Episode 21 Homes Under the Hammer

Welcome to the show.

With the property market in a state of flux,

everybody has to make their own decisions.

You have to do your research and trust your own instincts.

Yes, and you need to find out what's going on.

One way you can do that is by going down to your local property auction.

Well, there are literally thousands of properties coming up

for auction every month, up and down the country.

So why not pop along and see what's up for sale?

Here are the three properties we've got for you on today's show.

In the London area of Chelsea, every square metre is precious,

and I mean really precious.

Crazy.

Whereas in Dover, do I have to spell out the problems with this property?

D-O-G, dog hairs everywhere.

And in Sandbach, Cheshire,

the issues with this two-bed mid terrace house

can be easily seen.

Told ya.

All of 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.

If you're all done...

Today, I'm in London, SW10.

One of the most expensive parts of the capital,

but it doesn't get that reputation for nothing.

It's really popular with both pop stars and the rich and famous alike.

A smattering of restaurants, trendy bars, a famous football club.

Property prices here aren't cheap but oh, what a place to live.

MUSIC: "Chelsea Dagger" by The Fratellis

Yes, this is Chelsea, home of the famous King's Road

and a vast array of shops and restaurants.

I've walked just a few minutes from Chelsea's Fulham Road

to a very desirable spot,

made up of family homes and those attractive mansion blocks.

And it's a flat in one of these buildings that I'm here to see.

And you'll never guess who once lived along this street...

Kylie Minogue.

Well, the property I'm here to see,

I don't think it's quite ready for a pop princess yet.

Lower ground floor flat, had a guide price of £375,000.

Let's take a look.

MUSIC: "Spinning Around" by Kylie Minogue

# I'm spinning around, move out of my way... #

A dizzying price for a one-bedroom flat?

Well, this isn't just London,

it's one of the most expensive parts of it.

This rather wholesome block was built in 1902

but it's in pretty good shape and with a 999-year lease,

this is what's known as a virtual freehold.

So all good.

And then...

Hmm, this entrance is a bit of a let down.

For a flat guided at £375,000, it's a bit of a trek

and there might be some security issues to consider.

On the other hand, your own front door is always a bonus.

So, what do you get for what is not an inconsiderable amount of money?

Not much, actually.

Still, what I see, I do like.

It looks like it hasn't been played around with or modified much

over the years so there are some original features to discover.

I like the floorboards, they'd be lovely stripped back.

Skirting boards, they're nice, too.

So that is your living area, that's a good-sized space.

It all starts to go a bit wrong when you start to head this way

cos that's your living area, this is your sort of sleeping

and, you know, facilities, if you like.

One bedroom, it's not a bad size.

Head this way, though, that's the kitchen,

needs some nice units in it, at least there's a window.

Look at this, disastrous.

And the bizarre thing is, there is nothing in that cupboard,

so that's clearly got to go.

That would certainly open this bit up

because this is your route to the bathroom.

Sumptuous, gorgeous, fantastic, marble...

No.

Still, what do you expect for a third of a million quid?

MUSIC: "Money On My Mind" by Sam Smith

# I don't have money on my mind, money on my mind... #

Actually, it's even more than a third of a million.

It's dark, it's dated, it's decidedly damp.

It gets cramped as you go further back.

Nope, this is just not working for me

or, I suspect, for anyone seeking a Chelsea pad.

This needs to be high spec, hi tech and the cost of that,

well, that's going to be high, too.

You really do have to slip into a very different developer mindset

when you take on a project like this in an area like this

and the way you think compared to other parts of the country

basically has to go out the window so it's absolutely vital that

you make the most of what you've got here.

One thing you might want to consider is to create a second bedroom.

Is that possible given what we've got? Well, maybe.

Maybe there's some taking out of walls you could do,

you could think laterally about where you put the kitchen.

Is it worth doing?

The only way to find that out is to talk to a local estate agent.

Yes, you do need to do your homework on the likely costs

and profits of creating a second bedroom

and get an architect's advice on what's possible with the layout.

I know it's difficult to imagine how you could get two bedrooms

on this footprint, but it could mean some big numbers.

Sometimes it's really hard to get your head around the prices of

property in certain parts of London, such as where this flat is situated,

especially if you live in other parts of the country

outside the capital.

Because the numbers are just...out there!

I mean, really, this flat as it stands, guide price £375,000...

It's 53 square metres.

So, let's draw a square metre.

There you go. That's a square metre, roughly.

That there is worth at the moment...

7,000 quid.

How bout that? That's bonkers, you might think...

However, done up,

this place is worth a cool...

million pounds.

You did hear me right, which makes that bit of floor worth...

19,000 quid.

Step very gingerly.

MUSIC: "Bonkers" by Dizzee Rascal

Crazy.

# Bonkers... #

So, is that £375,000 guide price a bargain?

Possibly, but you will need to spend money renovating it to the

highest possible standards. Does a local estate agent agree?

The quality of the properties that it would compete with,

should it come back to the market, is exceptionally high.

You would need to put in a very high specification bathroom,

very high specification kitchen,

also try to return some of the period features if possible.

But should this stay as a one-bedroom flat

or should it be two?

If I wanted to get the maximum rental yield for the property,

I would put in another bedroom.

If I was looking to maximise the capital value,

I would retain the layout as is, as there will be more demand

at a higher price for a property with larger rooms and a separate kitchen.

So are we talking a cool million here on resale as I suspected?

Once renovated, this property, I imagine,

would sell for upwards of £1 million.

Yes. A million or possibly even more.

Even for London, we're talking big numbers here.

So what about rental values?

Once this property is renovated,

it could rent for between £3,250 and £3,500 per month.

Well, they say that sometimes you've got to bet big to win big

and that's certainly the case with this flat.

Not a lot of room for a lot of money

but around here, get it right

and it could earn someone a whole pile of cash.

Let's find out who should be so lucky, lucky, lucky

when it went under the hammer.

Lot 74, I'll start at 400,000 on this.

400, 405?

Wow, the auctioneer starts at £25,000 over the guide price.

So let's rejoin the bidding when it reached £564,000.

564, 565?

Coming in, 565, 566?

567?

568?

569?

570?

571, he's back in.

He knows it. 572?

573?

574?

575?

576?

576, 577?

578? 578, 579?

580?

580 at the back?

581? 581 in the front.

582, 583?

584?

585?

586?

587?

586,000, first time.

Second time.

Third and last time, have you all done?

586,000, sold. Well done.

A handshake between business partners Ian and Alex

on that final bid of £586,000.

That's a rather gobsmacking £211,000 over the guide price

for a one-bedroom flat.

Alex, who works in IT, met us back at the property

to tell us why he bid big.

-Alex, great to meet you.

-Great to meet you.

-Congratulations.

-Thank you.

So, wow. Lot of money.

Yes. Just a tad, yes.

570,000 was my ceiling.

Oh, right. OK.

But you still happy to get it?

Yes, I'm really happy with this.

You know, sometimes you get a good feeling about a project

and for me, I've got a good feeling about this project.

I really like the shape of the flat, I love the location.

The building has been really, really well maintained as well,

it's just gone through quite an extensive refurbishment programme.

-So it ticks a lot of boxes for me.

-Why have you bought it?

Is it for you or to rent out or what?

My intention is for me to redevelop this,

convert it into a two-bedroomed space,

I can kind of squeeze that out of the floor space that we have

and to move into it and enjoy the fruits of my labour.

Oh, great.

Alex may have gone past his ceiling bid by £16,000

but that's not even a square metre of this flat.

How is he going to reconfigure it?

At the moment, there is

quite a long corridor down the rear of the rear half of the flat

and I think that's a bit of wasted space.

So we are just going to adjust some of the interior corridor wall

and the corners of the floor space which currently is hallway

will be turned into bathrooms.

And just eat away into some of the space we've got

in the current bedroom to give some of that into the living area

and then use the current kitchen and bathroom to convert

that into a big sort of master bedroom at the back of the property.

And where will the kitchen be?

The kitchen will be integrated into the living area as you come in

so the current square room will become more of an L-shaped room.

So in fact, that corner there, some of that will be given into the

kitchen space to create the typical kind of open-plan living area.

Not only does Alex plan to make this a two-bedroom flat,

he wants to squeeze in two bathrooms as well.

Good luck with that one(!)

He has a £60,000 budget and a ten-week timescale

and he plans to give it that high spec feel.

So his university studies in Landscape, Architecture

and Design will be handy.

What does he hope the flat could be worth once it's done?

I think a conservative estimate could be £700,000 plus,

to 750,000.

Well, the agent was quoting numbers a lot higher than that,

-just so you know.

-OK, that's good news.

Well, congratulations. Good luck, we will follow this with much interest.

-Thank you.

-Nice to meet you.

-Cheers.

So Alex's paying way over the guide price for this little Chelsea flat.

However, I think he's got some great ideas for it

and a realistic budget and I think he might be being a little bit

conservative about what he might make out of it.

You can find out and re-enter the slightly surreal world

of London property prices later in the show.

MUSIC: "River, Sea, Ocean" by Badly Drawn Boy

Well, leaving those eye-watering London prices behind,

I'm off to dip my toe in a more sedate, calmer part of the country.

# Quality sea, makes it to the ocean

Dover, in Kent, is often seen as the gateway

to mainland Europe and beyond.

# Far away, far away... #

But the town itself isn't without its own attractions.

There's the famous white cliffs, of course,

and the castle which presides over the town.

Look at that fantastic view and that is Dover Castle,

scene of many turbulent times throughout the centuries.

Well, these days of course, it's the cry of seagulls

rather than battle cries that ring out around the town.

But competition is still fierce

when it comes to finding affordable accommodation.

Just a ten minute walk from the high street

and only seven minutes' walk from the train station

is the property I'm here to see.

Now, it was on at the auction for a guide price of £80,000 to £84,000

and it's this three-storey mid terrace property.

I'm going to go inside and have a look.

Now, these little cottages were built around 100 years ago

for the dock workers in Dover.

They're solid, they're well-built, a great little investment here.

Although, I'm not sure this partition has always been there.

In fact, it really narrows the little lounge here.

I'd probably get rid of this and open the space up.

It's got a nice fireplace which could be a feature

and what I love are these wide, chunky floorboards

and they run right the way through the whole property.

Now the floor space down here is not ideal because

there's the bathroom and it's huge,

I mean, it's far too big for a bathroom.

It's a real waste of space.

In fact, I think in a former life, that may have been the kitchen.

Not only is it too big as a bathroom...

it's avocado!

Well, bits of it are. A two-tone suite?

Unusual, to say the least.

Anyway, onwards and upwards.

So, let's have a look around upstairs.

No bathroom, as I suspected.

Good-sized room there, second bedroom through here.

I think the previous owner might have had quite a lot of animals

because D-O-G,

dog hairs everywhere!

So, this carpet needs to be scooped up and thrown in the skip.

But it has the bones of a good room, lovely window there, could be

replaced with a double-glazed unit, but that is a great view over Dover.

MUSIC: "Point Of View" by DB Boulevard

# I see birds and trees

# All the flowers of the world

# So beautiful

# Won't you come with me?... #

Oh, it's a great view looking out,

but perhaps not so great looking in.

The two bedrooms are OK

but obviously need to be completely refurbished

and stripped of all traces of dog!

Where's the kitchen, I hear you ask?

Well, that's on the lower ground floor,

along with another reception room.

The kitchen is a good size and it leads out to the garden

where, once again, the views aren't half bad.

But I'm beginning to wonder

whether I'm looking at this house in the right way.

# Can't you see

# Life's easy

# If you consider things

# From another point of view?... #

Well, there's a lot of house here over these three storeys

and it wouldn't take too much effort to turn this

back into a lovely family home.

But if you're looking to make the maximum return on your investment,

well, this is where it gets interesting.

Because this property comes with full planning permission from

Dover District Council to convert this whole place into two flats.

Now, that is a bonus.

And the two flats that have been approved are for a two-bedroom flat

on the upper two floors and a one-bedroom self-contained

or studio flat on the ground floor.

With a separate entrance already in place,

you can see that this conversion wouldn't be that tricky.

But are two flats instead of a good-sized family home

really what the local market needs?

What does an estate agent think?

If you're looking to the future for this property,

it depends what you're going to do with it,

either reselling it or letting it.

If you're letting it,

you'll get a better income from the two apartments.

If you're going to resell it,

-there's probably a broader market for it as a house.

-Interesting.

I guess ultimately it comes down to the numbers on a property

that was guided at £80,000 to £84,000.

This house, when renovated,

will achieve something in the region of £100,000, maybe £105,000.

If this were converted into two flats,

the values of the two apartments are likely to be £40,000 to £45,000

for a one-bedroom and £50,000 to £60,000 for a two-bedroom flat.

So resale with build cost may not necessarily favour

converting to flats.

Rental returns, though, might.

The value of this if it were let as a two-bedroom house

would be £500 per calendar month.

I think the one-bedroom flat on the lower ground floor would

achieve £400 per calendar month

and the upper floor two-bedroom flat would be

£450 to £500 per calendar month.

Yup, that means you could almost double your monthly rental income

with two flats here, so there's a lot to consider.

So a sizable three-storey house with that very attractive option

of turning it into two well thought-out flats...

On the one hand, it could be a lovely family home,

but on the other, the potential for maximum return on your investment.

Let's find out who fancied it and what they decided to do

when it went under the hammer.

Over the page, then, to the last two lots of the day.

Lot 82 is a house for improvement

with approval for a pair of flats for conversion.

Where do you want to start me, then? 70,000 to get me on my way.

At 70,000, it would be a steal.

70,000 I'm in. At 70,000.

And 72 now...

72, I've got. And 74, 76?

76, and 78? 78, and 80?

79.

80, if you like...

You heard him say it.

And 81? 81, 82?

83? 84. 84, 85?

86?

87? 87,000?

At 86, then, the first time at 86,000, sitting in front of me.

86,000 for the second.

86,000 third and final time.

If you're sure you're all done, it's going to be sold...

-GAVEL SLAMS

-Well done, at 86,000.

And so, for £86,000,

the successful bidder for the three-storey Dover house is Debbie.

Now, Debbie is a familiar face on the show, having already bought

and renovated several properties in the Kent region.

-Debbie, how are you?

-I'm great, thanks. You OK?

-Well, I'm great.

I'm just quite excited that, you know,

you've got a lot of house here for what you paid at auction.

Yes, I know. We were really pleased with it.

The three-storey building and it's quite a solid building,

not in a total state of disrepair,

for 86,000, so yeah, it was a good price.

So, describe and tell me what it is you do,

because you've not bought this for yourself, you're an investor.

That's right.

I actually run an auction buying service for clients

that are mainly abroad, in Singapore and Hong Kong,

who would like to invest in property and they'd like to refurbish

properties and build, but don't have the time to do it themselves.

So that's where I come in.

I do all the research on the auction plots,

find out which ones are likely to give us

the highest return, basically, and then I bid for them

and get the projects done on behalf of the investors.

So what was it about this house in particular that you thought

was worthwhile to bid on?

This one's got planning permission for conversion to two flats which,

you know, makes it much more attractive.

So many developers that I meet go,

"Yeah, yeah, got the plans, rubbish, don't want to use those.

"We're going to change it, we're going to put an extra room in here,

"build an extension out there..."

So, you know, are you happy with those plans?

Well, funny you should say that.

We are half thinking of doing a small extension from the outside store,

across the other wall there,

which would give us a much bigger kitchen,

so we could then push the units back to that wall and this would

become a lounge and kitchen in one,

with the bathroom off behind us.

-So in terms of space, it really would work.

-Yeah.

But it's the planning and it's the timing and it's all of that

that's going to not allow you to crack on with this project.

Well, that's what we've got to add into the equation.

MUSIC: "Living By Numbers" by New Musik

# Living by numbers

# Living by numbers now... #

So, Debbie has a few issues to weigh up but the key for her,

really, is the maths and getting the maximum return for her investors.

OK, so let's talk about what you are actually going to be doing

in terms of work to this property.

I mean, as it is a conversion, obviously most things that you

see are going to be ripped out.

So it'll go back to a shell,

although the windows at the front will stay and the door at the front.

All new windows at the back and all new kitchen units.

We'll be taking the stairs out that are just behind us as well.

So taking the stairs out

because obviously there's no need for them because you're going

-to use this ground floor entrance as the entrance.

-That's right, yeah.

Well, Debbie certainly seems to be on top of the layout changes,

but she still has to check out whether the damp in the front room

needs remedial work and that's why she's commissioned a damp report.

She's pretty confident she won't need to put a whole tanking

or waterproof system in, but if that was needed,

that wouldn't be good for the numbers or the timescale.

So come on, Debora, how long is it going to take to get

the project up and running and complete?

-I think it'll be finished within three to four months.

-Really.

Yeah, if we don't go for planning, then we can get...

The builders are ready to get going as soon as we've got the damp report

back and we know what we've got to do there,

-they'll get in here and get this one done.

-What's the budget?

We've got 45,000 for this one.

Well, Debora, it's going to be really exciting to see how

-this one turns out.

-Yes.

And are you going to do the extension, yes or no?

-Well, we'll soon...

-We'll see when we come back?

-Yes.

-Good luck.

-Thank you.

-Thank you.

Well, there's someone who really knows what she's doing.

She's done her homework and she's totted up the figures.

But Debbie still has to receive that damp report and she still has

to work out whether she's going for an extension out here or not.

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

Coming up, in Sandbach, Cheshire, I look for a simple solution.

Properties aren't all that complicated.

There's usually some fairly basic reason

why that kind of stuff is happening.

Back in Dover, it seems Debbie's definitely got the development bug.

Well, I bought two more at the beginning of this week.

I'm a glutton for punishment.

But first, we're back in SW10

and the hot property London market that is Chelsea.

And it was here that we saw a handsome mansion block

that contained a less than handsome one-bedroomed flat.

It was bought by Alex for £586,000,

£211,000 over the guide price.

-A lot of money.

-Yes.

Just a tad, yes.

-But you're still happy to get it?

-Yes, I'm really happy with this.

You know, sometimes you get a good feeling about a project.

I really like the shape of the flat, I love the location

so it ticks a lot of boxes for me.

Well, I agree the location is a tick as far as box-ticking goes,

but for the rest, well, it was rather boxy.

But Alex didn't seem in the least discouraged.

My intention is for me to redevelop this,

convert it into a two-bedroom space cos I think

I can kind of squeeze that out of the floor space that we have

and to move into it and enjoy the fruits of my labour.

Oh, great.

With a budget of £60,000,

Alex was aiming to create his Chelsea pad in eight to ten weeks.

It was five months later when we returned.

MUSIC: "Imagination" by Belouis Some

# Imagination could make a man out of you... #

Wow, look at that.

# Imagination could make me love you, too

# Imagination is all I want from you... #

This basement flat is now every inch

the high-end Chelsea pad it needed to be.

And every inch of the place has been put to work.

Where the corridor used to be is a high spec kitchen.

The bedroom, which was dark and dingy, is now bright and welcoming.

And it's no longer a one-bedroom flat.

Alex has managed to use that awkward corridor space to create

a second bedroom and a shower room.

However, hang on. What happened to his plans for an en-suite?

In the initial plans for this flat,

I wanted to squeeze in two bedrooms and a bathroom and an en-suite.

Looking at the place closely and the size

and talking with some local agents, I was advised against that

so I stuck with a two-bedroom layout with just one bathroom, which

allowed a bit more space to be carved up and given to the living space.

I think it was a wise decision.

And Alex considered all his options

when it came to using the space wisely.

One of the things I decided to try was underfloor heating.

I wanted to make use of floor space as much as possible

and do away with fixtures and fittings

so that's something that's worked out quite well.

And one of the things that I was quite happy with is

the use of the original hallway, widening that out a bit

and turning that into a really functional kitchen.

I wanted to make sure that it was bright and usable.

Well, I think that objective has been achieved.

The kitchen has the high spec detail it needed.

And that attention to detail, like the lighting

and the new sash windows, all give the flat an expensive feel.

Does this mean that his £60,000 budget is a distant memory?

We ended up spending £55,600.

I am impressed that he managed to achieve this finish for that budget.

So far, he's spent just under £642,000

creating this two-bedroom flat.

Will two agents think he's done enough to make

a splash on the demanding Chelsea property market?

Wow.

When I saw this property the first time around,

it had so much potential

but now it's actually been realised.

The property itself, the change of the layout,

the attention to detail, it's absolutely stunning.

The first impressions are extremely good,

it's really got the wow factor.

There's little touches like the light in the bathroom,

very good cupboard space which often is missing, unfortunately...

So, it looks like it has absolutely everything.

My particular favourite is the kitchen area and in particular,

the granite worktop.

I love the way that you get the light sparkling throughout the stone.

Also, just the attention to detail,

the plants just work really well, and the whole area is just beautiful.

Sounds like a thumbs up to me.

So will the agents' enthusiasm for this property

be reflected in the retail figures?

For rental, I think this property could achieve between

£2,850 to £3,000 per calendar month.

I would expect a rental price of £3,000 to £3,600 per calendar month.

That would mean a yield of between 6% and 7%.

As Alex is intending to live in the flat, he will, I'm sure,

be more interested in the resale figures.

We would expect a sale price of £925,000.

For sale, I would value this property around the £1 million mark.

That means a potential pre-tax profit

of a whopping £283,000 to £358,000.

I think the £1 million mark is very generous.

I personally think it's more in the mid-900,000.

With rewards of that size on offer, does Alex have any advice

for potential buyers at property auctions?

The key thing is, I suppose, to

understand the area or the market that you're buying the property for.

The tricky thing with auctions is you always come away thinking

you've paid the highest price in the room, which you have,

so you don't really feel like you've got a bargain, as such.

But in hindsight, in this particular scenario,

I'm quite pleased with having secured this property.

Now, we leave behind cool, urban pads and the buzz of the city

and visit a slightly more tranquil setting.

I'm in the handsome and upmarket

market town of Sandbach, in south east Cheshire.

A lovely spot, what's known as a dormitory town.

Basically, people sleep here and then get easy access

to the motorway network to places like Manchester,

Stoke-on-Trent and Crewe.

You know what? It is lovely.

As well as the Elizabethan market,

the town square also boasts two Anglo-Saxon crosses

dating from the 9th century,

depicting dragons, amongst other things.

Fascinating.

So what property delights bring me here today?

Well, on this road, not too far from the town centre,

is this two-bedroomed mid terrace

at a guide price of £65,000.

Looks a little bit grubby on the outside but you know what they say?

Sometimes it's really good to go from the worst house

on a good street.

And as streets go, it's a busy one.

It's a main route to the town centre.

That's not going to be for everyone.

So, so far, the outside doesn't exactly excite me.

Here's hoping the inside is a bit better.

So, what've we got? Oh, hmm.

Kind of a tiled floor, not the most welcoming and warming

and it does bring up to question all sorts of damp issues

which you'd want to check out.

Big bay window which is nice, although it is looking out

onto the road so double glazing definitely necessary.

But look at the angle over there. That wall is sort of...huh.

Hmm, it's going to make fitting furniture kind of fun(!)

But that's the good bit, actually,

cos come towards the rear of the property here and a tiny kitchen,

again with that angled wall, an under-stairs cupboard

and then stairs up to the bedrooms.

I can't quite put my finger on what this room would be.

What it is at the moment is access to the rear.

Laid mostly to...well, concrete, at the moment.

The always comedic outside toilet,

very useful if you're doing some gardening or here's an idea,

what do we think about extending that

building across the width of the house here to create much

needed space in that kitchen area, or this area?

Single story extension,

you could do it within permitted development rules.

You'd have to check, you have got a few issues here because there's

obviously some drainage, sewerage or whatever, flowing across here.

So you'd have to factor that into your plans.

But other than that, I think it would be a way

of sorting out what is actually a bit of a iffy downstairs.

Let's hope the upstairs is a bit better.

There's a lot of concrete here,

on the ground and the boundary walls, too.

I really do want to take a jackhammer to it.

MUSIC: "Break Up The Concrete" by Pretenders

# Break up the concrete, break up the concrete... #

It's not pretty and neither is the paintwork.

And then, weirdly,

there is no boundary between the next door house.

It's all a bit of a mess, really.

I'm hoping that outdoor loo isn't the only toilet in the house,

although the way things are shaping up, I wouldn't be surprised.

This house needs a lot of attention,

not least because of the signs of damp.

Useful to have that window there,

throws lots of light onto the stairs which is good

and I like the floorboards, they'd be nice stripped back.

Although, whenever you strip back floorboards on an upstairs floor,

you've got to consider the people downstairs cos

lots of clumping around isn't good.

But this is looking positive.

You've got the bathroom and loo here, so thankfully it's not

just the only that's outside that you have to cope with.

Looks to be in OK condition,

but it's in the right place, which is good.

Nice sized front bedroom, smaller bedroom towards the back

but compared to the downstairs, the upstairs is actually...

..a delight.

Upstairs is a delight, downstairs...a nightmare.

But at least I'm beginning to see some potential.

At least there's a bathroom.

Not my choice of colour, but it's a fair size.

But on the downside, there are definitely more signs of damp.

Well, here in the main bedroom, more of those crazy angles but I'm more

concerned about some serious...

signs of damp on this front wall here.

Now, properties aren't that complicated.

There's usually some fairly basic reason

why that kind of stuff is happening.

It must either be something to do with the roof

or penetrating damp coming through the wall.

Let's explore.

Thought so. Look at that.

At the end of the guttering there, you can see there's supposed

to be a pipe that links the gutter to the downspout.

It's missing, which means that the water will basically just pour onto

this wall here and after a period of time, it'll just penetrate through.

There you go, open and shut case.

Told ya.

Unfortunately, this property has been lying empty for some years

so no-one's been able to deal with the general maintenance.

This is the sort of thing that costs hardly anything to keep

maintained but if ignored, can lead to expensive repairs.

What does a local estate agent think of this house

that was guided at £65,000?

The layout is interesting. It needs quite a lot of work doing to it.

The property needs a general update, typically new kitchen,

new bathroom and general decoration throughout.

You know, it's certainly a challenging project,

but the end result could be a very nice house.

After the problems have been fixed and the house has been

refurbished, how much does the agent think it could be valued at?

When the property is completed, the value

would be £115,000 to £120,000.

And the rental income it could produce?

I feel the rental value will be £525 per calendar month.

Well, there's a few issues,

but I think this place definitely has that all important potential.

And for £65,000 guide price, yeah.

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

96, good location, Sandbach, South Cheshire.

What shall we say for this one?

What's this, 40,000 to start me here?

38, then, can we get it going...

38 bid, thank you. At £38,000, 38,000.

40, thank you. At 40,000.

42? 42, 44, 46...

Keen interest on the auction day and we rejoin the bidding at 69,000.

New bidder, far left. 69,000.

70, 71.

72. 73.

74.

75. Nope?

At 75,000 then, far left at £75,000.

76 anywhere else?

76, back in. 77?

78 on the back row? 78.

79. 80?

79 then, far left corner at £79,000.

80 anywhere else? He's back in, 80.

81.

Sure? 81, once. 81, twice.

Third and last time, far corner, 81,000...

Sold to you, sir. Well done.

Buying the house for 81,000 was Lee and his mother, Helen,

who's just hidden from view.

Lee lives locally and runs a construction and landscaping company

specialising in patios and driveways

and he dabbles in property developing.

I met him back at the house to find out more.

-Lee, great to meet you.

-Yeah.

-Congratulations.

-Thank you.

Tell me why you wanted to buy this place.

Well, me mum came with me to the auction

-and she'd actually found the property.

-Right.

Sometimes we work together on small projects.

She came to me and actually said,

"I've found a property I'm interested in.

"Do you want to come and have a look at it?"

-So it was a collaboration between you and your mum?

-Yeah.

Lee's mum, Helen, will provide the capital.

Lee will carry out the work and they'll split any profits 50/50.

What was it that you both liked about the place?

We liked the position of it because we know the area,

we're just up the road.

It hadn't been lived in for seven years, which is

always what I like because you get them for a better price.

And obviously, with being a builder, there's more profit in it,

hopefully, at the end of the day.

What do you think the challenges here are then?

Well, basically we've just got to start from scratch.

Just go through it and start by taking the plaster off the walls,

downstairs putting a new damp proof course in, rewiring,

re-plumbing, all new floorings and double glazing.

We're going to transfer the kitchen into this room where we're stood

because the kitchen is too small and at a funny angle in that room...

and perhaps change that either into a dining room

or a snug or something like that.

Perhaps put a small porch or something linking it

to the outside toilet to make a downstairs toilet which is usable.

So talk me through your numbers then.

How much are you going to spend?

-We've estimated to spend sort of about £20,000 on it.

-OK.

So we're hoping to get it all complete for £100,000

and I'll make an allowance of my time in that

and obviously I've got employees which I've got to pay out of that.

Right.

So there'll be a team of people working on it

and then any profits at the end, we'll split between us.

No doubt Lee's landscaping experience will come in handy

and he'll carry out the jobs with his usual team of workers.

What is the time scale for getting it sorted, then?

Well, normally I always have a quiet spell in January

when I look for a project to do, you know,

and I'm going to come here and convert this, should take about

six weeks from start to finish, if I'm on it fulltime.

And you're talking about not starting it till January?

-That's right, it'll be just sat here.

-Really?

Won't be starting it till winter now.

-Right, well, listen, congratulations.

-Thank you.

Good luck with it and we look forward to seeing how you get on.

OK, thank you.

Well, Lee certainly seems to have the right idea when it comes

to sorting this place out, but I've just got a couple of niggles.

One is the finances, not a lot of money in it,

especially when you factor in him paying himself.

And then that timescale, not starting it for, what,

five, six months?

As we say in property, time is money and that is a long time.

Will he really leave it? You'll find out later in the show.

Well, time and tide wait for no man. The months have passed.

Have those properties been the subject of a DIY extravaganza

or a professional job?

Have they remained exactly the same?

The moment of truth... Let's find out.

It was in the Kent costal town of Dover where we first saw

a two-bedroom mid terrace house spread over three floors.

It was tired and dated and needed a complete overhaul.

There appeared to be nothing particularly special

about the property but...

Well, this is where it gets interesting.

Because this property comes with full planning permission from

Dover District Council to convert this whole place into two flats.

Ah, so suddenly my developer's eyes lit up.

Not only could you get a two-for-one offer here,

but the all-important planning permission was in place.

A deal like this was too good to turn down for experienced

property developer Debbie, who buys and renovates

properties on behalf of clients she has both here in the UK and abroad.

Now, so many developers that I meet go,

"Yeah, yeah, got the plans, rubbish, don't want use those.

"We're going to change it, we're going to put an extra room in here,

"build an extension out there..."

So you know, are you happy with those plans?

Well, funny you should say that.

We are half-thinking of doing a small extension from the outside store

across to the other wall there which would give us a much bigger kitchen.

So in terms of space, it really would work.

But it's the planning and it's the timing and it's all of that

that's going to not allow you to crack on with this project.

Well, that's what we've got to add in to the equation.

So Debbie was going to need to work the numbers on a property

that her client had bought for 86,000

and had given her a 45,000 grand budget for the conversion work.

And now, five months later,

we're back to see the sum of all Debbie's endeavours.

Looks promising, but is it one house...

or two flats?

We've divided the property into two flats so we've taken the lower

set of stairs out and that is now a self-contained one-bedroom flat.

Just by losing the stairs

and using some of the good-sized kitchen space,

Debbie has managed to incorporate a rather sleek

and contemporary shower room.

While the kitchen has certainly gone up a notch or two.

And the lounge-cum-bedroom is now a whole lot better without the,

um, holes in the walls.

And this property is now a two-bedroom maisonette,

so we've put the kitchen where the bathroom was.

Hooray.

Now that is such a better use of the over-large bathroom space.

It shows how big it was.

Not only does it have a reasonably-sized kitchen in it now,

but with one of the stairwells removed,

there's still room for the bathroom in the corner.

The lounge is now right where it would have been initially,

and the bedrooms are pretty much the same, as well.

And with the downstairs stairwell gone,

that lounge is much more of a room than a corridor.

The two bedrooms make this a good-sized home.

But what happened to the plan to make the downstairs flat bigger?

Initially, it was so tempting to put another room on the ground floor

but after it was purchased, it's money that's just sitting there,

really, and so we needed to get on and get the job done.

Even if it hasn't got a bigger kitchen,

the ground floor flat does have the added bonus of a great garden

with a patio area, which is almost like an extra room.

Both flats have parking spaces at the rear but even without

an extension, it was a lot of work to convert the house into two flats.

So how involved was Debbie in the process?

The work has all been done by a guy called Ben,

who's a local guy to me where I live

and he took on board pretty much the

project management side of this as well,

and my role was really quite restricted in this case.

With several other projects on the go,

Debbie was reliant on builder Ben to come up with the goods

and he certainly seems to have come up trumps here.

So how was it, managing such a comprehensive conversion for Debbie?

It's been absolutely great, really.

Yeah, enjoyed working for her, she's given me quite a free rein, really.

And that free rein included choosing a lot of the colours...

in particular, the striking red of the shower room

in the downstairs flat.

So come on, Ben, how did that come about?

It really came from looking for the floor.

I was looking at some lino and saw this lovely, you know,

lipstick red one and it gave us the idea for the contemporary style

so I think the chrome, the red and the white go quite well together.

So, with Ben adding the splash of colour,

it was down to Debbie to splash the cash on her investors' behalf.

So how much has she spent?

45,000, pretty much on the dot.

And that £45,000 spend on top of the £86,000 purchase price,

takes the investors' total cost to £131,000 without taxes and fees.

So does it all add up to a good deal?

What do two local estate agents think?

This property has been converted really well.

It's now into two very neat self-contained apartments.

Very stylish, very, very nicely done.

Quite funky in places, which I like, particularly in the bathroom

and the kitchen's splashbacks are quite nice colours.

With the rental market in Dover being very buoyant, Debbie's

investors have decided to hang onto the flats and rent them out.

But how much capital growth could

they see on their 131,000 investment?

The resale values of the apartments

now are £45,000 to £50,000 for the studio flat

and £70,000 to £75,000 for the two-bedroom flat upstairs.

The lower ground floor would retail at approximately £50,000 to £55,000.

The upper flat would retail at £65,000 to £70,000.

So with the current value of the two flats combined

being between £110,000 and £130,000,

there really isn't any money to be made on the resale market.

So rental figures are key to making sure this works

as an investment vehicle.

Rental values here now are £400 per calendar month

for the studio apartment

and £600 per calendar month for the two-bedroom apartment.

The lower ground floor flat would rent at £450 per calendar month

whilst the upper flat would rent at £550 per calendar month.

We were thinking £350 to £400 for the one-bed

and sort of £450 to £550 for this one, so that's not far off.

A total rental income of £1,000 per calendar month from both flats

would generate a yield of just above 9%. Now that's not a bad return.

So are there more properties in the pipeline for Debbie?

Well, I bought two more at the beginning of this week.

I'm a glutton for punishment.

So no, I just move on to the next and just keep going, really.

Yeah, I've got ten projects on the go at the moment,

being developed into about 25 flats altogether in different

areas of Kent and South East London.

So, yeah, I'm busy.

And someone else who was busy was builder and landscaper Lee,

who had bought, in the summer of 2012, a two-bed mid terrace property

in Sandbach, Cheshire, for £81,000 as a joint project with his mum.

MUSIC: "I Will Wait" by Mumford & Sons

Having lain empty for over seven years,

this property was now desperately in need of attention.

But it seemed it would have to wait even longer.

# And I will wait, I will wait for you

# And I will wait... #

What is the timescale for getting it sorted, then?

Well, normally I always have a quiet spell in January

when I look for a project to do.

And you're talking about not starting it till January?

-That's right, yeah, it'll be just sat here.

-Really?

-Won't be starting it till winter now.

-Right.

So, a little patience was called for before Lee would start work.

MUSIC: "Patience" by Take That

# Just have a little patience... #

And with a budget of £22,000 to £23,000,

he had a comprehensive refurbishment planned.

# I really want to start over again... #

And now, ten months on, with the winter behind us,

we return with Lee to see if it's been worth the wait.

Certainly, the outside looks fresher and more vibrant

and its general curb appeal has gone up a notch or two.

And inside?

Wow, that's not bad, either.

It's been replastered, rewired,

damp-proofed, re-plumbed...

The lot.

And that sorry looking kitchen?

Well, it's not so sorry now.

I had planned to move the kitchen into the other room but after

a good design, I found that there's actually plenty of room in here.

I've incorporated granite-style worktops

and a new designer white sink.

Lee's right, this space is actually more than adequate.

And anyway, it would have been a shame to have lost

the space in the back reception room.

But how's upstairs looking?

Crisp, clean, bright and modern.

Remember that garden that was more concrete than grass?

Well, there's no sign of a lawn but it does look a million times better.

So it really does seem like it was worth the wait.

# And have a little patience... #

Having my own landscaping company has enabled me

to transform the back of the house.

I installed a new raised bed at the back with new plants in,

new fencing and a beautiful new Indian-style patio.

I've repainted all the back of the house, new rainwater goods.

But the biggest transformation for me is the outside toilet.

I've blocked up the original entrance and then re-rendered it.

And that previously outside toilet has now been incorporated

into the house to create a downstairs cloak room.

But is this all Lee's handiwork?

I've done about 80% myself.

I brought in trades for the electrics and the plastering.

So Lee's been busy.

But this was a joint project between him and his mum.

So is she happy with the outcome?

My mum's very pleased with the property and how it's turned out.

She's actually done the decoration on the property herself

and added a few little finishing touches.

And hopefully we'll get a good market price and split the profit.

Ah, a profit. But will there be any?

That all depends on how much they spent here.

We've reckoned it up

and I think we've spent about 21,000 on renovating it.

Well, a £21,500 spend on top of a £81,000 purchase price

takes their total cost to £102,500.

So has it been time and money well spent?

What did two local estate agents think?

Having seen it before, I think it's a fantastic job.

They've done it to a really high specification

and I'm impressed with the overall condition.

It's a great terraced property.

Nice finish, superb presentation

and certainly would make the perfect first-time buyer home.

The rear garden is particularly nice.

I think they've done a really good job.

It's enclosed, it's private and easy to maintain.

Lee and his mum hope to sell this property on but if it didn't sell

then they would have to consider the rental market.

My recommended rental value would be £525 per calendar month

to £550 per calendar month.

The rental market is really strong in this area so in my opinion,

this property would let for a figure of £575 per calendar month.

Yes, that's a good monthly value,

although we are going to put it on the market for sale.

Yes, even rental values of £525 per calendar month would generate

a yield of above 6%.

But ideally, this was a buy, do up and sell project,

so having invested £102,500 in the house,

is there a profit to be had?

My recommended sale value for the property would be

£125,000 to £130,000.

In my opinion, this property will sell for offers over £125,000.

That's excellent, that's what I was hoping for and we've already

put it on the market at £134,950

hoping to achieve £130,000.

And those resale values could see a potential pre-tax profit

of between £22,500 and £27,500.

Not bad.

So is Lee, together with his mum, planning more seasonal work?

I'm very, very busy at the moment, but now me mum's done this one,

she's eager to get another project on the go

and she's got one in the pipelines so that'll keep me even busier.

We'll have lots more auction properties for you

next time on Homes Under The Hammer.

-Yes, join us then for more action from the auctions.

-Goodbye.

-Goodbye.