which bodes

well for our property today as it's a mere ten-minute walk away.

The property I'm here to see is standard auction fare.

It's this two-bedroom mid-terrace which had a guide price

of £65,000 to £75,000. I'm going to check it out.

Well, dated, as I'd expected,

but nothing a little bit of elbow grease can't remedy and,

if gas central heating is high on your hit list,

you've got to take note that you've got storage heaters here,

but let's go through and see what the space is like in here.

Fantastic! Now, the good news is that somebody's already

taken the time to knock this wall down

and put an RSJ in the middle,

but, what I really like is that you've a double aspect room,

two big windows either end letting loads and loads of light in.

But, um, something that's drawing me to the end of this room and,

actually...whoa! Come and have a look at this.

Now, usually, I'd expect to feel a sort of spring,

the joists may have gone, but come down here.

That is almost like the floor has just dropped.

# Slide away

# And give it all you've got... #

A sloping floor can be a sign of a big, costly problem,

but that's just the start of it.

Now, this also really worries me.

Look at that crack! Absolutely huge.

And over here, another one the same

and it goes right the way across the ceiling.

If there's one thing I might advise anybody

when they look at property before bidding at auction -

get a survey done, or get somebody round

who knows about stuff like this, because they are worrying signs.

# There may be trouble ahead... #

A sloping floor and big cracks in the wall

could very well be signs of - you guessed it - subsidence.

Get that surveyor on speed dial, pronto.

# Let's face the music and dance... #

The kitchen at the back needs modernising...

Oh - hello, serving hatch!

It's a good size, though, and leads out into the nice

but small back garden.

However, what's this?

Signs of damp on the rear wall,

which may well have a bearing on what's happened inside.

Upstairs you have a very dated bathroom to the back,

and in the middle bedroom - yes, sadly you CAN see the cracks,

they continue from the living room. Ouch.

The front bedroom, while a great size,

also has its own assortment of cracks and crevices.

Whether this is an investment opportunity or a potential nightmare

is something I need to chew over.

Talking of which, I need cake!

So, could this property make you some instant cash?

This is still a reasonably low-value area, and I don't think

the renovated house would achieve much more than you'd spend on it.

But just look around you -

Folkestone has really changed over recent years, and the town feels bright and hopeful.

So maybe, this is one to keep hold of in case the future gets even sunnier.

In case you think that's the sugar rush talking,

we asked a local estate agent

for his opinion on this crumbly two-bed terrace.

This house is very worn and very tired, but ripe for a complete

make-over and repair,

redecoration and modernisation.

But with a guide price of 65,000 to 75,000,

what might this house be worth once fully refurbished?

Refurbished, the value rises to probably £125,000 to £130,000.

Now, hang on,

I know you may be thinking, sounds like a whacking great profit

for a refurbishment and sell-on job -

but what you have to take on board here

is the fact that you're not just talking about

new windows, kitchens and bathrooms,

central heating and redecoration,

there could really be major structural issues to fix.

If that's the route the buyers choose, it's about

not overpaying at auction, and about keeping those renovation costs down.

For me, though, it's waiting for an upturn in the market,

and renting in the meantime -

I think that is what makes most sense.

Fully refurbished, the rental value here

will be about £550 to £600 per calendar month.

It needs a lot of work

but I reckon this house could be a wonderful little renter,

near an extremely charming part of town.

Well, let's see who was swept away by this seaside home at the auction.

It's a two-bedroom house for total refurbishment,

and it's a good-looking house from the outside.

Start me where you will, doesn't matter where we start -

65 to go? 65, I'm on the way.

I have 65 and I should think so too.

At 68 now, do I see? 68, do I see?

I'll take two if it'll make a difference. 67?

67, I'm obliged. 67 I've got.

68 now. 68 I have.

69, it's against you.

At 70,000, can I say?

£70,000, I've got. 71 now?

71, may I see? 71.

72... 72...

Come on, for another £1,000.

72,000? 72. 73...?

If not, at £72,000 at the back for the first time,

£72,000 for the second time...

Third and final time at £72,000, are we all done?

-HAMMER BANGS

-Yours at the back at 72, and thank you.

Stuck at the back with his successful bid of 72,000

is Andy, who was at the auction with his son Lee.

# When the going gets tough, the tough get going... #

The pair run a family business adapting homes for the disabled.

They're builders by trade,

and will need every bit of the experience for this property.

-Lee and Andy, congratulations, you must be so pleased you got this on auction day.

-Yeah.

-We are, yes.

-Whose idea was it?

-Mine, really.

It was just I had a lack of work coming in

so we just decided to put money together and see what we can do.

What was it about this house that took your eye?

I think actually the layout of the house was one,

two, the amount of work that's required

to bring it up to a good standard.

There's windows to do, there's the kitchen we're going to refurbish,

the bathroom upstairs,

there's damp problems we're going to attend to.

On the whole the property itself,

like most houses you get a little bit of movement, you get a little bit of cracks.

We understand that, we're in the building game.

So we can address them, and address them to a fairly good standard.

These two are experienced.

They're both qualified electricians,

and have gone into this with their eyes wide open.

Lee's been working with his dad since he was 16,

and it's that working relationship and their combined experience

that will be invaluable in this project.

Can we have a chat about the floor,

and why I'm wanting to go like that...?

Because it just leans that way.

We feel a lot of it's through damp, from upstairs.

The gutters haven't been sealed properly

and literally the water's been cascading down the wall,

and it's made all the kitchen damp and

obviously the ends of the joists that

were supposedly attached to the wall...

Have the cracks got anything to do with that?

I don't think the cracks have anything major to do with that.

When you get consistent all the way down cracks,

you often find that part of the building has moved,

but not tilting away or subsiding.

In this particular case here obviously

this wall HAS moved,

but at the same time obviously the actual movement itself is not a vast amount.

So you don't think that's subsidence, you think it's just due to damp?

Just movement and damp, yeah.

Now, are you going to get that investigated further?

Not necessarily at this point here, but what I will do

is I will open that floor up completely,

and in most cases that I've found through experience

where there's been so much damp you would get rot,

and it's the end of the joists that's rotten.

When I do open it up, if I see that there is

any structural problem or anything I need to address, then I will do.

Andy and Lee won't know for sure

until they've started lifting those floorboards.

Thankfully, they have all the skills required for a job like this,

but, new kitchen, new bathroom, new windows, total refurb -

what's their budget?

Cos we're doing the work ourselves we're looking at roughly

between £12,000 and £15,000.

OK. And are you intending to be here full time?

-Full time. Yeah.

-One of us.

Cos we're going to keep the other part of the firm going as well.

And then you'll swap over, so one will be here on site,

-somebody else will be at home with the business.

-Right.

How long do you think it's going to take you until you've completed the job?

Well, we're looking at possibly between 10 and 16 weeks.

Do you want to put this house on the market and sell it?

We're going to wait until after we've done it.

We would like to put it on the market -

we'll take the option that obviously if it doesn't come to the price

that we would like, we will then look at the rent.

Lee and Andy, good luck with this project.

I can't wait to find out if everything runs smoothly. Well done.

-Thank you very much.

-Thank you.

-Thank you very much.

Andy and Lee are the perfect pair to take this place on -

calm, composed and unfazed

by the potentially major structural issues this house has.

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

Well, it's time now to go back to those properties

and see how the new owners have got on.

Yes, did they manage to stick to their timescales and budgets? Let's find out.

It was in the old Northumberland town of Ponteland where we first saw

a two-bed terraced house that was, well, pretty together really.

There was the odd marked carpet,

a front garden that could do with a tidy-up,

but other than that a bit of elbow grease,

a lick of paint and job done.

Not that support worker Ruth knew any of this

when she bought it at auction for £108,500,

with her partner Brett bidding on her behalf.

# Cos she don't play

# She don't play by the rules... #

-You must be delighted.

-I am, actually. Very delighted.

-Because I didn't know what it was like inside.

-How do you mean?

-Cos I hadn't viewed it.

-Why?

Because I didn't really intend to go and buy it that night,

but...I just went on a whim.

I mean, obviously I did make sure that

I had enough money to pay, you know, the initial deposit.

And what about the rest of the money?

I think I've probably nearly got that together.

What you mean, "nearly"?!

I didn't have my finances in place either.

-How many more rules are you going to break?

-Probably lots!

# I said, she don't play

# She don't play by the rules... #

Yep - a blind purchase

and no funding in place is NOT the recommended approach.

And because it was bought on a whim, Ruth didn't really

have a clear idea of what she was going to do with the house.

Her mother might move in, she might move in.

She might sell it, she might rent it. Who knows?

So, nearly three months on, are things any clearer?

Well, the front area has been tidied up, so SOMETHING'S been happening.

It's been a very good one.

It didn't need too much work done to it, just really decorating and things.

And it's only really taken probably two to three weeks.

Originally I did have a tenant, who was my son's friend,

but she decided that she wasn't going to live here

because it was going to cost too much.

Ruth's friend was happy to rent it out without any changes,

but when that fell through, Ruth and her partner Brett decided

to get the paint brushes out and do a general tidy-up.

In the bathroom we've washed everything down,

given it three coats of good quality paint,

stuck skirting boards back on, cleaned everything down,

renewed the shower curtain - basically made it liveable.

Brett is a builder and had the electrics and the plumbing

in the house checked out.

And the flooring was updated in some rooms.

But what is the plan for the house now?

I think just to keep it rented out for two to three years

and then make a decision afterwards

whether my mum might live here, or me, or whether I will sell it.

I won't be living here, though.

Righty-ho. Moving swiftly on!

This might not be Brett's next home

but how much did it cost to get it ready for...whoever does move in?

The original budget was about £2,000.

That included fees and mortgage payments.

And I think we probably have come in just around on budget.

£2,000 in addition to the £108,500 purchase price takes Ruth's

total costs to £110,500.

So, has this actually been an inspired purchase?

What do two local estate agents think of the house?

I think that not a great deal has been done to the property.

But it has been freshened up and redecorated

and it looks very pleasant.

I think it looks really good.

The current owner has done a good job at redecorating

the property to give it a nice

fresh and airy feeling.

And a nice blank canvas for the new potential tenant or new owner.

I would have changed the kitchen

and updated it with better quality units and appliances.

Personally, if it was a long-term investment,

I would have upgraded some of the fittings and finishings,

for instance the kitchen

I would possibly have done to a higher spec and I would have continued

that throughout the floor coverings

and potentially the bathroom as well.

Ruth plans to initially rent the house out, but what is

her £110,500 investment worth currently on the resale market?

I would expect this to achieve in the region of 115 to £120,000.

If I was to put this property on the sales market,

I would hope it would achieve between 115 and £120,000.

That is exactly what I expected. I thought they would say that.

And I think that is really quite good, considering what we paid

and how much has been spent. I would be quite happy with that.

So, potentially a small pre-tax profit of between £4,500 to £9,500.

But for the moment, this house is aimed at the rental market.

I would expect it to achieve around £600 per calendar month.

If I was to put this on the rental market, I would hope to achieve

somewhere between 550 and £575 per calendar month.

I think that's very good.

We have actually rented it out for 550 and I am quite happy with that.

That is great.

She has got a tenant and at £550 per calendar month, that is

a rental yield of just below 6%.

So, despite breaking several Hammer golden rules,

Ruth's done OK here. But is Brett worried about Ruth taking

another trip to the auction room?

I'm not, because she has actually done it twice now.

Actually, funny enough, both times I've been with her.

And both times she has been successful with what

she has been looking for, and both times she's done really well.

# Nothing I can do

# Cos she don't play She don't play by the rules

# I said she don't play She don't play by the rules... #

Well, if Ruth's renovation was as straightforward as they come,

the two-bed mid-terrace in Folkestone was anything but.

Bought by father and son team Andy and Lee for 72,000,

it had worrying cracks and a slanting floor.

Dad Andy and son Lee run a plumbing and electrical company

that specialise in adapting homes for disabled people.

Andy and Lee weren't in the least fazed by the state

of the property and plan to do the majority of the work themselves

and were undecided whether to rent or sell the property once complete.

This is their first independent property project

and they certainly jumped in at the deep end.

Can we have a chat about the floor

and why I am wanting to go like that, because it just leans that way?

We feel that a lot of it is through damp, from upstairs.

The gutters haven't been sealed properly

and literally the water has been cascading down the wall

and it's made all the kitchen damp and obviously

the ends of the joist that were or supposedly attached to the wall.

Have the cracks got anything to do with that?

I don't think the cracks have got anything major to do with that.

Despite a long old list of jobs ahead,

Andy and Lee remain confident.

Now, nearly nine months later, we're back.

By removing a wall and adding a banister to the stairs,

Andy and Lee have opened up this once dingy living space.

They have also levelled the sloping floor and plastered

and painted the entire area.

A brand-new kitchen has been fitted, creating a bright and fresh feel.

Moving upstairs...

Well, the good work continues, as does the replastering and painting.

The cracks in the master bedroom have been dealt with

and the whole of the upstairs just feels fresh and rejuvenated.

With a lovely new bathroom, Andy and Lee have transformed this

once damp, cracked and broken two-bed terrace

and turned it into a beautiful family home.

For me it's the layout change downstairs that has just made

the biggest difference here.

Yeah, as you can see we took this wall out, Mum,

in her ultimate wisdom, said, "Take the wall out." I said, "No."

She said, "Yes." In the end, she got her away.

The wall came out,

then we could put the steels in to prop the wall upstairs.

The floor came up, it is nice and level now.

We put this beam in here to try and take up the level of the floor

in the hallway as well, where that had dropped, all because

of literally this wall.

So, yeah, it has made it a lovely family room now

so we're really happy.

The problems were partly caused by poor guttering

and inadequate drainage at the back of the property.

By replacing the problem guttering and repaving,

the boys have been able to fix a big, persistent problem.

Martin and I are always going on about the importance

of maintenance. Well, it just shows you how simple

things like ignoring guttering can lead to real serious issues.

So what else did they have to tackle?

New plastering to every room.

Electrical, plumbing, new boiler, new radiators.

Plus also we found other problems in the house

when Lee was draining the cistern upstairs.

The tank itself had a hole on the side

that when he moved the tank, water just poured out of it.

And as he was draining it down into the bath, opening the taps up,

the U-pipe, which is a copper U-pipe, had worn away.

And I was below at the time and as he was draining it down,

the water just poured down, poured over me

and the kitchen was hence completely soaked. So the poor person

that was living here beforehand had this problem to contend with,

where every time they had a bath, it was just coming through

the ceiling and then going downstairs into the kitchen

and absolutely soaking the kitchen.

It was hard work, but we got there.

Got there, they certainly have. Both are qualified electricians

and have managed all the other trades as well.

We haven't had to have anyone come in to help us.

We've done the windows, the doors.

All the plastering we've done together.

My father done the nice banister, the rail for the stairs.

We've had my sons, both sons, helping.

Mum, I had my wife down here, nieces and nephews coming to help.

So we have had a lot of help on the way.

And some of it has been a bit yucky,

but it's nothing we haven't come across before, really.

All those extra hands

and the boys' own experience helped keep the budget down to 18,000.

Whilst this is over their original budget of 12 to £15,000,

that was predicted before they knew about the extensive work

they would have to undertake.

For me, doing all this for £18,000 is a minor miracle.

We have had people knocking on the door, four or five people

putting stuff through the letter box wanting to rent the house.

If we can't sell it, basically,

so that we can do the next project, that's what it's for,

if not, we'll rent it and go from there and see what we can do.

Andy and Lee had a time scale of 10 to 16 weeks, but due to work

commitments taking them away, it has taken closer to nine months.

With a total spend of around £90,000, they will be keen to hear

what two local estate agents made of this property.

They have renovated it to a good standard.

Nice fitted kitchen, nice bathroom and, yes,

they've got a nice finish to it.

I think the changes here are spectacular.

They've done all the right things

and the things I'd always advise people to do.

If this property came onto the rental market,

there would be a lot of interest for it.

And I would say that we could very easily achieve £650

per calendar month.

I think if this house was let now, the rent would be about £625

per calendar month.

That would be an annual rental yield of just over 8.5%.

But what about the resale value?

I think this property, placed onto the open market, should be

marketed for about £130,000.

To sell this property now, I think

it's value is in the range of 140 to £145,000.

The standard is pretty good,

so hopefully obviously we will have an offer, there or thereabouts.

Yes, I think it's a good price.

Happy.

That top estimate would mean a profit of a whopping £55,000.

So, whether they decide to rent or sell,

the boys' first development project has been a very big success.

We've gone in it together, we've jumped in with both feet,

and we've come out at the end of the day with a nice property

that we've refurbished. So, yes, it's been quite good.

We'll have plenty more stories from the auction rooms for you

-next time.

-Yes, so make sure you join us then to hear the highs

and the lows of buying homes under the hammer.

-See

-you then. Goodbye.