Episode 34 Homes Under the Hammer

Hello and welcome to the show.

We both love dabbling in the world of property

and hope to snag a bargain along the way.

But in today's tougher markets, well, it's not always that easy.

But one way you can stack things in your favour

is by going to your local property auction.

Buying at auction is becoming increasingly popular.

And that is partly because there's no messing around -

when the hammer falls, you have exchanged contracts,

as long as you've got your 10% deposit.

So let's take a look at the three properties

that went under the hammer on today's show.

'In Streatham, London, is the grass always greener on the other side?'

I'm a little disappointed

that it's not one of the lovely period cottages

on the other side of the road.

'In Chatham, Kent, this terrace leaves me speechless.'

From the outside, "Hmm-hmm."

Once you get in, "Yeah..."

'In Merthyr Tydfil, something odd takes my fancy.'

Bit of quilting.

You know, I actually like that.

All these properties have been sold at auction.

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

when they went under the hammer.

Sold.

MUSIC: "London Calling" by The Clash

If you can't afford the property prices

in southwest London's super-trendy Clapham,

why not drive ten minutes down the road to Streatham?

It's an area on the up, with plenty of shops and restaurants

on one of the longest streets in Europe.

At the moment, it's still up to 20% cheaper than its pricey neighbour,

but that gap is closing quickly

as more and more people move here,

so with that in mind,

it may be an idea to buy sooner rather than later.

Along this residential street is the three-bedroom property

that I'm here to see.

It had a guide price of 235,000.

Here it is.

I'm a little disappointed

that it's not one of the lovely period cottages

on the other side of the road,

but let's not judge a book by its cover.

Time to take a look inside.

What these houses lack in character, they really make up for in space.

This is a very welcoming hallway.

Not quite sure about the colour scheme -

banoffee pie, yellow and caramel,

but that can all be changed.

Really nice-sized reception room there.

Obviously, it needs a lot of work. It's incredibly dated,

you've got polystyrene tiles everywhere.

Downstairs bathroom and the second reception room -

fantastic space.

You've got a little flat-roofed extension out here.

There is so much you could do with this property.

It really has got a lot going for it.

You could put the kitchen in this room,

a really nice family table out here.

The only thing that's disappointing me so far -

the downstairs bathroom.

MUSIC: "Mellow Yellow" by Donovan

OK, so the colour scheme needs to be taken into "custardy".

Ha! And it's not the prettiest of properties.

But this could be a diamond in the rough.

Time to head upstairs to see

if there's a solution to the downstairs bathroom.

Upstairs, there is still some dated decor,

but there are two good-sized bedrooms

and a single, perfect for a family.

Double glazing features throughout and central heating,

so it really is just the bathroom that's the issue for me.

And there is a toilet up here -

would there be room to turn that into a bathroom?

Hold that thought for a second, because in the great-sized garden...

Nice apple tree.

..there may be a solution.

I'm thinking that using permitted development rights

might allow for this house to be made bigger.

Now, I'd always caution you first

to take advice from planning before going ahead,

as rights can differ from place to place,

but there are general guidelines.

You could build a single-storey rear extension

of three metres in length and four metres in height,

or you could go bigger

and build a two-storey extension of three metres in length,

providing it was no higher than the existing house

and no less than seven metres from this garden boundary.

You would still need building regs,

but without having to apply for planning permission.

It would just make the extension quicker to build

as well as a little bit cheaper.

With all the options available to you with this property,

that guide price of 235,000

is looking even more attractive.

And the options don't stop there.

So we've looked out the back. Now it's time to look up.

Go on, have a look up there.

Are you thinking what I'm thinking?

Yes, you could also consider a loft conversion,

as long as the roof height can accommodate it, of course.

Now, there are a lot of options for this house,

but you really need to sit down, do your sums

and decide how far you should take this development.

MUSIC: "The Only Way Is Up" by Yazz

Now, I'm just pointing out some options here.

It's important not to overdevelop a property.

You don't want your budget to balloon.

What would a local property expert suggest doing with this house,

guided at 235,000?

I think the main key points to concentrate on

would be to relocate that downstairs bathroom upstairs.

It offers great potential, feasibly, to extend up into the loft

and I would certainly look to do

a full-width rear kitchen extension as well.

So knock down the existing extension and start again.

But what about creating a two-storey extension?

The option to create a two-storey extension

is not necessary.

A better option, I think, would be to extend up into the loft

to create a further, larger master en suite bedroom.

Food for thought.

Let's talk values, then.

Once renovated, this property would fetch in the region of £385,000.

If you extend up into the loft and do a full rear kitchen extension,

potential resale value would be in the region of £425,000-£435,000.

Wow! So potentially a big profit to be made here,

whichever option you go for.

Are the rental values just as good?

Once renovated, this property would fetch

in the region of £1,400-£1,500 per calendar month.

If you extended and went up into the loft,

rental potentials would be between £1,600-£1,700 per calendar month.

Well, it might not be a period property,

but I think this terrace, it'll make a really wise purchase for someone.

It's a solid house and it's oozing potential

with all those extensions and lay out options.

Let's see who agreed when we went to auction.

House in Streatham at 240, it's ridiculous.

240 with you. 240.

245?

245.

250.

250. 255.

260.

265.

270.

270.

275. 280.

With the guide price a distant memory,

we rejoin at 341,000.

Back to you, 341.

342.

If not, 341 first time.

Second time.

342, new spot.

343.

343?

344.

344. 345.

346.

347.

If not, 346 first time.

Second time.

Third and last time, if you're all done.

Sold, 346. Well done.

And the successful bidder

paying a whopping 111,000 over the guide price

was events organiser David.

I can't wait to find out why he really wanted this property.

-David, congratulations.

-Thank you very much.

-This is great news.

Yeah, I'm really excited. It's a bit of a big project for me,

-so I'm very nervous about it.

-Are you?!

I really hope I'm going to get it right.

Right, so let's start at the very beginning.

Well, the house is for me and my wife, Claire.

We just got married four and half months ago.

Oh, congratulations, amazing!

So this is your first marital home together?

Marital, yes.

We lived together in a flat before, but this is our first "home" home.

So how do you feel about the price you paid on auction day?

I'd set myself a limit the day before of 340.

That very morning, I upped it to 350,

just looking at how houses were going and I did my maths

and figured out this place was probably worth that

and I could afford that and I wanted it, I really wanted it.

As did David's wife, Claire, who has some useful skills.

Claire's an interior designer.

Perfect! Wow! So she's going to come in here and put her stamp on it.

Yeah, absolutely, but she has quite an expensive stamp.

Really? Hmm, does that bother you?

Well, I like to watch the pennies.

I don't want to overspend

and I think it's going to be one of our biggest battles.

She wants the nice stuff, I want the cheap stuff.

-You need to have the nice stuff.

-I want it to be nice,

but I don't think you have to pay as much as some people do pay

for nice things.

OK, let's talk about this house.

Let's start off with the downstairs bathroom.

I don't rate downstairs bathrooms.

It is where it is now, but I'm hoping to move it upstairs

and turn that maybe into a toilet,

because I think it is good to have a downstairs loo,

and a utility room.

So how are you going to get that bathroom upstairs?

I figured if I can turn the stairs at the top

a full 180 degrees,

and then knock down the toilet that's up there at the moment

and build it across the hallway,

so hopefully get a bath, toilet and sink in there,

and a door at the far end.

I think that could work.

-Oh, brilliant!

-So well done.

And what about all the further potential of this property?

Are you going to be extending or going out at all?

Right now, we're going to put our money into the loft,

because it's cheaper

and it's the money that we have.

We're going to put another staircase in that's going to turn round

above the current staircase,

step up into the loft,

and when I went up there,

I was amazed by how much space is actually there,

cos it looks tiny from the outside.

David, tell me how much your budget is.

We've got £30,000, including contingency funds.

So that's everything?

That's the lot, that's the rest of our money.

-That's going to be tight.

-Well, I'm going to do most of the work myself.

I'm very handy.

My parents brought me up living in houses

that were always under construction,

but, yeah, I think we're going to mainly do decorative work,

which I think is what most of the property needs.

Spend about £10,000, hopefully, doing the loft,

-which is very little.

-That's not a lot of money for a loft conversion.

Where have you got that quote from?

I'm hoping to do most of the work myself.

I've got an uncle who's a structural engineer who's going to help me

with the maths and all of that stuff

and I'm just going to try and keep prices down as much as I can.

Well, although he works as an event manager,

David is a qualified electrician, so that is bound to help.

This is definitely going to be a labour of love.

The couple have a three to four-month timescale

and plan to live here while they do the work.

It's going to be really exciting coming back and seeing

what you've done here and looking at Claire's designer finishing touches.

-Congratulations.

-Thank you, Lucy.

-Thank you.

Newly married and now they have a new house, so it's exciting times

for David and his wife Claire,

but will David manage to keep his budget under control?

You can join me later on in the show and we will find out

whether they do create that perfect family home here.

Chatham in Kent was home to author Charles Dickens as a child

for a period when his father, who was a clerk,

was said to work in the Navy pay office

and the lovely countryside of Kent

must have been in stark contrast with London

when he later travelled there.

Nowadays, if you're making your home here,

or bringing it with you, Chatham has become a favourite

with families and young professionals alike.

Well, I'm certainly arriving with great expectations.

The train station is literally down at the bottom of the hill there,

so fantastic commuter links if you want to go into London, etc.

The property itself, very attractive guide price - £75,000, two bedrooms.

Hmm, let's take a look.

So what have we got?

Well, that's a nice positive start -

a radiator.

Not exactly the ideal position,

but at least the place has got central heating, which is good news.

Front sitting room there. Hmm...

The reason I'm going, "Hmm,"

is because you've got this wall and it's kind of unnecessary,

because it makes it feel very cramped,

you've just got this corridor,

so probably one of the first things I'd do is get of this wall

and make it a bit more open-plan.

Some nice little touches, though.

I like this staircase, winding up as it does.

That looks like it's got some nice wood in there as well,

so strip that back.

And then, surprise, surprise,

towards the rear of the property here,

this really nice open-plan living area.

You've got this open fire here,

which would make this a really cosy area.

Obviously, at some stage,

somebody's built an extension on the back which now houses the kitchen.

Like the rest of the house, it needs some work.

But I think it could be really lovely,

so it's one of those properties

where it's a little bit disappointing

when you walk through the door

and as you basically travel into the property, it really comes up trumps.

So far, my great expectations have been met,

and I reckon a fairly Scrooge-like budget could sort it,

because upstairs, it isn't all that bad either.

A good-sized bathroom, two bedrooms of excellent proportions

and that wonderful staircase runs from top to bottom,

revealing a basement with huge potential.

In fact, this property is oozing potential,

and that includes the back garden.

I think there's definitely an opportunity to build

an extension perhaps here, possibly two storeys.

Fill in this gap, give you definitely much needed space

and it wouldn't necessarily detract that much from the garden,

because, bit of a mountain climb though it is,

it's a good space.

Not divided off from the next door's at the moment,

but if you got on with the neighbours,

it's actually quite nice that it's open-plan,

but if you were to put a fence in here,

still lots and lots and lots of room going that way.

And yeah,

it adds to a house which from the outside, "Hmm-hmm".

Once you get in, "Yeah, you know, thumbs up."

Thumbs up indeed.

Or are there some cracks appearing in my optimistic mood?

So it's all going quite well.

-HE CLEARS THROAT

-And then...

Back to the front living room here

and a really rather nasty crack in the front wall there.

How serious is it? I'll need to take a look outside.

Oh, dear. It looks like the whole of this front wall

is actually bowing out and there's a big crack there too.

So what's it going to take to sort that out?

Well, my fear is taking down the whole of the front there

and underpinning it.

That's the worse-case scenario,

but to me, that ain't looking good.

MUSIC: "Breakin' At The Cracks" by Colbie Caillat

Don't get me wrong,

I don't think it's a case of "bleak house" just yet,

but a structural engineer needs to take a look,

just so you know how much this might end up costing you.

But there is so much to like about this house,

I wouldn't give up on it.

A local estate agent came along to give her take on it.

This property is a fantastic size.

It's got two double bedrooms, nice, spacious bathroom as well.

The rear of the property has got the potential to extend.

You could do either a single storey to create a nice dining room,

or alternatively you could do a double-storey extension,

converting the property into a three-bedroom.

I am loving the agent's enthusiasm for the property's potential,

but extensions are not cheap.

If you are making an investment here,

then it's important to always keep in mind the costs of such a build

versus any future returns.

The property would rent for in the region of £625 per calendar month.

That might offer a decent return if you got it

anywhere near the guide price and kept the costs under control.

What if it was done up for the resale market?

In the current market,

if the property was to remain as a two-bedroom property,

I would say you could expect a value

anywhere between £120,000 and £130,000.

If you were to invest a bit more money into the property,

make it a family home,

and create the two-storey extension,

I would estimate you'd be looking at a resale value

of £130,000 to £140,000.

Well, apart from a few structural issues with this front wall here,

a good little property and certainly well located.

What the Dickens did it go for?

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

Stunning little house here.

Just right, start me where you will.

Can I see £80,000 for it, get us on the way at £80,000?

Give me 75, then.

70, start me... 70.

I've got that one first.

72.

And 5.

75.

And 7. 77.

At 80? At 80.

And 2.

82. 84.

84. 86.

86. 88.

At 90. And 2.

At £90,000, I have. Two more, anywhere?

If not, it will sell at £90,000

to the lady who's been there all the time for the first time.

£90,000 for the second time.

Third and fin... 92, just in time.

92. 93. One more.

You're so close.

93.

93?

You won't get other opportunities.

Look at the picture.

Or look at me, even.

No, look at the picture.

92,000, I've got. 93, I'm looking for.

If not, at £92,000, I've got.

Second time in the front row.

Third and final time, are we all done at £92,000?

Yours at 92, sir.

That nerve-racking final bid of £92,000 was made by Anthony,

who works for the NHS.

He came along with his eldest son, James,

to tell me what they had planned for this property.

-Anthony, James, great to meet you both.

-Hello.

-Congratulations.

-BOTH: Thank you.

Tell me why you wanted to buy this place.

Well, I wanted to buy a property

and this happened to be in the auction

and because I've been in so many auctions in the last two months,

I just decided I'd buy one.

I hadn't actually seen it.

You hadn't seen it? Oh, no!

You have no idea how crazy that is.

-I DO know exactly how crazy it is.

-Given that I'm risk-averse.

-You're risk-averse? But you spent how much, again?

-92.

On a house you hadn't seen.

He was kicking himself for a few days after it.

He was like, "Oh, why did I go and do and this?

"Why did I go and do this?"

-But, yeah, it turned out well.

-I love that, the fact you

state you're risk-averse. That's just brilliant.

So, you were looking to invest in property. What's the idea?

-What's the reason for doing this?

-Long-term, really. I have two boys.

It would be nice to leave them a property each.

-So, is this your house, then?

-Hopefully.

-Oh, great.

-And what do you think of it, then?

-Yeah, I actually really like it.

I think it has potential.

-It could be a really good property once renovated.

-For sure.

I'm just trying to imagine what it's like

when you open that door to a property that you spent

nearly 100 grand on and you'd never seen it, and you just

sort of open the door for the first time and it creaks a bit.

-I mean, how was it?

-Well, I didn't quite get to the opening the door.

-You didn't?

-Because before I opened the door I took a look at the side

and I saw a massive bow, first of all,

and then a massive crack and I'm thinking, "Done it this time."

HE CHUCKLES

We knew that we would find out

whether it was serious after we'd done the structural survey.

-Right.

-I couldn't call it at the time.

-And have you had a structural survey done now?

-Yes, yes, we have.

What did they say?

Well, they reckon that it's a historic move.

Having said that, I've been talking with the neighbours and I

understand next door have had theirs worsen over the last two years.

Oh, great(!)

What it suggested is that... Quite frankly, I thought subsidence,

but since it wasn't, that's a big bonus.

Well, a big "phew" that it doesn't appear to be

subsidence that's the problem.

But, worryingly, the neighbours think there may still be an issue.

Anthony might not be out of the woods on this one.

And, do I need to say it again?

Yep, the golden rules -

view the property, read the legal pack, do your homework.

This crack is one to keep an eye on but hopefully,

this investment for James is going to be fine.

-And how about you, James, are you...?

-I'm still in sixth form.

Still in sixth form? Fantastic.

So, starting the whole sort of property thing quite early on, then?

Yeah. Over the past year I've been interested more and more

in seeing my dad look for stuff.

I'm more and more looking to help him

and search for materials and stuff like that.

Property developers definitely seem to be getting younger.

James is planning to study economics at university.

That'll be handy for a future in property.

Talking of things financial...

So, what is the budget for the work?

Initially I thought...

-..8,000.

-Mm-hm.

I've just been told this morning that there is damp on a couple of walls

and the structural thing, so I think it's going to be about 20.

-OK, so it's gone from 8 to 20. Wow.

-Yeah. That's being realistic.

-Well, that's better to start, being realistic.

-Absolutely.

A lot of people aren't.

£20,000 does sound realistic.

But surely James can save his old man some labour costs?

James is...

MARTIN LAUGHS

..with some of the things, yeah.

-Does he know yet?

-Now he does!

I found out last week that my brother and I

are going to be doing the garden

and, judging by just being out there,

it's going to be a difficult task so, yeah,

hopefully that goes well.

James and his brother Alex have a task ahead of them.

And just knowing what brothers are like...

My brother's probably going to supervise.

ANTHONY LAUGHS

And that's the younger brother!

So, I'm not pretty sure yet that I'm absolutely decided.

-Listen, congratulations. Good luck with it.

-Thank you.

-I'm looking forward to seeing how you get on.

-Thank you very much.

So, a risk-averse Anthony

taking some pretty big risks buying this place.

Hopefully that wall at the front won't prove to be

too much of a problem.

And with the help of James and his brother, they will get it sorted.

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

'Coming up - a minor inconvenience in Wales.'

And you've got to come down two flights of stairs

to actually go to the loo.

'And a rather more major one in Chatham.'

The initial person I got off the street let me down,

the electrician, who took my money and ran away.

Back now to the South London borough of Streatham,

where earlier I viewed a three-bed terrace on a street of two halves.

I am a little disappointed that it's not one of

the lovely period cottages on the other side of the road,

but let's not judge a book by its cover.

What these houses lack in character they really make up for in space.

However, it did have one of my pet hates...

Downstairs bathroom!

With a guide price of £235,000 at auction,

the property was bought for a whopping 111,000

over the guide price by events manager David and his wife Claire.

I'm really excited.

It's a bit of a big project for me so I'm very nervous about it.

-Are you?

-Yeah, I really hope I'm going to get it right.

In order to get it right, he does have one thing in his favour...

-Claire's an interior designer.

-Perfect! Wow!

So, she's going to come in here and put her stamp on it.

-Yeah, absolutely, but she has quite an expensive stamp.

-Really?

David does have some idea of what needs to be done.

I don't rate downstairs bathrooms.

I'm hoping to move it upstairs and turn that, maybe, into a toilet,

because I think it is good to have downstairs loo.

David and Claire had what I thought was a rather tight budget of 30,000

which included a loft conversion,

and they hoped to have it done in three to four months

whilst living there.

Six months later, we're back to find out

if Claire's keen and expensive eye has been hard at work.

Wow, no more banoffee pie decor, I'm pleased to say.

But what I'm looking at is very sweet indeed.

So, how are Claire and David feeling?

Exhausted. A bit relieved.

I'm really happy with the end result.

I'm delighted to have finally finished the house.

This is an amazing transformation, and very, very tasteful.

Well done, Claire, and her design scheme.

And David was obviously hard at work

as there appeared to be quite a few walls missing.

When we came to knocking down the walls,

I realised how much space there was and so I phoned Claire quickly

when she was at work and said,

"Claire, could I knock down another wall?"

And she said, "Wait till I get home!"

But, yeah, we ended up taking another wall down,

which opened up the whole of the kitchen area.

We still have a downstairs WC but now it's just one small WC.

We moved the utilities under the stairs.

As an interior designer,

did Claire hold the upper hand in this restructuring of the space?

A lot of the design elements we actually did together

in terms of putting the bathroom in upstairs.

We kind of worked out the ideas together.

So, this is our upstairs bathroom.

When we bought the house the stairs came straight up

and then stopped just in the middle of where our bathroom is now,

and then you'd just walk around,

and there was a kind of little, funny, tiny loo just here.

But it wasn't very satisfactory

and it seemed to be a lot of waste of space.

To have the bathroom here and to have the turn,

we moved the stairs back a bit,

and that gave us loads of room downstairs to be able to move

the staircase back and fit the bathroom and upstairs.

# Upstairs room

# Is cool and bright... #

We were going to do the loft but in the end we couldn't, really,

because that's where we had to put all our stuff.

And also, from a time point of view.

I mean, we're glad to finish.

This is our first ever project

and we didn't really want it to drag on for a couple of years.

# Upstairs room

# Upstairs room... #

I think David and Claire have done an amazing job,

particularly with the kitchen and moving the bathroom upstairs.

But there was always the garden to be tackled.

There's quite a lot out here.

But it's turned out really good. I'm really happy with it.

Lovely bird bath, but unfortunately,

right slap bang in the middle of the garden,

so the worst possible place for it.

And also, a monstrosity of a shed -

blocked all the light from the windows

into the bathroom that's now turned into the dining area.

After we'd decked this area, we just bought some turf

and put a new lawn down which I think just transforms it.

It's now, for me, a really nice place to hang out.

# It took a whole lot of doing

# But we did it

# Yes, we did, girl

# Oh

# Lots of doing

# But we did it

# Yes, we did, girl... #

They've gone over their timescale by a couple of months,

but working full-time means they've not done badly at all.

David said he was going to do the work himself

so he wasn't worried about his 30-grand budget, but I am.

How much have they spent?

We've probably hit 30k...well, probably like 25, actually.

When you get to the end of the project and you're tired

and you've got actual work that you have to do to earn a living,

then you tend to get builders in and that's another cost.

So I think, probably the last month and a half of the project

was the most costly of it.

We probably spent about a third of our budget in that time.

This is a lovely home

and this renovation was never about making a profit.

I'm sure they would like to hear

some professional opinions on their work.

We asked two local estate agents to give us their thoughts.

First, the agent who saw the house in its original state.

My first impression of this property is they've done a really good job.

They've given it a really contemporary feel,

good-sized rooms offering practical living space

throughout the entire property.

Two reception rooms, good-sized kitchen with breakfast table,

lovely doors leading out onto a nice decked garden,

and it's a good family property. Yeah, just a good property.

The first impressions of the property are really, really good.

It's lovely, bright and airy

and the property really opens up towards the back.

The kitchen area going into that sort of dining area,

through to the garden is a real selling point.

It's a lovely open space

and lots of light comes through those back doors.

I think the people that have refurbished this property have done a great job.

It looks fantastic,

perfect for what people are looking for in this market.

Positive thoughts. How could it be otherwise? They've done a great job.

This is Claire and David's home,

but it's an investment in the future, too.

And they did buy it for 346,000, well over the guide price.

Still, they've been sensible with that spend of 25,000,

so their total investment is 371,000.

What could it sell for?

I'd value this property at £535,000.

We would put it onto the market for £525,000

looking to achieve offers around the £500,000 mark.

Outrageous! That's brilliant. No, that's fantastic.

Good, that's what we hoped it would be.

Outrageously good, David.

Those figures would give a profit,

before the usual taxes and expenses,

of between 124,000 to 159,000.

So, would David and Claire be tempted

to return to the auction room soon?

I'd definitely do it again

and I think auctions are a really good way to get a good deal.

And do they feel they've got a good deal?

Yes, it was definitely worth it.

-We're really happy with what we've done.

-Yeah, definitely.

I'm really proud of what Claire's done and all the work that she's done,

everything she's been through.

I'm really proud of Dave.

Dave really tested his DIY skills to the limit.

Oh, shucks!

This is the village of Troed-y-rhiw in South Wales.

The literal translation of Troed-y-rhiw is "foot of the hill"

and that's certainly fitting for our location here.

Three and a half miles outside Merthyr Tydfil,

45 minutes from Cardiff,

and I'm here to see a house very typical of this former mining town.

This three-bed mid-terrace had a guide price at auction of £32,000

and, although it looks like a standard two-storey terrace at the front,

at the rear you can see it is actually three storeys in height.

# Lifted, lifted, lifted, lifted...#

In out of the wet... and straight into the entrance hall.

A nice few features there. And then through into the sitting room area.

Lovely fireplace(!)

Nice bit of quilting.

You know, I actually like that. Very, very... Well, I don't know.

What do you reckon? 1920s? 1930s, maybe?

But it's probably going to go, to be honest.

And something else which you need to have go is the damp -

underneath the bay window here,

all in here, is in a right old state.

My guess is the classic thing has happened -

the flashing above here or whatever's on top of here

has failed at some point,

it's got into here, created a real damp problem.

As usual, the problem is what's that done to the floor joists?

You need to dig down there and find that out.

But it's a nice room and lots of light coming in. Let's carry on.

Also on this floor, there's another reception room at the back,

again a bit dated in terms of decor.

You could possibly think about knocking these two rooms through

to make a large, modern living space.

Then it's down a flight of stairs to the lower ground floor.

So, downstairs and it...

It makes sense for the Welsh valleys to have

a house on levels like this, given the topography of the land here.

But it still feels a bit strange.

I've come down the stairs from those two reception rooms

into this area here, another sort of living area.

You've got, basically, a loo over that way

and then through here to your kitchen.

And off the kitchen is the only bathroom.

Now, clearly that, as a lay out, is fairly rubbish

because imagine you're in bed at night on the top floor

and you've got to come down two flights of stairs

to actually go to the loo.

It's not ideal.

I mean, it is fairly typical for this area, but still,

I'd want to see if I could do something about it -

maybe shift the bathroom up onto the top floor.

The good news, though, is nice views out of the windows here

and access to the garden. So, it's OK.

Just, like I said, takes a bit of getting used to.

The back garden is a decent size and the good news is

there's rear vehicle access to a garage at the back.

So, now up to the top floor.

So, is the thorny issue of the bathroom and loo

being in such an inconvenient place resolvable?

Well, up on the top floor here, three bedrooms.

They're all good sizes and nice views out to the valleys as well.

But look at this, on the landing here.

A bit of completely wasted space.

So I'm wondering if this, which I think is not a supporting wall,

take that out, move that wall that way slightly,

and maybe create a bathroom, certainly a loo, here.

It would steal a bit of space from that room but I think

it would be worth it to solve one of the major issues of this property.

But it all comes down to balancing the budget.

Is it really worth rejigging the lay out here?

With a guide price of £32,000, would you get your money back?

Time to ask a local estate agent for her point of view.

I would put the kitchen downstairs

and maybe have it as a kitchen dining area.

Put the toilet back into where the bathroom is so that you can

open the whole of the back

of the house out,

and then I'd put, to add value to the property,

a toilet into one of the bedrooms,

but keeping the bedroom, just putting it on like an en suite toilet.

So, what about the rental values once the property is renovated?

This house would rent very easily as there's a high demand

for rental properties in this area, particularly for three bedrooms.

You'd get for this particular house

about £480 to £500 per calendar month.

And if all the recommended refurbishment work was completed,

what would be the resale value?

We would put this house on the market in the region of about

£98,000 and would look to expect to get about £95,000 or £94,000.

Well, it's certainly a lot of property for the money,

especially at that guide price.

But the lay out is far from ideal.

Bedrooms on the top, loo and bathroom on the bottom,

just doesn't work.

Still, an interesting one to go for.

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

Ladies and gents, I'm going to put this straight in

at the reserve with my proxy bid at 35.

35, I'm bid. I'm in the market. Do I seek any advance on 35?

36, thank you. Proxy bid's 37.

8. Thank you. 9. 40. 41.

My proxy bid's 41,000.

42, thank you. 42,000. My proxy's out.

Any advance on 42,000? 43, thank you. 44.

44, and 5.

45, and 6.

I've got 46,000.

47, are you sure?

47, thank you. 47, looking for 48 off you, madam.

Any advance? Be quick, 47,000 I'm bid.

Last chance...

47,000 to you, madam. £47,000.

That final bid of £47,000 was made by Cardiff-based Wendy.

But Wendy was actually at the auction

bidding on behalf of somebody else - her son, Tom.

# If there's somebody else you should let me know

# If there's somebody else better let him go... #

'And it was Tom I met back at the property.'

Tom, great to meet you.

-And you.

-Congratulations.

-Thank you very much.

-Tell me why you wanted to buy this house.

-Well, it's a nice house.

Three-storey, as you can see, a nice area.

I know a few people from the local area.

One guy, who's actually helping me restore the property,

-is from the next valley along.

-Oh, great.

And it just seemed like a good place

to start my property development career, as it were.

So this is number one?

-This is number one, yeah.

-Is it?

-Yeah.

What have you done up until now?

Well, the last few years

I've been working abroad on super-yachts, just crewing.

Crewing a super-yacht?

Yeah, in the Mediterranean and in the Caribbean and South America.

-What's a super-yacht?

-Just a privately owned motor yacht.

A big thing, the sort of thing that Russian billionaires own?

The kind of thing that Abramovich has and stuff like that.

-And what did you do on it?

-Just crewing, driving a bit.

You know, just going around and cleaning the boat is the main job.

And you get to swan about in the Caribbean and nice places?

Yeah, well, wherever the guests or owner want to go, you go there.

It begs the question, why on earth have you stopped doing that?

Because I turned 25 this year

and I thought, after three years of doing it,

I want to come home and be based somewhere

and try and get into property.

So, I decided to do it and here I am.

# So hoist up the John B's sail

# See how the mainsail sets... #

Sailing the seas may sound like a very nice way to earn a living

but Tom has come back to some harsh economic realities.

When he returned home,

he resumed his previous career as an estate agent,

but was then made redundant.

So no-one knows better than him the difficulties of the property market.

What he doesn't know much about

is the practical side of renovation,

so he's enlisted the help of his friend Darryl.

He's helping me with his brother,

-and he's done five properties already in the local area.

-Right.

His brother is a professional builder as well, so it's very convenient.

I can learn a lot from them both.

Is that the idea? You are going to be hands-on, are you?

Yeah, very hands-on.

There'll be times when I'm taking my sleeping bag and sleeping here.

-Great!

-Just so I can get up earlier and carry on.

-Are you looking forward to it?

-Very much so.

It's exciting. A bit daunting, but exciting.

What are your plans for it?

Well, we were originally going to do an attic conversion,

but we've decided that's just going to be too much money.

It's just too much effort, really.

-Where we're standing now is going to be the kitchen.

-Right.

The original kitchen through there,

we're going to put a shower room in with an extra toilet

so there are two toilets,

and keep the bathroom with a new bathroom in it.

-Knock through the walls on the first level.

-Oh, OK.

So it's a big living room,

then keep the bedrooms as they are, just redecorate.

Maybe move a bit around.

What about the fact that you'd have to travel down two flights of stairs

to get to the loo if you're in the bedrooms?

The thing is, most houses in this area are like that.

That's why we were originally going to put an attic conversion in,

but people are used to it around here.

People don't mind doing it.

Well, I'm not convinced about having two loos in the basement

and none on the top floor. It might not be unusual around here,

but I reckon in a fairly difficult market you have to make

the house as attractive to buyers as possible.

But given Tom has a maximum of £20,000 to spend,

I can see that he wants to be careful on his first project.

He's hoping to make a £25,000 profit.

What about outside?

Outside, we don't know what we're going to do outside.

We're thinking to put a little conservatory on the back

so we can have the kitchen opened up into the conservatory.

Of course, spruce the garage up at the back a bit.

Do a bit of gardening, make it nice and tidy.

And it would appear now that Tom has left the seafaring behind,

he really is ready to roll.

So does that mean more properties like this in the future?

Yes, most definitely.

Hopefully I'll get about three or four on the go to start off with

each year, cos I'm giving myself a six-week timeline here.

-Oh, wow.

-Yes.

Quite a short amount of time for quite a bit of work,

but, as I say, I'll be staying up here in a sleeping bag,

curled up in a corner.

-Hopefully things will go well.

-Congratulations, good luck with it.

-Thank you very much.

-We look forward to seeing how you get on.

-Thank you.

Well, from super yachts in the Caribbean

to rainy days property developing in the Welsh Valleys.

Tom certainly seems to have some good advisors. How will he get on?

Will his project end up all at sea?

You can find out a little later in the show.

Well, it's been a while now since we last saw those properties.

There should have been some work done,

-but, Martin, as you know, it's not always the case.

-Nope.

There's only one way to find out, let's go back and see.

Back to Chatham in Kent now where we met Anthony who,

having been thwarted at several auctions,

finally bought this three-bedroomed house for 92,000.

He and his eldest son, James, came along to tell me

about their plans, and also how they'd broken a Hammer golden rule.

I wanted to buy a property, and this happened to be in the auction.

Because I'd been in so many auctions in the last two months,

-I just decided I'll buy one. I hadn't actually seen it.

-You hadn't seen it?

Oh, no.

You have no idea how crazy that is.

-I do know exactly how crazy it is.

-Given that I'm risk-averse.

Perhaps a revision of the meaning of the phrase

might be required, Anthony.

But let's face it, despite Lucy and I going on about it,

Anthony is not the first and he won't, unfortunately,

be the last to take a chance and buy blind.

But his reason for the purchase was admirable -

Anthony was investing in property for his two sons.

-What do you think of it then?

-I actually really like it.

I think it has potential.

It could be like a really good property once renovated.

Spot-on, James. This is a really good house.

The only worry was that rather large crack

down the side of the door.

But Anthony's structural engineer had assured him it was historical.

Anthony had a realistic budget of £20,000 to renovate this house

and deal with the damp, the crack and anything else unforeseen

that might come to light, or was a danger.

Four months later, we're back to find out

if risk-averse Anthony's gamble with his £92,000 has paid off.

MUSIC: "The Gambler" by Kenny Rogers

# You got to know when to hold 'em

# Know when to fold 'em

# Know when to walk away

# And know when to run

# You never count your money

# When you're sitting at the table

# There'll be time enough for counting

# When the dealing's done. #

The work that has been done...

If you start from the outside, the door's been replaced,

the windows have been double glazed.

The wall that was,

the structural engineer said was peeling off has been pinned.

All the ceilings have come down and have been replaced.

The plaster on the wall, all of the walls were

so crumbly that they had to be hacked off and replastered as well.

New floors, new kitchen, new bathroom. New rewiring.

The boiler has been moved from the room upstairs

to the kitchen down here.

Now we're just waiting for the finish.

It's been a long, long time

since anyone has shown any care for this property,

so what Anthony has achieved in just four months is fantastic.

Working for the NHS meant that Anthony was only able

to give the project his full attention at the weekends.

This meant getting in the professionals,

but that didn't start very well.

Most of the work we had done by people whose trade it is.

I was mainly a labourer and project manager combined in one.

But I had people, mainly referrals,

especially after the initial person I got off the street let me down -

the electrician who took my money and ran away.

That sounds like rotten luck.

Anthony did the right thing latterly in getting

recommendations for his tradespeople.

Another Hammer golden rule is never pay all upfront.

Reputable tradespeople will not ask you for huge sums of money.

If your builder does, think twice.

Luckily, Anthony finally did get the right men for the job.

I had plasterers referred to me...

..and an electrician from a friend I know that they've worked for.

Who are the other tradesmen?

The carpenter, we go to the same church and I know him.

He's done brilliant work in the property.

He's worked both as a carpenter and part project manager as well.

One of the rooms that needed the most attention was the bathroom,

and Anthony is more than pleased with the results.

We've had everything ripped up and replaced. New suites, new tiling.

One that makes me really happy,

that I wanted to do a proper job in this house,

because that was something that seemed like a pillar

or chimney stack that was boxed in here.

When I took out the boxing, there was no support for the bricks,

so it could have come down any time.

Given that the kitchen is below and there's the hallway gap

there as well in the flooring, it could have been dangerous.

Yeah, it's come up quite nicely.

There's a few things to do yet, but it's nearly there.

Anthony's sons, James and Alex,

are lined up to do the garden renovations,

but it seems they still have some work ahead of them.

Delays and the initial difficulties in finding reliable tradespeople

has meant Anthony's budget has taken a hit.

He has spent £28,000 so far rather that 20.

That takes his total investment to £120,000.

We asked two estate agents to come along and see Anthony's handiwork.

Coming back to the property for the second time, the changes that have

been made are really suitable for either the sales or rental market.

Property's been finished to a good standard.

It's all about the finish.

Nobody sees how it's done until it's finished.

That's what everybody looks at.

The bathroom looks nearly finished

and it looks like it's been done really well.

Hopefully everything else will be done in the same standard.

To put the property on the market for sale,

I would recommend an asking price of £140,000.

I'd market it at £135,000,

but I'd look to achieve anything over the £130,000.

I think they are the professionals and they know the market,

but the house is not for sale anyway.

That's a potential profit of between £10,000 and £20,000.

Anthony's always wanted a house as an investment for his children,

but even that plan may have changed a little.

Having come to Chatham, seen the area, seen Kent, I quite like it.

We'd like to live here.

That's reflected in how, in my approaching it

and doing the place up, but the jury's still out...

..for my wife and kids.

After the experience, is there any wisdom

he would like to pass on to others heading to the auction?

It goes without saying, see the property.

Be realistic in what you want to do with the property before you start.

Wise words, Anthony. Wise words indeed.

When Tom returned to his home in Troed-y-rhiw

after spending three years on the world's oceans,

he arrived back to harsh economic times.

But Tom had ambition to be a property developer.

His first project -

this three-bed mid-terrace house bought for £47,000 at auction.

But why this house in particular?

Well, it's a nice house. Three-storey, as you can see.

Nice area. I know a few people from the local area.

One guy who is actually helping me

restore the property is from the next valley along.

Oh, great.

It just seemed like a good place to start my property development career,

-as it were.

-So this is number one in your...?

-This is number one.

-Oh, is it?

-Are you looking forward to it?

-Very much so. It's exciting.

A bit daunting, but exciting.

Daunting and exciting? There's no doubt about that.

I had to admire Tom's courage.

There was a lot of house here for a first attempt.

He had a £20,000 budget and so had to be careful.

Nonetheless, I was a bit concerned that his plan to keep the bathroom

downstairs might make the house less likely to sell in a tricky market.

What about the fact that you have to travel two flights of stairs

to get down to the loo if you're in the bedrooms.

The thing is, most houses in this area are like that,

so people are used to it around here.

People don't mind doing it.

I'm all for not getting in above your head on a first development,

so maybe Tom was right to be cautious.

He was already pushing it with a six-week timescale.

Over a year and a half later, we're back.

MUSIC: "You're The First, The Last, My Everything" by Barry White

After buying it, we completely gutted it from top to bottom,

brought it back to its original brick,

got rid of all the rubble and then started rebuilding.

Then we had to structurise it by putting three lintels in,

and we dug down in the basement

so that it went down to put insulation in.

Everything, really. It was just a complete rebuild.

A lot of hard work.

That is a bit of an understatement, Tom.

Apart from a few details, like doors yet to be hung,

the house interior is unrecognisable from before, an absolute triumph.

Well, in this room there used to be two rooms here and a corridor.

I just made it completely open-plan.

Everyone likes open-plan nowadays, so I thought, "Open-plan it."

A good decision and very well executed.

The lower level clearly received the same amount of attention.

The lay out downstairs was originally three rooms -

a bathroom, a kitchen and a living room.

I've made that completely open-plan as well

with a brand-new kitchen, new tiled floor,

and also French doors to the rear.

I also put a bathroom with a bath and a toilet

and shower room downstairs as well.

So there is a bathroom in the basement,

but did Tom listen to my thoughts about having a loo upstairs?

I managed to steal a little bit of space from the bedrooms upstairs

and put a shower room and a toilet.

Those who need to trot off to the loo in the middle of the night,

rejoice.

I don't think Tom will regret that decision at all.

It makes the house much more attractive to buyers.

Tom, a former sailor, has definitely been on a voyage of discovery.

It's actually incredible how many building regulations there are.

You start doing one thing and then the building inspector comes in

and tells you, you have to do it this way.

It was a bit of a challenge to get everything sorted properly.

Planning and building regulations are often the things

that catch out even the most experienced developers.

So Lucy and I would always urge you to do your homework

cos, if you don't, it could cost you time.

My initial timescale for the property was six weeks.

It's taken about a year and a half now,

mainly because we did not realise

we were going to completely gut the property and rebuild.

Also, we've been taking it slow

so that the chap who has been working with me can teach me

what I need to know about the building trade,

and also we've had some family problems as well.

You can never predict what life will throw at you,

and that is quite an overrun,

but it also served as a learning curve for Tom,

so it's not time wasted. However, time costs money.

I'm scared. Let's talk budget.

My budget originally was £20,000.

But as we completely gutted the property and rebuilt it...

we did go quite over that.

I think we went to about 75, so we did go quite far over,

but I'm confident that we can still earn a profit.

£75,000. That's £55,000 over the initial budget.

Remember, the estate agents' top value for the property was 98,000.

Again, Tom has achieved an awful lot here,

the quality is there to be seen.

However, the overspend brings the total expenditure to £122,000.

Tom is still optimistic, but I'm worried.

We asked two local agents to come along and have a look.

How much value has Tom added to the property,

and is it enough to turn a profit?

First, the agent who saw the house before Tom started work.

What they've done to this property is absolutely spectacular.

The fact they've put in a toilet and a shower on the top floor

has greatly added to the value of the property.

They've absolutely done everything - hacked off all the walls,

new kitchen, new bathrooms.

Everything is absolutely perfect.

Selling features of the property would be the overall size

and square footage of the property.

The fact that they've got the bathroom on the lower ground floor

and the toilet on the first floor.

The agents reckon the property would rent for £500 per calendar month,

which would give Tom a yield of 5%.

But what about resale given his spend of £122,000?

I would market the property at £110,000,

and we would expect to achieve between £95,000 and £100,000.

If the owners were going to market this property,

I would be looking at putting the property on

between £110,000 and £115,000.

I think Tom's first attempt to wrestle with the often

treacherous world of property development will have left him

with experiences that will benefit him for years to come.

However, a potential £7,000 loss is not what we were hoping to hear.

How does Tom feel about it?

I'm very happy with the valuation.

It's interesting to see the differential between who says what.

I think when I do put it up, I'll put it on for about 115.

Well, I'm going to keep my fingers crossed for Tom.

After his sheer determination and hard work,

he deserves to do well,

and he's certainly keeping that positive outlook.

There's still a few little bits and bobs to do,

but now it's coming to an end I'm very pleased with the way

the house has turned out, the way it looks.

I'm just very pleased with it in general, really.

So there you go, more plucky buyers experiencing the highs

and lows of buying at auction.

Join us next time for more auction action on Homes Under The Hammer.

-We will see you then.

-Goodbye.

-Goodbye.