Episode 25 Homes Under the Hammer

Hello, and welcome to the show.

Whether you're buying property as a home or an investment,

you want to make sure you've bought wisely.

Mmm, now it's difficult to find,

but what you are looking for is value for money.

And one way you can find that is by going to the auctions.

From run-down flats to sprawling, gorgeous mansions,

there are all sorts of properties on offer at auction.

So here are the properties that made our buyers

put their hands in their pockets on today's show.

In Lewisham, London, this two-bed flat could have a problem.

What you can do about it...

It's a bit of a tricky one.

But in Rainham, Kent, I know exactly what I want to do.

I kind of think that's in the way.

And in Northwood, Staffordshire,

will two properties mean double trouble?

First-time property developer. It's, you know, it's a bit of a risk.

All these properties have been sold at auction.

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

when they went under the hammer.

We all done?

This is Lewisham in south-east London,

a borough which borders Bromley, Greenwich and Southwark.

Lewisham is considered one of the more affordable parts of London to live in,

and yet you've got really good connections into the city itself,

you've got DLR station, mainline, no tube,

but who cares when you're getting

the kind of property that I'm here to see

for the kind of money we're talking about?

Because, I'm here to see a two-bedroom ground-floor flat.

It had a guide price of 130,000 quid.

Ooh, it's got you interested, hasn't it?

Especially when you consider some of the ground-floor two-bed flats

in the neighbouring borough of Greenwich

are being marketed for over three times the guide price of this property.

And this particular ground-floor flat

comes with its own private section of back garden,

its own parking space and shared freehold

with the other two flats in the building.

Obviously one of the big bonuses is it's a ground-floor flat

and in general, I think, they are well liked.

But through the door, um, big kind of like entrance area here,

which is currently, rather disastrously,

being used as the kitchen.

Well, that just doesn't work, does it?

In terms of the layout, you've got the bathroom there, that looks pretty grimy there.

Bedroom there, second bedroom at the end,

and then through into the living room.

And it's not a bad size, but so much more you could do with this place.

I'm thinking knocking through that wall,

so at least you get more light

and maybe access out into the garden.

It's one of those flats, it could be so much

and right now it just ain't fulfilling its true potential.

There is undoubtedly a flat here,

but the layout is quite frankly all over the place.

MUSIC: "Neighbourhood" by Space

And the general condition's not great either.

Now there are signs of damp around the flat,

which you definitely have to look at,

a few little things like this boxy thing on the wall,

that's actually a forced air pump, actually pumping air into the flat,

obviously to try and get rid of some of the stagnant air

and hopefully aid that damp problem,

but something you definitely want to consider.

The other thing when you're buying a flat is

it's not just about where your flat is, it's about the other flats

in whatever building you're talking about

and how they're maintained. For instance, if you look up here,

you've got all this water staining on the ceiling.

Now, clearly that hasn't come from this flat, it's come from the flat above.

So what you can do about it...

It's a bit of a tricky one.

The potential good news is that the flat above

was also up for auction and that may mean

the new owner is going to carry out some renovation too

and that could be the perfect time to sort out any leaking pipe issues.

So, I would make it my priority to get to know the neighbours.

Another bit of good news about the flat

is the ground rent you have to pay.

Now, when you buy a flat, there are costs associated.

Often there will be some shared management charge,

which is shared with the other flat holders,

and that will look after things like the exterior of the building,

maintenance of the gardens, etc.

And you also might have to pay a rent to the freeholder

and, in this case, this property has -

this could be something of a clue -

something called a peppercorn rent.

So, exactly what is peppercorn rent? Well, in years gone by,

the rent was basically so small

that in order to save them the problem of actually collecting it,

the freeholder would actually ask

for the rent to be paid in peppercorns.

-# Colours of the world

-# Spice up your life

-# Every boy and every girl

-# Spice up your life

-# People of the world

-# Spice up your life

# Ah... #

And I think I've found another way to spice up this flat

and give it a wow factor.

One of the things about ground-floor flats is it often gives you

the opportunity to do some kind of extension

and that's certainly the case out the back of the property here,

where I think some kind of French doors in THERE would be ideal

coming out into some extension in this area here.

Now, the only issue is you've got to get the approval, in this case,

of the other owners of the other flats,

because you actually own a third of the freehold of the building.

So as long as they're in approval,

then some single-storey extension here and maybe, you know,

with lots of roof lighting, etc, so you get lots of light,

would make such a difference to the flat.

It will, of course, need the all-important planning permission,

as well as consent from the other freeholders,

but potentially what a great opportunity.

So, is a local estate agent as enthusiastic as I am

about what's on offer here?

First impression, needs quite a lot of work.

Cooking in the corridors is a no-go.

I would definitely suggest moving the kitchen into the lounge area,

or hope to extend.

That would probably be my recommendation.

Layout aside though, this flat was guided at £130,000.

For a two-bedroom flat in London,

well, quite frankly that's pretty cheap.

So, what might it be worth if it was fully renovated?

I would expect to achieve around £225,000 to £230,000.

If you put an extension on the side,

I would expect to achieve anything from £250,000

to £265,000.

Well, either way, that's quite a jump up from the guide price.

What about rental returns?

If you decorated this property to a nice standard,

you'd be able to achieve around £1,200 per calendar month.

So, a few layout and potential damp issues with this flat,

but intrinsically one that you could definitely add value to.

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

Now to Lot 132.

A two-bedroom lower-ground-floor flat.

Direct access to the garden.

Somebody want to start me off 140?

Thank you, 140 I've got. 141?

Thank you, 141. 142. 143, 144.

This was turning out to be a hot lot.

We rejoin the bidding at 180,000.

180. 180.

181, 182, 183,

184, 185, 186,

187, 188.

No?

Back to you, sir, bid's at £187,000.

187 for the first,

187 for the second,

187 for the third and final time, we all done?

Sold, 187,000.

The hammer finally went down on 187,000,

meaning buyer Roy paid a whacking 57,000 over the guide price.

Roy, who used to be a gas engineer,

and his wife Jenny, have bought this two-bedroom flat as their new home.

-Jenny, Roy, good to meet you.

-Good to meet you, Martin.

-Congratulations.

-Thank you.

-Yes, we think we've done well.

-Yes, fantastic.

Tell me why you wanted to buy this little flat.

We looked at basically three separate properties, really.

There's this one, the one upstairs

and the one, you know, further along in Lewisham.

This one, though, it had the most potential,

you could do things with this one.

Not only that,

-it led straight into the garden, it's a garden flat.

-Yes.

And I think that was one of the key points.

-Also of course, share of the freehold.

-Which is good, that gives you some options.

-It's a lot better than I thought it was when we first looked at it.

-Ooh.

Because we came here on a cold, damp,

you know, horrible day, to be honest with you, a rainy day.

And we, you know, didn't see things as they were

when we first came in here. I didn't, anyway.

When I walked in this morning, it looks bright,

it's a lot better than I thought it was.

Well, I'm glad Roy is managing to be so sunny in his attitude.

That could be because he, Jenny and their daughter Ria

have just returned to London from a few years in much sunnier climes.

We were living in Jamaica for about 10 years.

What happened, my daughter, you know,

she wanted to come back and to go to work here and study

-and so forth. And then also, our family's here as well.

-Right.

And so that's why, you know, we decided to come back.

And what kind of a place did you leave in Jamaica?

It was a...

-A six-bedroomed house with four bathroom...

-Oh.

-As a matter of fact, it was stupidly big.

-Yes.

That's what I call it, it was just too big for three people.

-So, you're happy to be back though?

-Yes, definitely.

-Definitely, we're so happy to be back.

Yes, with their 17-year-old daughter keen to return, Roy and Jenny

decided to take on the challenge of this two-bedroom ground-floor flat.

They plan to live in it for a while and then sell it on.

So tell me what you're going to do to this place, then.

First of all what we're going to do

is put an extension at the back there.

-We're going to put the kitchen out there.

-Oh, OK.

-Cos that's not a kitchen, that's a hallway.

-Yes.

So we're going to put the kitchen out there,

and we're going to have an open-plan kitchen/dining/lounge area,

we're going to get rid of this wall here,

and new bathroom, new flooring...

Basically, we're going to try and get an en-suite bathroom

-in that front bedroom as well, change it around a bit.

-What's the budget?

Well, the budget's around 15,000.

I don't want to spend anything like that,

so we're going to do it in a way that we like.

We're going to be living here for a couple years,

-and then we're going to move out.

-Who's going to do the work?

I've got builders lined up for the extension

when I've got the approval from the individuals upstairs.

The rest of the stuff, though - the kitchen, the flooring,

the bathroom - I'll do all of that.

Have you got much experience in building?

Yes, we've actually done two flats before, me and my wife,

-but that was more than ten years ago, I was a lot younger then.

-Right!

A couple of flats...matter of fact,

one of them was in worse condition than this.

And how long is it going to take, do you have any idea?

Hopefully four to six weeks,

or I'm going to give a couple weeks on top, say eight weeks.

-Bing-bang-boom.

-Mmm.

Well, bing-bang-boom, yeah, but done well.

Listen, congratulations, good luck with it,

and we look forward to seeing how you get on.

So, from a mansion in Jamaica to a flat in Lewisham,

it has been a big move for Jenny and Roy.

Still, they seem happy enough,

as long as they can get the approval

of the other leaseholders for that extension.

How will it all go? You can find out later in the show.

So, leaving London behind, if you hopped on a train

it would only take you an hour to get here - Rainham, in Kent.

One of the most desirable of the Medway towns,

with easy access on to the M2 motorway,

train links to London, as well as plenty of local facilities,

including a shopping precinct, a library and parkland.

For convenience, this street definitely gets a tick in the box,

as I've just turned off the main road,

which has both local shops and the train station.

The property I'm here to see is a two-bed semi,

it had a guide price of £120,000 to £125,000.

Looks in pretty good condition from the outside.

Let's head on in and see if that theme continues.

Always nice to see a porch, keeps the cold out in the winter!

Storage for muddy boots and coats.

Little bit of character still left on the inside, which is nice to see,

although it completely needs updating,

you can see by the wallpaper and the carpets.

First reception room, lots of damp under that window,

so that definitely needs to be looked at,

and the second reception room at the back of the property,

this is a fantastic space.

Not only this, you get a big cellar down there as well,

so you could definitely convert that or do something with it.

But look. This is the kitchen!

It goes on for ever. You've got a downstairs loo as well,

which is fantastic, this would be great for families.

The only negative at the moment is there's only two bedrooms upstairs.

Not only does it go on and on, but it also goes down and down.

This house is a real TARDIS of a property.

Travelling upstairs,

there's a decent-sized double to the front, another at the back,

and uh-oh - my old nemesis -

a bathroom that leads off the bedroom with no independent access.

Urgh! Not ideal.

If it was me, I would switch the stairs round,

create a corridor to the end room

and perhaps turn that big bathroom into another bedroom.

Oh, and it goes without saying, the yellow loo is a no-no.

There's loads of work to be done in this peculiar property,

and it doesn't end here.

This Victorian semi has had many, many additions over the years,

and you only need to look up - da-da-da -

and you can see, an extension here, an extension there.

And, of course, look -

you could extend even further if you wanted to.

You've got a little bit of yard,

and then you've got this brick-built structure.

Now, I'm not quite sure whether you would want to keep this,

although it could be handy to store your tools,

you could have it as a work space,

but then as you move further away from the property,

you've got your other piece of garden.

I kind of think that's in the way.

I think I'd be inclined to knock that down

and stick a nice wooden shed up at the end here.

But come and look at this.

It gets even better.

You've got a shared driveway running alongside the house,

leading to five parking spaces right at the end.

Another great bonus.

MUSIC: "Pull Up To The Bumper" by Grace Jones

This unassuming semi, with all its versatility, inside and out,

is so brimming with options that it's hard to know where to start.

Just the off-road parking, should you decide to rent it out,

could earn you £20 a month per space.

As for the rest, what does the local agent think

of the possibilities for this house,

guided at £120,000 to £125,000?

Options really are...not endless,

but there's a lot of options, unusually.

But I would think you would try to get at least four bedrooms here.

You've got a loft space you could utilise,

possibility of extending at the back to either go out or to come up.

Basement, I've looked at,

I don't think would be a serviceable room,

but definitely could be a space, i.e. a playroom, gym.

So somebody's got to sit down, plan it, cost it,

then they can decide which way they're going to go.

We're agreed this house could be extended up, down and sideways,

but will the numbers keep going upwards?

Once renovated just as a two-bedroom property,

this property should be worth in the region of £160,000 to £170,000.

If this property was renovated as a three-bedroom,

then I think you could achieve a price around £180,000 to £190,000.

If you took the renovations further,

then I think you could achieve £250,000.

Wow!

So extending further and creating a fourth bedroom may pay dividends.

The potential rental incomes range from

750 per calendar month for a two-bed

to £900 per calendar month for a three-bed

and up to £1,200 per calendar month for a four-bed.

The potential of this property

really could get the auction buzzing.

Well, this semi has surprised me, and in a really good way.

There are so many options here,

but the right decisions need to be made

so that you can maximise the potential

that this property definitely has,

and I think finding that extra bedroom is key.

Let's see who was up for this challenge when it went to auction.

It's a semidetached house, start me at 120. Rainham address.

120 I have, thank you. 122 do I see?

122, 125, 125 is bid, and 127.

127, 130, 132, 135, 137...

and 140.

140 is bid, 142, 145, sir.

At £145,000, the gentleman's bid in the blue shirt.

146, 147, 147...

And 148. 148 in a fresh place.

149, and 150.

151? Either of you. 152? 151 is bid on my right.

For the first time then,

the gentleman in the blue shirt at 151,000.

At £151,000 for the second time...

151,000 for the third and final time...

at 151,000, are we all done?

MUSIC: "Family Affair" by Sly and the Family Stone

The successful bid of £151,000

was made by experienced property developer Gerry,

who has recently employed son Dan to join his company.

I met the father-and-son team

back at the property to decipher their plans.

Guys, congratulations. How well do you know Rainham

and why did you want to buy here in particular?

We know Rainham very well, we've got our business here,

we've been here for 25 years, a lot of properties that we own.

We were involved in the development next door,

kept an eye on this place,

and when it became available, obviously was interested in buying.

You snapped it up on auction day!

Let's talk through some of the changes

you hope to do with this property,

starting with upstairs.

What we're going to do is,

the bathroom we are going to make into a third bedroom,

then we're going to move that bathroom, make it a shower room,

make a bit of room out of the front bedroom and middle bedroom,

so there'll be a shower and WC and a wash-hand basin there.

So you're going to be creating a corridor upstairs as well?

Yes, we're going to put a stub wall up

with an entry-door into the middle bedroom.

Because upstairs is where it's pinched for space

and where you need to change it.

You've got a basement down there,

what are you going to do with that?

The basement we're going to convert into the fourth bedroom.

The basement is where the money's going to be spent.

We've got to tank it first to make it watertight,

then we've got to open up the window to let natural light in.

Then dry-line and Gyprock and insulate the floor.

So you're going to turn this into a four-bedroom family house, really.

I'm a bit worried about the downstairs bedroom,

-the basement room.

-Right.

Where are you going to steal the natural light from?

There is a window there

and we've got to open up the space on the outside

so that it reflects the light back in.

It'll be light.

-Enough?

-Enough.

Not what I was expecting.

The basement does not seem an obvious choice for a bedroom to me.

Gerry and Dan also have plans to create a second bathroom

at the back of the existing kitchen.

Along with the basement plans,

this house will be transformed from a two-bed semi

to a four-bed with two bathrooms.

Big plans afoot then,

so they'll need every penny of the £30,000 budget they've set.

There's lots of work to be done for that sum of money.

Now, Dan, do you get involved in the renovation side of things?

I try and keep as much off my dad as possible,

so I try and organise the trades to get in, give us prices,

give them time periods to get in and get the work done

and organise the order they go in.

But, yeah, I try and get involved

in the dirty work of ripping it out

and getting it clear for work to be started,

but apart from that, just organising the trades is the main thing.

Well, Dan has certainly got his work cut out,

because we haven't even got to the plans for the outside yet.

-What about that brick-built shed in the garden?

-There's two options.

One, we leave it as it is, as a shed.

Alternatively, a potential buyer could convert it,

or ask us to convert it into an office.

Something I find appealing as well

is all the car parking you've got at the back here,

because this is not the best road to park on, let's be honest.

That was one of the appeals, there's parking out there -

once we clear that area - for about five cars.

So plenty of space.

Well, the plans Dan and Gerry have got

will require some handy manoeuvring.

But with Gerry's experience,

not to mention a portfolio of 60 properties,

these guys are ideal developers.

Gerry started off in finance,

a pretty sound background for property developing.

Used to be a finance rep many years ago for a finance company

and used to do the funding for high-end cars,

and a lot of the guys I seemed to be doing the funding for

was for property developers.

Like my cars, and it's something I always wanted to get into.

Went into financial services, then the estate agency,

and then got my foot in the door as far as finding properties...

Did you get the fast car?

-Oh, most definitely.

-Yay!

I would say Gerry's passion for fast cars

is matched with his passion for property,

with 60 properties under his belt.

I reckon Dan has got a great opportunity

with his dad in the driving seat.

It's a different thing every day, it's not the same every day,

so there's always something new to learn and take on board,

so it's a good learning process, definitely.

So, chaps, how long is this project going to take you?

-Four months, maximum.

-Yeah.

-What were you going to say?

I was going to say three, but...just...I don't know.

Your dad's got more experience.

Exactly, I'm not going to argue with him, as I said.

Three to four months.

Well, it's going to be really interesting

seeing it when it's done, and I'm really looking forward to it.

-Congratulations, guys, lovely to meet you.

-Thank you.

-Thanks, Gerry.

Well, Dan and Gerry have big plans for this place,

but is converting that basement really worth the time and money?

They're going to have to do a SUPERB job of it to win people over.

Join me later in the programme and you can find out

if this project is a smooth ride

or whether it skids out of control.

Coming up, some not-so-hidden gems in this long-abandoned house.

I absolutely love this fireplace.

And careful budgeting isn't always an exact science.

This small section about there

cost me about £3,500.

Back now to Lewisham in Southeast London,

where Roy, a former engineer with British Gas,

and his wife Jenny have just returned to London

having lived in Jamaica for the past ten years.

-It was a six-bedroom house with four bathrooms.

-Oh!

As a matter of fact, it was stupidly big.

-So you're happy to be back though?

-Yeah, definitely.

Definitely, we'd say we're happy to be back.

They snapped up this two-bed maisonette for 187,000.

Roy intended doing all the renovations himself,

and hoped to keep to a timescale of six to eight weeks.

What we're going to do is put an extension at the back,

-put the kitchen out there.

-Oh, OK.

Cos that's not a kitchen, that's a hallway, basically.

We're going to have an open-plan kitchen/dining/lounge area,

and new bathroom, new flooring.

-What's the budget?

-Well, the budget's about 15,000.

We're going to do it in a way that we're going to like it.

Roy put his job as a gas engineer on hold

so they could focus on getting the property just the way they wanted.

And he's set himself a rather tight six-to-eight-week schedule.

So, Roy, how did that go?

It was meant to take me six to eight weeks, it actually took me a year.

Um, why did it take a year?

-I don't know.

-A year?! I can't wait to see what's been going on.

At least the year hasn't been wasted.

I think you'll agree he's managed to transform

this tired, dated flat

into something that looks contemporary and bright.

The whole flat feels much more spacious,

so how does the layout differ?

We built an extension and put a kitchen in there.

We knocked the wall down that was in the bedroom,

from the hallway, actually, and we opened it all up.

We changed the bedroom into the lounge

and we turned the lounge into the bedroom,

so we can have an en-suite bathroom in the new bedroom,

and basically that's it.

We just kind of done everything else.

Roy has carried out a major rejig of this property - no small feat.

And the rate of work did slow down after they moved in,

but it turns out there are other reasons

why his timescale slipped so much.

Problems, problems, problems, OK...

When we started to do the work, first of all,

what I noticed was, as I went into what was the front room, the lounge,

and I went over to the corner, stepped there,

everything just went through.

The joists had rotted away and the column was gone.

So I had to build a new column in there, replace the joist,

-that was one thing.

-Problem number two?

There was an issue with damp, but it wasn't rising damp,

it was damp from above, actually.

So what happened was

we had to replace the soffits and the fascia and the guttering,

so after that was done and we put the central heating on,

the damp went away.

Problem solved, bring on problem number three.

I said to Jenny, "OK, it's time to decorate now,

I said, "Just take the wallpaper off the wall."

And all the plaster came off with it!

-So we had to have the place re-plastered.

-Number four?

Then the plasterer, he done a wonderful job,

he plastered the bathroom, and once Jenny was having a bath,

and all the plaster came off the ceiling and fell down.

So there was a lot of challenges,

but of course, we overcame them in the end.

Ha! Great attitude.

Having taken on all the work himself, apart from plastering,

with all those problems to deal with, how did Roy cope?

This has been a renewed apprenticeship for me.

Things I'd forgotten that I could do,

I've just actually spent a year

learning to do those things again.

And how did the original budget hold up?

It was meant to be £15,000 to £17,000.

Because I've done a lot of the work myself,

I've managed to keep the budget

and I've done that very well.

What it is though,

whatever I've got left over to make it up to 17,000,

I'm going to spend it by having a good meal with my wife,

a good holiday, whatever it is.

Just to make sure that I do spend the 17,000.

Roy, that's my kind of budgeting!

So, if we include the holiday or meal in the budget,

and add it to the purchase price of 187,000,

it means Roy and Jenny have invested £204,000.

So, will there be any other treats in store

once our two local property experts

have looked over Roy and Jenny's handiwork?

The layout's very good,

I like the large lounge

with all the accommodation running off of it.

Generally speaking,

their specification is very, very high.

The kitchen, the bathroom, it's finished very well.

Looks like a very good job's been done refurbishing it

and making it a very nice, spacious flat.

Especially the access directly on to the garden.

There are no negatives to this property.

Generally speaking, it's a fine property

and it will sell and let very, very quickly.

If I was going to let the property

I'd be looking at it to achieve £1,200 per calendar month.

I would start off at a rent between £1,250 and £1,300 per calendar month.

With these valuations,

that would give a rental yield of around 6.5% to 7%.

Would this tempt Roy and Jenny to rent the property out?

No, we wouldn't consider renting it,

we're definitely going to sell

because we need to live in a house, so we have to move.

As Roy and Jenny close the door on the rental amount,

let's try them with the resale figures.

If I was to put this property on the market,

I would market the property for £325,000.

I would market it at £300,000 to £325,000.

Words fail me!

I think we can take it that Roy and Jenny are pleased

with the possible profit,

minus taxes and expenses, of between £96,000 and £121,000.

So, would they be tempted to go through it all again?

Looking at the profit at the end of it,

it's really made it worthwhile.

But I'm not certain I want to do it all again, no.

Yeah, for me it was really hard work,

but at the end of the day, it's rewarding.

How true. Pick wisely at auction and the rewards can be high indeed.

And I'm here in the Staffordshire town of Northwood

to see another property with potential.

So, what was on offer at the auction?

Interesting one this - two lots, both at the same guide price,

both next to each other,

both physically and in the auction catalogue.

Let's take a look at this one first.

This, I'm afraid, is going to be a very cursory look.

Both of these lots have a prohibition order on them.

That's a formal notice served by the Environmental Health Officer

or the fire service

that says this house can't be occupied

as it's in a dangerous state.

Looking at this one, I don't think that's up for debate.

The order also means the council will want to supervise and certify

any works carried out on the property.

The guide price for each of these lots,

which have been abandoned for many years, was £18,000.

I think I'll check out next door,

which is apparently not quite so bad - thank goodness.

Always a sense of trepidation...

HE LAUGHS

..when a house is so heavily boarded up on the outside.

What are you going to find when you walk through the door?

But actually...

..this is not too bad, I like it.

Good-sized front lounge area, got an open fire,

it's been knocked through.

The tiles on the floor,

realistically, they're going to be very cold

and not something you'd want to live with,

but they're actually quite beautiful

and very typical of this area, so in a way, it's a shame to lose them.

But you've got the front area there, rear area here,

I absolutely love this fireplace -

I mean, how fantastic a feature is that?

It really brings this rear area to life.

Little door there going down to - yep - some kind of a cellar.

Kitchen through there.

Very traditional layout, two rooms here

and then through to a kitchen, which is probably an extension.

Then, yeah, up to the bedrooms. Let's take a look at the kitchen.

Well, it's a bit grubby,

looks to me like there's been some kind of fire in there,

judging by the soot on the walls.

But it's not a bad size,

lots of light from those windows,

and I think, hidden beneath all this stuff...

..is actually some lovely, lovely things, like this door.

Get that stripped or polished up and it'd be absolutely charming.

It's a good size and I really like the ceiling height as well.

So, strip it out, what a difference.

Restoring a property that's been derelict for decades

and suffered fire damage means safety first.

The electrics need to be thoroughly checked out,

and of course, the structural integrity of the building

might have been compromised here.

Just because it's not obvious

doesn't mean it's not something to worry about.

Next door, well, clearly there's a lot more damage.

I'll leave the upstairs of that one to your imagination,

as it wasn't safe to go up.

But looking round the other house, it's not hard to see potential.

It has got a nice feel to it, this house, I can't put my finger on why,

but nice, spacious rooms up here. Good-sized rear bedroom there.

A really nice-sized front bedroom,

maybe a bit of noise from the road, but... I don't know,

it's got a few quirky things, love that old fireplace.

Then over there, what looks like a cupboard.

It's actually an upstairs bathroom and loo,

obviously built into the extension above the kitchen.

Not the sort of thing you would expect

from this type of property, and a real positive thing to have.

A shower in it, no actual loo,

but there's all the pipework there, which is the important thing.

It's just a really, really good bonus.

The extension makes this hose a little larger

than its poorly neighbour.

And the good news continues here,

to what might possibly be a sizeable garden.

Tricky to tell until it's cleared of greenery and the outside loo.

The auctioneer who sold it

came along to tell us a bit about these properties.

The pair of houses here

have been empty for a long time.

One of the properties seems to be in more disrepair than the other.

The council have put a prohibition order on both properties,

so any buyers really should investigate the content of that.

There is various works that have to be done

in a certain way

before the properties can be occupied.

That means the new owner

will need to get the work signed off by the council as things progress,

to ensure the work meets approval.

Remember, these are separate lots.

You could buy one, but maybe it makes sense to buy both of them.

There might be economies of scale,

but there are going to be a lot of hoops to jump through

and there is a lot of work - not a project for the faint-hearted.

So would it be worth a gamble?

What could these two-bedroom properties be worth once renovated?

After renovation, each of these properties

would be placed on the market in the region of £70,000.

And the rental potential?

After renovation, the rental values of these properties

would be in the region of £400 per calendar month.

Well, in this instance,

the sum of the two may be greater than the two individual properties.

Double the trouble? No, I think double the potential.

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

And as far as I can recall,

this is a first for Homes Under The Hammer,

as we followed the fate of two lots.

First, the more damaged of the properties.

It's a mid-terrace house, it does need full renovation,

it has two bedrooms

and there is a suspended prohibition order placed on the property.

15, can I say?

Lot number 38. 12 then?

Am I going to get 12?

Lot number 38. 12 bid, 13?

-And the bidding rapidly moved up to £23,000.

-23...

24, 25...26?

No, at 25,000, on the front row. 26, 27...

£27,000. 28, anywhere else?

If not, I'm selling it at 27. 28, 29...30?

Sure? 30, anyone else?

If not, £29,000 for the first time...

£29,000 for the second time...

third and final time at £29,000...

Well done.

The first house was purchased by Adam for 29,000.

Lot 39 is the adjoining property.

Now I think the wise thing here to have done

is to go for the second house too.

I wonder if Adam agreed?

..third and final time, 38,500...

Bought it, well done.

Yes, he did! Buying the second house for £38,500.

He's going to need that hard hat for the first property,

but I met up with him

in his relatively safe second purchase to find out the plans.

-Adam, great to meet you.

-You too, Martin.

-Congratulations.

-Thank you.

So, just before we go any further, tell me what happened there then.

Well, one lot came up and I got that,

saw this one next door as well and thought, "Have them both."

Did you go to the auction anticipating buying both?

Yes, it was in the back of my head,

I'd actually been to see about 15, 20 properties

throughout the catalogue,

so I'd really hedged my bets.

First-time property developer, it's a bit of a risk,

but it was these two we wanted.

Adam has a silent business partner for this investment project

who won't be hands-on,

but they've worked before on two other properties,

so they've got experience.

Tell me why, then, you wanted to buy them.

Well, I worked in human resources back in London,

but I've always wanted to get into property development,

-I've got a couple of buy-to-lets in London as well.

-Right.

Remortgaged the house and... here we are, really.

I've had to come up north a little bit,

cos obviously down south is very, very expensive,

so hopefully this is the start of something big.

New business, new career.

-So it was the price that attracted you to this location?

-Yeah.

-And what about these houses in particular?

-Well, these houses...

Next door is a traditional two-up two-down, this one the same

but they've had the extension done to the back

so you've got the separate kitchen.

Beautiful big gardens, both of them actually,

which would be real selling points for both properties.

Right, you say "selling", is that the idea?

We would like to sell, ideally,

however, we know the market's not great at the moment,

so we've got renting in the back of our minds as well.

So you are going to be down and dirty, getting your hands...?

Yes, as much a possible, obviously to think about costs as well,

to keep the costs down.

Digging holes for extensions... MARTIN LAUGHS

..taking plaster off. I'll be doing all the dirty stuff.

The professional stuff I can't do.

Got a brother who's an electrician as well, so be saving some money there.

Let's start with the one in the worse state, next door,

what are you going to do to that?

Well, there's been some dry-rot issues,

the guttering fell down at the back.

Over a couple of years a lot of water's got in.

Dry-line it, build an extension out the back,

-kitchen and then bathroom at the back.

-Plans for this one?

We've got two bedrooms upstairs,

one of them's really big at the front,

so we're hoping to split that into two bedrooms

so we've got three bedrooms altogether upstairs.

Lovely bathroom at the back upstairs as well,

which is rare for this area, most are downstairs.

And just bring the house back

to something that people would like to live in.

There are some lovely features remaining in this house.

I wonder if the upstairs of its neighbour,

which we haven't been able to see, holds as much potential.

Both properties have a prohibition order on them,

what do you know about that and how's it going to affect you?

I've been in touch with the council and had discussions with them,

they've said obviously what needs doing, so double-glazing,

there's an issue with the chimney,

got to get it up to a modern standard.

These are basic things we were going to do anyway,

so it's not a huge issue.

Adam and his business partner

have set aside a budget of £12,000 to £15,000 for this house

and £20,000 for the house next door,

to include all the repairs and that hoped-for extension.

Budgets that on the face of it seem pretty tight,

but because of the economies of scale,

and getting two houses done at the same time by the same people,

it's likely that some savings can be made.

Adam's hoping to have the two properties finished

within the next four months.

And once you've finished these two, what's next?

We are looking at getting something else.

Yeah, move on to our next development.

-Listen, congratulations.

-Thank you.

-Few challenges ahead.

-Definitely.

-But we wish you all the best with them.

-Thanks, Martin.

So, will it be double the trouble or double the profit for Adam

as he takes on these adjoining properties in Stoke?

You can find out how he gets on later in the show.

Well, the clock has been ticking, work should...ahem,

have been progressing on those properties.

Have those piles of bricks, bags of cement gone,

is the paint dry on the walls?

-No chance.

-Let's find out.

We now head back down south to Rainham in Kent,

where earlier we visited this two-bed semi.

How it only had two bedrooms was a mystery,

because the ground floor had no shortage of space.

This is the kitchen! It goes on for ever.

Not only this, you get a big cellar down there as well.

Well, this semi has had many, many additions over the years,

and you only need to look up and you can see.

There was definitely a mismatch,

but father-and-son team Gerry and Dan

had big plans to make this into a four-bed house.

Controversially, for me at any rate,

was that they planned to put one in that basement.

I'm a bit worried about the downstairs basement room.

Where are you going to steal the natural light from?

There is a window there

and we've got to open up the space on the outside.

So, chaps, how long is this project going to take you?

-Four months, maximum.

-What were you going to say?

-I was going to say three, but...

-Your dad's got more experience.

Exactly, I'm not going to argue with him, as I said.

-LAUGHING:

-Well, maybe it's just as well Dan didn't argue

because, five months later, we return.

It's a stunning transformation, so how did the teamwork pan out?

Dan was more on-site than I was, I would pop in every couple of days.

-I got more involved towards the end cos...

-He's got the keen eye.

I'm the critical one, shall we say, and I want it done right.

They always intended on making this a four-bed,

but I can see jobs that they didn't intend.

We've actually moved the stairs.

We also didn't intend to put a mini extension on the back.

But we've ended up doing that

because what was there before just wasn't practical.

Blimey, an extension on a house with so many extensions?

That was brave.

Previously, the back door was here,

and there was a single-storey brick extension.

We decided to square off this section here

and this small section about here

cost me about £3,500.

Because we had to go for full planning,

because it was an extension on an extension.

But I think it's been worth it, it's opened this area up,

you've got nice French doors out onto the garden.

So much for the problems above ground,

but what about underground?

The basement was a big hurdle.

We thought it would be reasonably straightforward,

but to conform with buildings regs,

dry-line, damp-proofing, materials etc,

then we had to build an internal wall then line that out.

Got to have bright colours in the basement

to reflect the light you're going to get in,

and the window is quite a decent size,

and we've painted outside to reflect more light in there,

and with the grill over the top, which we have to have for security.

Having successfully tackled all the major building issues,

what about the general refurbishment?

Well, downstairs, the two rooms have been knocked through

to provide a bright, spacious area which leads to the kitchen.

Also downstairs, a new shower room replaces a dilapidated toilet.

Upstairs, some careful planning has created a new bathroom

and three double-sized bedrooms.

Now, we haven't mentioned the garden

and all those all-important parking spaces.

We've extended the garden by -

we actually own the land -

from the back of the fence where it originally was,

to the end of the parking area at the back.

And there were five car spaces, which was too many.

So we moved the fence panels out a bit,

moved the gate, and reduced it so there's three parking spaces.

So has the addition of two extra bedrooms

led to an addition to the original budget of 30,000?

MUSIC: "Money's Too Tight To Mention" by Simply Red

We decided that we were going to

go for the extra cost of the extension

and the patio doors out the back.

The overall cost -

I wouldn't be surprised if we've spent less than 45k.

I was keeping an eye on that,

updating him as we were going along, but it was OK,

as long as it sells for what we think it should do, we'll be OK.

We'll be OK.

Well, let's see if they are going to be OK.

That £45,000 added to their purchase price of 151,000

brings the grand total to £196,000.

What did two agents make of this unusual conversion?

It's not what I expected.

I expected to come and see a two-bedroom semidetached house,

which is what he bought,

I've come and seen a really, really well done-up four-bedroom,

and it's a big difference, it's lovely.

What I would try to get across is

appealing to those people who like a bit of character

but want a new house.

What you've got here is the two blended together -

nice, neat new house, but it's an old building, built better,

doesn't have the problems of a new-build, hopefully.

This society - modern people, modern living,

they want it nice, new, clean, don't they?

"I'll move straight into it." And I think they've done really well,

so I've got to say well done to the guys.

I love to find something wrong. And this particular property, I can't.

He's thought it out well, he's obviously not a beginner,

he's thought it out and done the job that needs doing in here

in order to get the best possible price.

The estate agents like this property

and they think it could rent

for around £1,200 to £1,250 per calendar month.

That would mean a yield of over 7%.

We've got a portfolio of our own

and we're not looking to add to it at the moment.

This one purely is for redevelopment.

The resale market's difficult on this one

because it's so close to the 3% threshold on the stamp duty

at 250,000.

I would put it on "offers in excess of"

in order to get the best possible audience,

and expect to sell it for between £260,000 and £262,000.

This property could achieve in excess of £250,000.

With a total spend of £196,000,

this figures would give Gerry and Dan a profit before tax and expenses

of between £54,000 and £66,000.

Yeah, that's about the market value, 250,

and as soon as this one sells

it will release up the funds to buy one or two more.

And that's what we do, this is one of the businesses

and we use cash flow from this to do other projects.

And will this father-and-son partnership carry on?

The idea is for Dan to take a more active role in it.

When he can actually come into the house

and not find any little mark on the wall,

that is when he'll know that he can leave it to me.

Cos every single time there is one little bit

that he needs to change, or touch up, or do,

so when he can come in and say absolutely nothing, just say,

"Fair play, well done", that's when he knows he's ready, I think.

And then he can go off and do his own projects

and I'll just take an advisor's fee out of the profit.

So, taking on an unusual property can pay off,

and here in Northwood in Staffordshire,

I saw a very unusual lot indeed.

Two neighbouring properties

that were each under prohibition orders and needed serious work.

Both were bought by Adam,

a former HR consultant who had recently quit

to pursue a career in property development.

He bought not one, but both properties,

for £67,500 in total at the auction.

The question in my head was,

with so much to do, where on earth would you start?

So are you really going to be down and dirty, getting your hands...?

Yes, I am, as much as possible, obviously to keep the costs down.

Both Adam and his silent business partner

were fairly inexperienced developers,

but even for seasoned pros,

this double project would represent a big challenge.

They aim to make these properties less "hard hat"

and more "soft furnishings" in just four months.

Well, NINE months later we've returned.

First, the smaller property on the right,

which was definitely the worst of the two.

By knocking through the wall between the living and dining room,

they've created a double-aspect dining and living space

which is absolutely brimming with light.

They've replaced the old extension at the back

and fitted a lovely downstairs bathroom...

while moving the kitchen into the old dining space.

Heading upstairs to the two bedrooms

we couldn't even inspect first time round,

I'm guessing they look a bit better now.

The transformation from this once-derelict building

is not just evidenced on the inside.

What was once an unusable jungle full of trees

is now a lovely family garden.

It looks to me that just as much work

went in to transforming the outside as the inside.

There were trees going right up to and growing out the side

of the falling-down extension.

It was horrendous.

Sounds tough, especially when you consider

that Adam had to do it all twice.

Speaking of which, let's take a look next door.

This slightly larger property

is now also transformed into a bright and appealing space.

With a brand-new kitchen,

it's a far cry from the smoke-damaged shell it once was.

Upstairs, and the good work continues

with a brand-new bathroom suite.

And lovely bedrooms that have been decorated to a high standard.

But I'm sorry that that nice old fireplace has gone.

As with next door, the back garden is unrecognisable,

and pays testament to the blood, sweat and tears

that have clearly gone into transforming these two properties.

So, does Adam still feel it was a good idea to take on both?

Initially, I was very happy with the things I bought,

and I thought that having two properties side by side

would enable economies of scale,

would make the job a little easier,

the fact you've got two for the price of one.

But the reality of it

was slightly different.

I think, in my ideal, I had the two houses in my head,

I'd completely forgotten about the garden,

and that turned out to be such a huge problem in itself,

thinking we need to get sorted in the summer,

as well as dealing with the houses, or not dealing with the houses,

they kind of went to one side

because I was trying to find tradesman.

And the realisation of what I had to do as that went on,

i.e. getting an architect,

dealing with the council for the suspended prohibition orders.

All these things that came to the fore that I had to deal with,

and the most important thing, finding a builder,

became an issue.

And as time went on, and I spent more time in the garden,

yeah, the houses got left by the wayside

and then it was like, "Oh, my God, I've got these houses to sort out,

"not just the garden." Yeah, it became a bit scary.

Obviously this has been a real learning curve for Adam,

all the red tape he had to sort through

and just finding builders

that were willing to take on this project

meant his initial time frame of four months ballooned to eight months.

Plus, this whole project was a long way out of his comfort zone.

Before, I was in an office,

so I went from sitting behind a desk,

dealing with customers,

dealing with job applicants -

cos my previous role was recruitment -

to obviously getting my hands dirty

and having to project-manage

and deal with things I'd never felt before.

This became DIY to another level.

You're not kidding!

Having eventually found builders,

both properties have been fitted

with new windows, bathrooms and kitchens.

They've re-plumbed, painted, plastered, re-floored,

as well as had central heating installed in each.

Adam's brother, who's an electrician,

came and rewired both properties.

So how is that budget of a combined £32,000 to £35,000

for both properties looking now?

I'd say we're up to about £45,570-ish.

From the accounts that I've gone through and figured it all out.

So, yeah, we've gone over budget,

but as I said, there were issues with the garden that we had to deal with.

We had to get that done, we just thought it's a real selling point.

A lot of properties in this area don't have gardens like that.

It's been a tough few months for Adam,

but he has done a great job on what was a very tricky project.

He's always planned to sell,

so fingers crossed that two local property experts

will tell him that his total investment here of £113,000

has been money well spent.

Starting with the agent who saw it originally.

The property's been completely transformed

since my last visit, it's now done to a very good standard inside

and it really feels like a new-build property internally.

The property will be of interest to many people,

first-time buyers mainly.

I feel that this property would sell

within the first month of going on the market

and get quite a lot of interest.

I would anticipate the value for the larger property

to be in the region of £90,000,

and for the next-door property in the region of £80,000.

I feel this property will sell in today's market at £85,000.

The property that's smaller, next door,

I feel that this will achieve, in today's market, around £75,000.

Those valuations could mean a profit

of between £47,000 and £57,000

before tax and expenses.

It may have taken a lot longer than he anticipated,

but surely he must be feeling well chuffed with those numbers.

They're very pleasing figures, I must say,

and hopefully with the market the way it is,

they will sell quite quickly.

Potentially I'd like to sell one of the properties as quickly as possible

to pay off a few debts we have built up.

Then, with the other one, I think we'd look to sell

and then potentially do another project up here.

Something much easier that we can turn round a lot quicker.

It's been a steep learning curve for Adam,

but after all that work

he's ended up with two great properties and a well-earned profit.

Well, that's it for today's show,

so join us next time when we meet more brave buyers

either making a killing on property or just finding somewhere to live.

-We look forward to seeing you next time.

-Goodbye.

-Goodbye.