Episode 29 Homes Under the Hammer

Hello and welcome to the show.

Over the years property has proved to be a rock-solid investment,

despite the recent downturn.

So where can you find lots of

good-value properties for sale?

At an auction, of course!

Whether you're buying property as an investment or as somewhere

to live, you want to make sure you get good value for money.

-So, did the buyers on today's show manage that?

-Let's find out.

Here's what they bought.

In London, I'm teetering on the edge.

All in all...yeah, it's OK...

While, in Westgate-On-Sea, Kent, I'm jumping right in.

I always get a bit excited in the fresh air

and when I'm near the beach, but this place is huge!

And in Crewe, we find some stairs that should be beside the sea.

They are not building regulations- compliant, I would guess.

You'd expect to see something like this on a boat.

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.

Your lot, sir. Well done.

Now it's time for a little excursion.

No, sadly not to Switzerland,

but the swish and vaguely Swiss Cottage, in London NW6.

There's not a cuckoo clock in sight.

What can I say about Swiss Cottage?

A very popular area close to the extremely desirable South Hampstead.

Lots of Tubes, easy access into London.

Euston is only six minutes away. Nice feeling of community, as well.

Quite arty and crafty.

The property I'm here to see is a one-bedroom flat in this

fairly impressive looking building. Guide price was £280,000 plus.

Let's take a look.

And our flat is on the top floor of the building

and it still has 95 years on the lease left, which is good news.

But it has a train line running out the back, which is less good.

So, ex-local authority - we're expecting reasonable proportions.

One bedroom, that's it. Not a bad size.

This little entrance area here. That's your bathroom and loo.

Looks a bit tired and dated.

Through into your main living area. Now...look at the...

Look at the height of the ceilings!

Normally, I would say this is fantastic.

Somehow...

it makes the flat feel a little bit...strangely claustrophobic.

I don't know why that is.

I think this is a classic case where good interior design

is going to make all the difference.

How you paint and decorate this will definitely transform the flat.

But a nice big windows, which is good.

And through into the kitchen,

which is semi-open plan with the lounge area.

Obviously needs completely refitting,

but this bit of the flat is really quite respectable in terms of size.

And all in all...

yeah,

it's OK...

Not completely convinced yet.

# What you get is what you see

# There ain't nothing more to it

# If what you get is what you see

# Then I don't want your kind of love. #

There really isn't much to this flat.

What you CAN see is that it's tired, dated and,

to appeal to the local market,

it will need a top specification refurbishment -

shiny new kitchen, state-of-the-art bathroom, quality wooden flooring,

modern lighting, replumbed, rewired - the works.

Now, it may or may not be the case in this instance, but something

to be aware of and look out for when it comes to buying

ex-local authority or council housing

is that often they make the buyer pay

the seller's legal fees and that can run into many thousands of pounds.

It will state it in the legal pack, so once again,

it's a reason to read that legal pack before you buy the property.

# You ought to take it all in and check it all out. #

Yes, there are quite often little addendums which come with

the sale of any property which may mean you might not get quite

what you thought you were getting. So check, check and check again.

The flat is so small it didn't take long to check out.

What does a local estate agent think of it?

I think the property has a lot of potential.

It's got high ceilings, it's very light and bright. Great aspects.

It's on a very good position. The road is a bit noisy.

The railway behind makes it a little bit unattractive to some buyers,

but in general it offers a lot of scope.

But what should the renovation focus on to maximise the scope?

The kitchen and bathroom definitely need redoing.

The floor covering needs attention. The general decoration needs doing,

the windows improving.

But with the aspect and position of the property, it would really

make sense to do those things to enhance it.

The flat was guided at £280,000 plus,

but there's got to be at least £20,000 worth of work

to get it up to a good specification,

so would it be worth doing?

Depending on the quality of work that is carried out,

I think the value could be increased to about £420,000.

What?! Did he say £420,000?

I'm liking this flat more and more now!

So what about the rent?

I would think that the value is between £1,500 per calendar month

and 1,560 per calendar month.

The flat is certainly in a popular and well-located area,

and decent enough with a chance to really add value, I think.

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

So this is lot 231.

Second-floor one-bed flat. Who'd like to start me on this?

300.

Must be cheap. Thank you, 300 I've got.

How much?

305. OK. 310.

315.

320, sir.

320. 325.

330.

335.

No? 340?

336, if it helps?

336?

Yeah, 336. 337.

338.

338 coming in, new place. 339.

340.

340. 341.

OK, 345.

346.

347.

348.

349.

350.

351.

352.

353.

354.

355.

356. New place at the front.

357.

357.

358.

359.

360.

361.

360 at the front here.

It's against the gentleman on my right at the back. Anybody else?

If not, 360 for the first...

360 for the second...

360 for the third and final time... Are we all done?

Sold - 360.

So, for £360,000 - £80,000 over the guide price -

the one-bed Swiss Cottage flat was bought by Arsalan.

Arsalan lives and works in London

and he currently owns two other properties in the capital.

-Arsalan, really great to meet you. Congratulations.

-Thank you.

Tell me why you wanted to buy this place.

There were three reasons that stood out. First of all, the location.

I used to live 5-10 minutes away towards Hampstead,

so I know the area very well.

Also, within Swiss Cottage it's very close to the Jubilee Line and

less than five minutes walk to South Hampstead rail, so very convenient.

Second thing is, visiting the flat,

what I found is, the communal areas are quite presentable.

Often the risk with flats are you're sometimes at the mercy

of the freeholder.

But this seems to be well maintained,

so that obviously helps in terms of the appeal.

And finally, coming into the flat,

structurally it seems quite robust.

Obviously it needs to be completely cleaned and refurbished,

but there didn't seem to be any big structural issues,

so I could focus on the decoration side of things.

You're very structured in your thoughts, aren't you?

-Is this something you do, then?

-Yes. Although I've only started recently.

I started doing this last year.

Before that - which probably explains my thought process -

I trained as a chartered accountant

and then worked in the City for six years,

where I was analysing companies for stocks and shares and stuff.

So we had to be very methodical and spreadsheet driven.

So I think that helped.

# And he told us what he saw and it's easy to see

# It's going by the book. #

As you might expect of Arsalan, he checked everything out

about the flat, from the area to the potential end price,

hoping to leave nothing to chance.

And perhaps it's the City stockbroker in him

that ideally likes to sell on his properties ASAP.

Quick in, quick out. Buy, renovate, sell, move on.

So what's the plan for it?

Essentially, a complete refurbishment.

Starting with the bathroom.

I'm not sure if I'm going to strip out the bath tub

and just keep a shower unit.

The target is going to be professionals or young couples,

so maybe there is less demand for a tub and you can make it more modern with a shower unit.

Kitchen, completely new appliances, fully integrated.

New carpet, new flooring, do the walls.

The only semi-structural thing would be to take out the boiler and replace

it with a combi boiler to make more space and bring it up to date.

-What's the budget?

-It's probably going to be round about 25,000.

And the timescale?

Hopefully we'll start work in a couple of days

-and it should be about 3-4 weeks, I think.

-Right. So what's next?

After this there is another house I've been working on

which I'm trying to release up.

I've also started to think about outside London as well,

because I think London is very competitive.

I think outside London as well you don't have as many fixed entry

and exit costs like stamp duty, the big one. So there's more potential.

And if I do want to buy a property and hold it,

you get much better rental yields.

I'm also looking around London for other projects.

-You've taken to this like a duck to water.

-I don't know yet.

-Ask me in a month.

-No, the way you're talking - bang, bang, bang.

Congratulations. It's been fascinating talking to you.

-Thank you very much.

-Good luck.

-Thanks.

Well, Arsalan certainly seems to know what he's talking about

and his analytical approach can often work very well

when it comes to property investing.

How will he get on sorting the flat out?

Find out later in the show.

GULLS CRY

Phew! Well, after Arsalan's rapid-fire approach to his property,

it's time to slow things down.

The health benefits of a break beside the sea.

Fresh air, relaxation,

a bit of gentle exercise wandering these lovely beaches

means a visit to Westgate-On-Sea,

on the southern tip of England,

is just what the doctor ordered.

The property I'm here to see is literally a couple of minutes walk

from that lovely beach and a couple of minutes walk

from the town centre, which is just over there.

It's a three-bedroom ground and lower-ground floor maisonette

in this lovely looking old Victorian building.

The guide price, £60,000-£65,000.

I can't wait to see this one.

Many of Westgate's buildings were built during the Victorian era

as part of a development plan to attract middle-class people

to a seaside resort.

And nowadays there are many holiday homes here.

I always get a bit excited in the fresh air

and when I'm near the beach, but this place is huge!

There's an amazing lounge right there.

Cornicing, wonderful proportions, that beautiful bay window.

Loads of space.

And then you walk into a bit of a throwback from the late '60s, '70s.

Wow, look at the doors, the panelling here, the carpets!

But look down there. Loads and loads of space.

You can see this is split level. Fantastic ceiling height.

You've got a little loo there. The kitchen.

Round here into the sitting-room, which I'm sure you could

actually get rid of that partition wall and really open this space up.

Lovely!

Look at the old fire. Nice little brown rug laid out in front.

There's so much you could do with this property.

I'm really excited to have a look downstairs

and see the full potential.

It's an upside-down layout.

The kitchen, living area and cloakroom upstairs

and then downstairs to the bedrooms.

You'd want to keep all the great storage

but, as groovy as this carpet is, I think you'd want to replace it!

And so the groovy theme continues.

You'd need to do a lot of updating in this flat. But I love the space.

You've got a downstairs bathroom, fantastic huge utility room.

I mean, what a bonus to have that.

And it gets a little more depressing in here.

Straightaway you can see it's damp.

Everywhere you look.

The wallpaper literally is...

The plaster's all blown, so you need to get that sorted out.

It just feels dark, damp...

and dungeon-like.

# ..Where it's dark as a dungeon

# Damp as the dew... #

Well, the seaside feels like a very distant thought

in this lower ground floor, and the bad news is,

the bathroom down here is missing a vital component, in my opinion.

A toilet!

And while we're at it,

there's a second bedroom down here which is also a bit damp.

But, thankfully, it does have a bay window.

Then there's a bit of a mystery tour

when it comes to finding the third bedroom,

so I guess that means what I THOUGHT was the utility room,

well, is probably the third bedroom.

I suppose that could be fixed,

but there is another stumbling block,

which means I'm not going to be sending out

my wish-you-were-here postcard just yet.

There's always a but, isn't there?

And in this case, it's nothing to do with the flat itself.

It's to do with the length of the lease.

In this case, there are only 64 years remaining

on the current lease that comes with the flat.

Now, what that means is that mortgage lenders

might not be so keen to get involved with this one

and, in turn, makes it less attractive to potential buyers.

So, you'll have to speak to the freeholder of the building

to see about extending that lease,

and that could cost you a fair bit of money.

So, here's my tip. Read the legal pack and check it out.

I'm feeling slightly more cheered by the shared garden at the rear

and, of course, there's that guide price

of 60,000 to 65,000 to consider.

A local estate agent came along

to tell us a bit more about the market in Westgate-on-Sea.

I think, given the location of the property

and its proximity to the beach, I think it's going to appeal to...

a great deal of out-of-town buyers and a lot of out-of-town interest.

Therefore, they are going to be expecting

quite a nice finish on the property as well,

so I think something just above...

little bit above the standard sort of carpets and curtains,

I think, would do them very well.

The broadest market of potential buyers is what you want

if you intend to sell on.

So, what could that resale value be?

In my opinion, with the property done to a good standard,

I think the value should be between 120,000 and 125,000.

For a rental value of the property,

I would estimate to achieve between £600 and £625 per calendar month.

Well, it's a great property with bags of potential

right in the heart of Westgate-on-Sea.

It's a spacious maisonette flat in a desirable area,

just a stone's throw from that magnificent beach.

Sort that lease out and you could have a real winner here.

Let's see who spotted this great opportunity

when it went under the hammer.

Three-bedroom maisonette for improvement.

Where do you want to start me on that one? Start me...

£65,000, get me on the way.

Do you want to say 60,000?

Give me 55, then.

55, I've got. Can I say 60? £60,000, I've got.

62 now, if you like. 62.

65. 67.

67. At 68.

69. And 70.

And 1. 71.

72 in the second row. 73.

Is that 73? 73.

74. 74.

75.

No. At £74,000. 75, I've got.

76. 77.

At 77. 78. And 9.

79.

Yep? No?

£78,000, then, for the first time.

£78,000, for the second time.

79, I've got. And 80.

And 1. 81.

And 2. 82. And 3.

At £82,000, in the pink shirt, again, for the first time.

£82,000, for the second.

Third and final time at £82,000.

It's yours, sir. £82,000, on the telephone.

Actually, it's not his.

John was bidding on behalf of his friend Nathan.

# ..Someday, someday

# He's on the phone... #

Nathan was on the other end of the phone,

orchestrating the purchase of his first renovation project

for a respectable 82,000.

Nathan, who works in pharmaceutical sales, is raring to get going.

I caught up with him back at the property.

-Nathan, congratulations.

-Thank you very much.

So, here you are with your auction property,

a stone's throw from one of my favourite beaches.

-It's nice, isn't it? Nice spot.

-I love Westgate-on-Sea.

Yeah, it's nice. Up and coming.

Why do you think Westgate is going places?

Because we are literally up the road from Margate.

Yeah, and there's a fast train link coming in as well.

It keeps working its way further and further towards us,

so that will always help.

I think maybe someone from London might be interested in it.

So, are you thinking of this as a holiday home?

Probably not, no. I think probably a young family.

I think it's a big property.

I think if you are starting off,

three-bedroom terraced house is quite expensive.

This would be a nice way to get yourself a family home.

Did you view the property prior to the auction?

I did. I viewed this one, and one up the road, two months previous.

So, I only at the very last minute decided to view this property,

thinking that I'd already seen it before, and in actual fact,

it was two doors up.

-And was this one a better one?

-This one was better.

-Ooh, how lucky are you?

-Yeah, very lucky.

But not so lucky,

because there's a whole lot of damp going on downstairs.

It's great up here and you think, "Wow, views of the sea,"

and then it's very dingy, very dark, very damp.

Have you sort of had that checked out to any extent?

I haven't had it checked out to any extent.

What I do know about the property, it's been stood empty for two years.

-Yeah.

-It will be very cold, very damp.

As you can tell from the decor,

it's probably not had a lick of paint for 30 years.

At the very least, I need to strip it all back, see what the problem is,

and then get it replastered, so we'll set aside some money for that.

So, you're not worried it might be a lot worse than you think?

Because it's not just in that one downstairs room.

-There's quite a few areas downstairs.

-No, it's throughout.

We'll see where it goes. We need to have a really good look first.

-So, the big, bad no with this property is the lease.

-It is.

It was in the legal pack. Did you read about it in the legal pack?

I did. Yeah, so it's got 64 years.

I did a little bit of research beforehand.

I spoke to the next-door neighbour, and his lease is 67,

and he'd had a quote from the freeholder

-of £6,000 to get it extended.

-Right.

So, it'll be a little bit more for me,

because it's a little bit of a shorter lease,

but I've allowed for that.

Nathan has done his homework, which is spot-on,

and he's allowed seven grand for that lease extension.

There's good news,

in that the owner of the block has a management company,

which does entail paying £40 a month,

but it does mean that the exterior of the building

will get a spruce-up in due course.

And, meanwhile, he has a £20,000 budget

and a 12-week timescale to transform the inside.

It needs a new central heating system putting in,

it needs the old hot water tank taking out.

We're going to put in a shower room upstairs.

We are going to knock through the kitchen into the dining room.

Fabulous.

And, downstairs, I'm going to try and rejiggle the bathroom

so that we can get a toilet downstairs.

I think if we're going to attract a family,

it's got to have at least two toilets and at least two places to shower.

-I know you're a family man with three children.

-Yeah.

How are you going to cope? When are you going to get the time?

Well, I will be spending every weekend working on the property,

but I've got my cousin, Harry, who's coming over from Northern Ireland.

He's got a year off university

and he wants to get into property development,

so he's going to come and give me a hand for a couple of months.

Any chance you and your family might want to keep hold of it?

The kids are going to love this. It's so near the beach.

-No. No. I need the money.

-No?

I need the money.

-They can come in, but they can get out.

-It's an investment, yeah.

-Very firmly.

-Nathan, good luck. You've got a lot ahead of you.

But I can't wait to see the outcome when it's all finished.

-Well done.

-Thank you very much.

-Thank you.

Nathan has already got the ball rolling

by negotiating a deal with the freeholder

to get that lease extension,

but what about all that dingy downstairs damp?

Let's hope it's not going to eat too much into his budget,

because Nathan has got big plans for this place,

and cousin Harry is going to need his wages paying.

You can join me later on in the programme

to find out exactly what happens.

Coming up, in Crewe, we see what £61,000 could get you.

Big front area there,

then through to a really nice-sized rear living area.

And back in Kent, we catch up with Nathan

and his battle against the damp.

It was worse than I'd hoped.

It was in London NW6, in the area known as Swiss Cottage,

where we first saw a one-bedroomed flat

situated on the second floor of a rather elegant building.

The flat itself was lacking in style and character.

This was a prime location and, despite its small proportions,

it was sold at auction for £360,000

to former stockbroker turned property developer Arsalan

as it met the criteria he was looking for in a property.

-# Just follow

-Three steps to heaven

# Steps one, two and three... #

I think there are three reasons it stood out.

First of all, the location, so it's very convenient.

Second thing is, visiting the flat, what I found is,

the communal areas are quite presentable.

And then the final thing was coming into the flat as well.

Structurally, it seemed to be quite robust.

It needs to be completely cleaned up and refurbished,

but it didn't seem as if there was any big structural issues.

-You're very structured in your thoughts, aren't you?

-Yeah.

-# Just follow

-Three steps to heaven

# Steps one, two and three... #

Having bought the flat,

his next steps were to refurbish it to a high standard

on a budget of £20,000 to £25,000

and a timescale of three to four weeks, and then sell it on.

And now, five week later,

we're back with Arsalan to check on progress.

Well, that lounge is looking bigger and brighter.

And the kitchen's less shabby, more swish.

Bath or shower - that was the question.

Wow.

There may be no bath,

but the showers have certainly taken the flat up a step or two.

And the bedrooms are now looking crisp and clean,

so it looks like it's gone to plan.

In terms of the living room, the big change is,

we took the door out here to allow the light to flow through,

giving it more of that open-plan feel and the bigger sense of space.

Moving into the kitchen, I think what we really tried to do

is make sure it's a slightly higher standard in terms of the finish.

The colour scheme is something I put some thought into,

going for something beyond the sort of neutral type,

and something that will appeal to certain types of buyers as well.

And little touches, I think, like, if you look at the tap there,

a very modern and, I think, slightly higher-end tap

which, again, I think, adds that extra element of luxury to the flat.

Yes, as they say, the devil's in the detail,

but I'm wondering what the logic is in these changes in the bathroom.

When I thought about it,

I think the issue with the area and the type of flat

is I think most of the people who are buying this

aren't going to be families,

but rather either an individual or a couple and, given the area,

probably would lean towards having a shower rather than a bath tub.

I think he's possibly right.

With this being a one-bedroom flat on the second floor,

his target market is undoubtedly young professionals,

and the flat's whole look has been designed with that in mind.

In terms of the designing and the colour scheme,

that was really all from me.

I didn't do any of the physical work,

but I certainly designed everything,

so I decided on the colours, decided on the types of fixtures

and sourced all of those kind of external materials.

I like to keep a lot of control there

and, for me, that's part of the sort of fun and the job satisfaction.

So, Arsalan has been showing some creative flair

to go alongside his skills at getting the numbers to work.

I think the key thing has been...

My analytical approach has been on the budget side of things,

so I had my spreadsheet set up with the different costs

and I tried very rigorously to stick to it.

Where there were elements where I wanted to spend a bit more,

for example the worktops, some of the tiles,

obviously I monitored that

and saw where I could potentially make savings elsewhere.

So, I was very kind of...

very much, at the end of every day,

sort of logging the costs and keeping an eye on things.

I think that certainly helps to keep to budget.

A-ha, yes, that budget. £20,000 to £25,000.

How's that going?

# You can count on me Cos I can count on you... #

Altogether, it will be 23,000 I've spent.

I think last time, I was aiming for 20,

with a contingency of 5, so I think what pushed it up beyond my 20,

the solid stone worktops in the kitchen

and the additional tiling costs in the bathroom.

But, otherwise, I think most things were more or less on budget.

A £23,000 spend, on top of a £360,000 purchase price,

takes his total costs to £383,000,

without taxes and fees.

So, does that all add up to a good deal?

What did two local estate agents think?

I've had a look around the flat today, and it looks really nice.

The finish has been done to a very high standard.

The flooring's good, the design is good,

and the way the kitchen is put together

and the bathroom has been put together with the tiling,

really nicely done.

I've looked around the flat, and I think it's lovely, I really do.

The finishing's great.

Not only that, the location where this is and the high ceilings,

it's just... it's a fabulous property.

Arsalan is looking to sell the flat on,

but what kind of rental returns

could a buy-to-let investor get from this flat?

The rental value in the present market

would be £1,600 per calendar month,

possibly reaching to £1,700 per calendar month

if it's furnished to a good standard.

The property could rent for £1,650 per calendar month,

maybe £1,700 per calendar month.

The plan is to sell it.

That said, the rental figures are higher than I...

Because, obviously, I had two options.

But I'm definitely hopefully looking to sell it,

but it's always good to know that you've got the backup option.

And £1,600 per calendar month

would generate an annual yield of around 5%.

Arsalan's looking for a bigger return

by selling on this flat he's invested £383,000 into.

The price that I'd put on this flat

is in the region of £430,000 to £440,000.

But with the market being so positive

and potential of being a good marketplace as we stand,

today, it could be up to £450,000.

This flat could resell for £450,000.

That's a potential pre-tax profit of between 47,000 and 67,000.

So, what does he think of that?

I think it's more or less in line with what I expected.

I would probably push for the top end of the valuation.

I think in this market and given the finish we've got,

it's certainly worth pushing for that.

Well, whether he gets the top valuation or not,

it's still a great profit for just five weeks' work.

So, financially, this has been a worthwhile project,

but as another stepping stone

on his burgeoning property development career,

has it met Arsalan's criteria?

Certainly, I think, obviously, hopefully,

if things push through financially, it will work out.

In terms of what I've learnt, which is, I think,

the key thing when you're starting out in these things,

that's almost as important.

And the enjoyment factor's there, especially now it's coming together

and I'm quite pleased with the result,

so all in all, it's been a positive experience.

Positive indeed as, since we visited,

Arsalan has accepted an offer of 450,000.

Crewe has been a hub for transportation for many years.

A railway town, it's also home to the grand Crewe Hall,

a stunning Jacobean mansion built between 1615 and 1636.

Extensive restoration work was carried out in 1866

after a devastating fire.

Today, it stands strong and beautiful,

and I wait patiently for it to appear at auction on the programme!

Well, back to reality, and the kind of house

that most of us stand a half-decent chance of actually living in,

as opposed to a Jacobean mansion.

And, the good news is, it is on the good end of the street.

£50,000 was the guide price.

Two-bed, mid-terrace. Let's take a look.

So...

pretty reasonable, don't you think?

And when you walk through the door, yeah! This is looking great.

Really high ceilings.

It's been stripped out,

which is going to save you a lot of effort,

although it looks like things like pipework and electrics

will need to be done.

But big front area there,

and then through to a really nice-sized rear living area.

You've got the open fires.

And the thing about these Crewe houses is, they...

they were often built for slightly higher-end workers

and, as a result, they are substantial.

And look at this one.

It's really nice. Now, the kitchen is in that little bit there.

Well, I say kitchen.

HE CLEARS HIS THROAT

It's more like a large brick pizza oven at the moment!

You know, one of those things you have in, like, pizza restaurants.

Nothing in there. Er... So...

But, anyway, the thing is, somebody's gone to all the trouble

of getting rid of all the rubbish,

so it's actually a blank canvas... for YOU to paint on.

A blank canvas indeed, and with this sense of space,

there really is an opportunity to create your own little castello.

The kitchen area, clearly a later addition to the property,

is a bit on the small side, but with everything pulled out,

it does leave you with the option of moving things about.

As you walk round the house,

you just get this feeling of it just being so nicely proportioned.

I mean, it is only a two-bed,

and it almost feels like it could be so much more.

So, up here, large bathroom down that way.

Then your two bedrooms here. But look at this.

Stairs up to some kind of attic space.

Now, judging by these, I mean...

They are not building regulations-compliant, I'd guess.

You'd expect to see something like this on a boat, wouldn't you?!

So, therefore, I reckon you couldn't class that as a bedroom.

Well, it obviously hasn't been classed as a bedroom.

But it might be a useful storage space or maybe a little play area.

But let's explore

that aforementioned bathroom a bit more...

down this corridor, and what is interesting is this.

Stud partition wall, basically creating that bedroom there.

Unusual. I wonder what the original layout was.

My guess is that the bathroom was actually downstairs

and that little corridor has been created

to enable you to get to this area here,

which is where the bathroom could quite conceivably be.

Again, not a bad space.

Somebody's cleared it out for you, and at least...

oh, at least you won't have to spend too much money on light fittings,

because that one is perfect.

-HE COUGHS

-Just needs a bit of a dust.

# ..From these dusty skies... #

A house stripped bare, sure,

but waiting patiently to come back to life.

It's practically begging to be restored.

I think anywhere around the guide price of £50,000 is a bargain,

and that's even before we head outside.

Well, out the back, this little yard area,

and then a bit of a bonus.

Across this bit of land...

Now, one thing, before I move on away from this land.

You definitely want to find out from your solicitor who owns this

and who's responsible for its maintenance.

But across it, whoever does own it

and is responsible for its maintenance, is this, the garage.

You've got a garage, you've got this bit...

You know, it's just all adds

to what I think is already a really great little house.

Not just a great house.

A fantastic house, because beyond the shed is even more land.

A garden awaiting some green fingers.

£50,000-plus makes it a no-brainer for me,

but we asked a local property expert

to come along and give us his opinion.

Does he believe the layout of the house causes any issues?

I'd leave the layout as it is. It works pretty well.

So, new kitchen, new bathroom,

rewire, central heating system,

lots of reskimming and replastering ceilings

and you should be there with it then.

Sounds simple enough, although experience tells us

that this is never quite the case.

A lot to do. How much does he think it would cost?

I'd imagine the property would need in the region of 15,000 to 20,000.

It does depend on how much work the...

the new owner could do to the property themselves.

£20,000 seems realistic to me, but if sold for the guide price,

the total spend would reach, then, around 70,000.

In that case, once complete,

what kind of profit margin would we be looking at?

The property would be in the region of £85,000 to £90,000,

and the rental value

would be in the region of £495 to £550 per calendar month.

So, a potential £20,000 profit, or a 9% yield from renting.

Out of the two, which one would he recommend?

I think either way with this property.

It would rent very, very well. It's a really strong market for rental.

But in the other breath, it's also a really good market for sales,

and there is quite a decent profit margin in this property.

Well, in case you haven't guessed, I really, really like this property.

It feels good inside, you've got space outside,

and that guide price, well, what is there not to love?

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

What's this? 50 to start me?

45, then.

45 bid. Thank you. At £45,000.

50, can you say now?

£50,000. 55? I'll take 1 if it helps.

This lot surprisingly struggled to get going

and then, suddenly, things heated up at 55,000.

The bid's at £55,000, then. Are we all done? You coming on the phone?

56.

New bidder, 57.

58? 58.

59? 59.

60 on the phone. Against you in the room.

61 anywhere else?

New bidder, 61.

You're out. 61. The bid's in the room, at the back, at £61,000.

62 anywhere else?

If not, £61,000, for the first time.

£61,000, for the second time.

61, third and final time.

Your lot, sir, well done.

So, bought for £61,000, £11,000 over the guide price,

by Steve and Darren, in the blue top,

who have recently got together in a new business venture.

Steve came along to the house to tell me more.

-Steve, good to meet you.

-Good to meet you.

-Congratulations.

-Thank you.

Tell me why you wanted to buy this place.

It's a good size and I think it's got good potential,

especially if we can squeeze a third bedroom in, like we're hoping for.

-Good stuff. I mean, I think you got it at a good price, didn't you?

-61.

Yeah, were you surprised it didn't go higher?

I think, because somebody's already made a start,

it looked quite bad, so I think that put a lot of people off.

That's interesting, isn't it, because I think it's a bonus.

Yeah. It is for me, anyway. The dirty parts are done.

Tell me a bit about you. What do you do?

-I've got a small plastering firm...

-Oh!

..and do this kind of work for other people,

-so I thought it's about time I had a go for myself.

-Right.

-So, is this your first sort of investment property?

-Yes, yeah.

Wow, and there you are being a plasterer,

that skill that everybody needs, really.

A lot of people say that.

A lot of people do say that, because it's true.

It's a dark art, plastering a ceiling. I wish I could do it.

However, Steve isn't doing this alone.

He does have his business partner, Darren.

-Does he have sort of suitable or relevant skills?

-Yes.

-He runs a decorating firm.

-Oh!

-Quite a large decorating firm.

-Oh, right.

-That's all right, then.

-Yes!

-You can plaster it, he can paint it.

-That's the idea.

-Job done.

-Yeah, yeah.

So, what's the plans for the house, then?

Well, this area where we are now, there'll be a kitchen in here.

-Worktop base units across the back wall. Island in the middle.

-Oh, wow.

What used to be the kitchen at the back

will become a utility and downstairs toilet.

And then, upstairs,

what was the bathroom at the back will become the third bedroom.

Explain to me a bit more about the layout upstairs.

I'm trying to get my head round how you're going to do it.

You're going to start by taking out all the stud partitions?

I'll take the stairs out to start off with,

and then I want to take the brick wall out to the left of the stairs,

put a stud wall up a bit further over,

which will then make the bathroom

between that wall and the right-hand side of the stairs.

Enough to get a bath in there, or will it be a shower room?

-No, it will be bath.

-Right.

And then the two bedrooms, one will remain pretty much as it is.

The existing...what was the bathroom will be a bedroom,

-and then a slightly smaller third bedroom.

-Yeah.

Sounds like a good plan.

One of these ones you're not quite sure how it's going to work out

-until you actually do it.

-That's it, yeah!

Still, I think the plan is a good one,

especially with that third bedroom adding value to the property.

Even with Steve saving money on the plastering,

the initial budget for the boys is between 10,000 and 12,000 -

no small change.

What sort of timescale are they looking at?

-We're hoping to be done in five weeks.

-Five weeks?!

-Five weeks.

How many people?

-In total, there'll probably be about six, on and off.

-Ah, OK.

Well, Steve is injecting some serious pace into the project,

a tactic that has, indeed, floored many in the past,

but Steve seems confident and determined.

If successful, what plans do they have for the house?

-Quick sell or the rental market?

-It depends.

We'll advertise it for both and just pick up whichever comes first.

-Literally whichever comes first?

-Yeah.

-That right?

-Yeah.

So, have you got a clear idea of how much you'll rent it out for?

-I was hoping for about 430 per calendar month.

-Right.

-And how much would you sell it for?

-Er...

-I'd like 85 to 90.

-Right.

-So, a good profit, if you can manage to keep your costs down.

-Yeah.

Steve will be happy to know

that our property expert gave a similar valuation.

However, that was for a two-bedroomed house.

If Steve and Darren managed to squeeze a third bedroom in,

the potential return could be higher still.

Let's hope they can do it.

And the biggest challenge, you think?

-Squeezing that bathroom in.

-Right.

-Lots of jiggery-pokery, the stud partition walls and things.

-Yes.

-Without making rooms too small.

-Mm.

And the stairs up to the attic, I mean,

-they're not very safe anyway, are they?

-No, not the best, are they?

No! And then what next for you?

Be looking out for another one, as soon as this is towards completion.

-And then just keep on running on.

-Hopefully. That's the plan.

-Well, listen, congratulations. Good luck with it.

-Thank you.

-Look forward to seeing how you get on.

-Great.

So, moving the staircase... in fact, removing the staircase.

What do you think about that?

I think that's a great idea that Steve's come up with

to create that extra bedroom

without reducing the size of the existing bedrooms too much.

Radical changes up here, then, when we return...big question mark.

You can find out later in the show.

Well, time and tide wait for no-one,

so have our buyers lived up to their promises?

Has all the work been done? I think we should go back and find out.

Back now to the fantastic Kent coastline

and lovely Westgate-on-Sea

where, earlier, we met Nathan,

who was tackling this maisonette as his first project.

He bought it at auction for £82,000.

-Nathan, congratulations.

-Thank you very much.

So, here you are with your auction property,

a stone's throw from one of my favourite beaches.

-It's nice, isn't it? Nice spot.

-I love Westgate-on-Sea.

Yeah, it's nice. Up and coming.

But this seaside dwelling was less than shipshape,

with damp issues in the downstairs bedrooms

and, well, that wasn't the only problem.

-So, the big, bad "no" with this property is the lease.

-It is.

It was in the legal pack. Did you read about it in the legal pack?

I did. Yeah, so it's got 64 years.

I did a little bit of research beforehand.

I spoke to the next-door neighbour, and his lease is 67,

and he'd had a quote from the freeholder of £6,000 to get extended.

Right.

So, it'll be a little bit more for me,

because it's a little bit of a shorter lease,

but I've allowed for that.

Nathan had also planned on fixing the damp

and modernising the flat throughout,

and had given himself a timescale of 12 weeks.

Well, five months have now passed

and we are back to see how he's got on.

There's no sign of that damp or the '60s decor.

And even the wall between the kitchen and dining room

seemed to have vanished.

But what about the issue with the lease?

I was very confident from the start

that we would be able to sort the lease.

I spoke with the property management company

and they assured me that they would be able to sort it out very quickly,

and then it went to solicitors,

and things have just been dragging on from there,

so we just need to lean on the solicitors,

get things moving a bit quicker, and then we'll be there.

# Oh, please release me

# Let me go... #

Nathan really needs to get the lease on this property sorted.

As it stands, with only 64 years left on it,

potential buyers will really struggle to get a mortgage.

How did he get on with this damp problem?

It was worse than I'd hoped,

in that a couple of the obvious causes of damp,

a leaking downpipe is one example,

was not the only cause of the damp.

But we managed to find a lot of the sources.

There was a leaking hot water tank, a leaking waste pipe in the...

in the kitchen, and once we'd sorted those out, things started to dry out.

So, it certainly hasn't been plain sailing for Nathan,

but he has transformed this property by moving and removing walls.

The major change which I thought would add to the property

was the kitchen.

The kitchen was a very small room, like a little galley kitchen,

and I thought if I could open up the space,

you would get two windows in there,

it would be a very light, south-facing room,

and I think that'll be a real saleable point to the property,

and I think once you put a nice modern kitchen in there, I think...

They always say it's the kitchen and the bathroom that sell a property,

so I thought once I'd got the kitchen right,

then everything else should follow quite nicely.

Kitchens and bathrooms, indeed,

and speaking of bathrooms,

by reconfiguring the kitchen and dining room,

Nathan has managed to squeeze in this lovely shower room upstairs

and still keep the separate toilet.

And, downstairs, he took some of the under-stairs storage,

which enabled him to add a loo into the bathroom.

So, how has all this work affected his budget?

I originally budgeted £20,000 to complete the renovation.

I've spent 22,000, which sounds like I was fairly close,

so overall, I'm very pleased at where I've come in on budget,

and it's been a huge learning experience,

and I'll be a lot more accurate next time.

Ooh, so Nathan's thinking about another property already.

But how did he do with his timescale?

I originally planned that the job would take three months.

It took me five months,

and that was predominantly down to sorting out the damp downstairs.

You have to allow a lot of time for the damp to dry out,

to make sure that everything's ready to move onto the next stage.

Going over schedule has been tough on Nathan and his family.

In fact, he ended up getting decorators in

to help him finish sooner than he might have.

He bought this property for 82,000

and has spent £22,000 on the renovations.

We invited along two property experts to see what they think.

It's very spacious.

Having two receptions, two bathrooms,

gives it a really big advantage

in comparison to what else is on the market at the moment.

Yeah, the finish is good, it's neutral,

so people can come in and put their own mark on it as and when they want.

It's clean, it's bright and it's airy. It's ready to go.

Well, that's all very positive,

but what do they think Nathan could achieve

if he was to put this flat on the rental market?

I would expect this to achieve

in the region of £675 per calendar month.

And I'd estimate this would be anything

from 550 to 575 per calendar month.

Even that lowest estimate would give Nathan a yield of over 6%.

I think 550 is a very strong... strong return

and I would give that some serious thought.

So, will Nathan change his mind about selling this maisonette?

He had a total spend of 104,000.

What do our experts think it could achieve if it went up for sale?

I'd expect this property to sell for in the region of £145,000.

I'd be looking to put this property on the market at £135,000.

That would give Nathan a profit of between 31,000 and 41,000

before taxes and fees.

I think at the start of the project, I'd always hoped that I'd get 130,

so I think 140 to 145, I've got to be pleased with that.

I have already had an offer on the property at 150,

so I think I'll probably be selling.

So, despite problems with the damp and the lease,

Nathan has made a success of his first auction purchase.

Will he be doing it again?

I think I'll be allowed to start my next project

probably in about six months' time,

when I've reintroduced myself to the family.

Back now to Crewe

where, earlier, we met plasterer Steve.

Steve and his business partner Darren

bought this house at auction for £61,000.

-I think you got it at a good price, didn't you?

-61.

Yeah, were you surprised it didn't go higher?

I think, because somebody's already made a start,

it looked quite bad, so I think that put a lot of people off.

That's interesting, isn't it, because I think it's a bonus.

Yeah. It is for me, anyway. The dirty parts are done.

However, Steve had plans to change the upstairs layout

in order to add a third bedroom.

Sounds like a good plan.

One of these ones you're not quite sure how it's going to work out

-until you do it.

-That's it, yeah.

I love it when a plan comes together! So, has this one?

Seven weeks later, we're back to see how Steve got on.

And, as Steve promised, things certainly have moved.

# You gotta move

# Gotta move

# Gotta move

# Gotta move... #

Downstairs, it's the kitchen that's moved.

Upstairs, it's just about every wall.

By removing the stairs to the attic room and moving the bedroom wall,

Steve has been able to put the bathroom here.

This has left the old bathroom space at the back of the house free

to become the third bedroom.

But that has meant losing the use of the attic room.

Originally, we wanted to keep the loft as a room,

but when we got up there

and started taking floorboards up and having a look at it,

it wasn't done very good,

so we were best to just shut it off and use it as storage.

It's obvious a lot of effort has gone into this property.

As Steve is a plasterer

and his business partner runs a decorating firm,

they had planned to do most of the work themselves.

I started work here by myself at first,

getting everything ready, taking the walls down,

taking the stairs out, started putting some partition walls up,

running some cables then for the electrician,

the pipework for the plumbing,

and then the lad that works with me started on the plastering.

I assisted him with it.

Then when that was done, I went on to doing the woodwork,

hanging the doors, fitting skirting boards, architraves.

My business partner came over then to help me finish that off,

and we fitted the kitchen between us.

Then his lads did the decoration at the end of it.

Wow! So, is there anything they couldn't do themselves?

We've had an electrician in to fit a new consumer unit,

socket fronts, put some extra sockets in, new light fittings, fixtures.

And another great addition to this house

is the utility room and the downstairs toilet.

Originally, that was the kitchen,

which me and my partner both thought it was too small for a kitchen.

So, we put a partition wall up to divide the room in half,

one side utility

and the other side, we fitted toilet, sink and the boiler.

And it wasn't just the inside of the property that got a make over.

Out the back, we moved the shed, the kennels, got rid of all the rubbish,

taken the fence down, removing the posts to create off-road parking.

Off-road parking?

Yet another great addition,

and there's also the garage and garden out back.

But have they managed to do all this within their timescale?

We were hoping for five weeks, and it was a bit ambitious,

but that's what we were hoping for, and we did it in seven.

I think the seven-week timescale is amazing, given the work here.

How did the £10,000 to £12,000 budget go?

It was 12, the original budget was, which, again, a bit ambitious,

and it's come out at 13,500.

So, two weeks over their schedule and £1,500 over their budget.

What pushed them over?

I'd say the biggest expense has been the kitchen,

and the reason is because, such a big room, we wanted to fill it,

so we wanted to go for an island,

which meant we had to go for solid worktops, oversized,

so everything worked round the island, really, in the kitchen.

That's probably a sensible move, as kitchens do sell houses.

So, what are their plans for the property now?

Hopefully we can sell it, but if not then we will rent it.

Always good to keep your options open.

Steve and Darren bought this house for £61,000

and spent £13,500 on renovations.

We invited round two estate agents

to see what they think of the property now,

starting with the agent who saw it last time.

I think he has made good use of the space.

The attic didn't have any planning permission,

so something needed to be done,

and a bathroom has been put in place

where the staircase used to be for the loft room,

which I think is a good idea.

I think it's very, very nice indeed.

The owners have done a really good job

and it's very spacious, very light and airy, and very fashionable.

That all sounds positive,

so what do they think the property could achieve on the rental market?

Rental-wise, I think you would achieve

between £525 per calendar month to £550 per calendar month,

on the basis that there are three bedrooms

and it's a nice, spacious living accommodation.

Well, the owner would be looking at around 550 per calendar month.

That lowest figure would give Steve and Darren

a rather healthy return of over 8%.

That's what we were expecting, yeah. Yeah, that's good.

With an overall spend of 74,500,

what could this property achieve if it was put up for sale?

I think the owner would be looking to put this property on the market

for around £95,000 to 99,950.

If you ask £100,000, you should get an offer very near to that,

because all the work's been done to the property.

The expensive jobs, like the kitchen and bathroom,

have been done to a high standard.

People generally offer lower

if the property needs work doing to it still.

That lowest estimate of £95,000

would give Steve and Darren a potential profit of £20,500

before the usual taxes and fees,

so how does Steve feel

about his first venture into the property business?

I've enjoyed doing it and I'd definitely do it again, yeah.

I spoke to that many people, though,

that haven't done it and have regretted it,

so I thought, you know, I don't want to be one of those people.

Just give it a try.

Well, we hope you've enjoyed the tales of triumph and tribulation

on today's programme.

And we look forward to seeing you next time

for more Homes Under The Hammer.

-We'll see you, then.

-Bye.

-Bye.