Episode 37 Homes Under the Hammer

Hello. Now, there are literally hundreds of property auctions

held all over the UK.

Yes, it is a thriving business

with billions of pounds worth of property

being sold every year.

And if you want to find out how to buy your next home

under the hammer, you've come to the right place.

Now, we're always telling you that you need to do your research

before you buy at auction but, what do we mean?

Go and see the property if you can

and find out all about it.

Yes. The more you know, the better prepared you are.

So, here are the properties that tempt the buyers on today's show.

This three-bedroom semi in Derbyshire

needs a little more space.

Straight through the front door and you've got this

very narrow staircase.

But in Streatham, south London,

a little balcony space goes a long way.

It might be small but any outside space is a bonus

in London.

And in Shildon, County Durham, I've run out for space altogether.

-Oops.

-BANGS DOOR

Bit of a design flaw that, isn't it?

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.

I'm in Ashbourne, Derbyshire,

known as the Pride Of The Peak.

Today, tourism is the main industry

but, back in the day,

most money was earned by doing things to milk.

Milk trains used to bring their cargo here

to be turned into condensed milk

but when that industry turned sour - ho-ho -

the factory was demolished

and Ashbourne is now known for its bottled water.

# But now the milk train doesn't come by here any more

# La-la, la-la-la-la... #

Well, just a half a mile outside Ashbourne

on this very busy main road is the property I'm here to see.

£110,000+ was the guide price for this,

a three-bedroomed, semidetached cottage-style house.

Nice, open views at the back. Let's take a look.

First, outside, and the obvious snag

is that they don't allow parking on the trunk road.

There is, however, a nice lawned area

that, subject to planning,

could fit a drive, parking and turning area.

But it is a rather nice garden, complete with shed,

so it would be a bit of a shame to lose it.

Oh, wow. That is weird.

Straight in through the front door and you've got this

very narrow staircase.

The good news is there's a downstairs loo and wash basin.

The bad news is

that they go alongside the only bath in the house.

There is a reasonable lounge

but a peculiar double pantry kind of arrangement.

The key to understanding this strange layout lies outside.

Being sideways on the road,

this pair of semis might be better described

as a pair of back-to-backs.

How they join up causes limitations inside,

and nowhere is this more evident than in the kitchen.

It's not a bad-sized space

but you'd think, well, let's expand it and take out this wall!

Unfortunately, on the other side of that wall

is the neighbour's house, so you can't do that.

Ahh!

Have I come across some more unusual layout

walking through the door of a property before?

I don't think so.

These stairs really are quite steep

and they lead to this sort of odd landing area

where it's another step up into the bedrooms,

and that's not really ideal, is it?

You know, coming out at night, a bit bleary-eyed - wallop!

The bedrooms are actually, surprisingly, a good size.

One at the front of the property there, lots of damp

and also you've got the boiler in there which really isn't ideal.

Boilers, bedrooms - bad combination.

Large bedroom there.

It's nice to see you've got the original fireplace, which is good.

And then, through to the rear bedroom.

This too, not a bad size.

Good to see an open fire in here as well.

But how about this?

-HE TALKS LOUDLY:

-I now present to you, ladies and gentlemen,

the great Martino and the amazing

disappearing arm trick.

Be amazed. Be very amazed.

-HE BLOWS

-No smoke, no mirrors.

Woooo.

Woooo.

That's weird, isn't it?

HE LAUGHS

Joking aside, this property has one of the worst damp issues I've seen.

And one thing I personally feel that hasn't helped matters

is the polystyrene insulation behind the wallpaper.

For me, I much prefer a matt finish plastered wall

that's free to breathe and absorb a bit of moisture.

We asked the auctioneer who sold it to take a look

and, in particular,

to tap him up about the downstairs bathroom.

It clearly needs refitting if you leave it where it is,

but does that mean I actually take it upstairs and sacrifice a bedroom?

It's always a thorny issue

because you come down to two bedrooms

whereas you leave it as three bedrooms, it's got a higher value.

But a ground-floor bathroom is not exactly user-friendly.

Oh!

Well, I've got this one down to being positively user-hostile.

Mind you, the suite does match the woodwork

and the guide price is only 110,000.

Was dusk pink ever in fashion?

If we refurbish what's here,

maybe with one or two alterations and additions...

I've got in mind a conservatory porch at the back

which might also double up as a utility area,

change the two pantry arrangements around and make them more usable.

..it would have a value of probably around £175,000.

Um, and that would have a rental value

of about £600 a calendar month.

Well, you're definitely going to have to spend a bit of time

sorting out the layout inside.

What you can't change quite so easily though

is the location by this main road.

Still, a good house for the money.

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

110+ is the guide price.

Don't mind where we start.

£100,000 I have. Thank you.

The lot came up

towards the end of the day,

and bidding was a bit sluggish to start with.

We rejoin at 117,000.

£117,000. 118,000 quickly.

117,000. 118,000.

119,000.

120,000.

-126,000.

-These two bidders fought it out

in £1,000 steps till reaching 128,000.

128,000.

129,000. 129,000.

And a half.

130.

And a half.

130,500.

131,000.

Sure?

£131,000.

Once.

Twice. Third time.

-GAVEL BANGS

-Sold at 131,000. Thank you.

Number 61.

And that successful bid of £131,000 came from Malcolm and Brenda.

They're local to the area

and would have gone up another £4,000 if needed.

Malcolm, Brenda, great to meet you both.

-Yes. Hello, Martin.

-Congratulations.

So, tell me why you wanted to buy this house?

Well, it stands well. It looks well from the road,

and apparently it had a new roof on in the mid '80s

and it's PVC double glazing all around

but a couple of windows probably...

-Right.

-..and doors, which is a big saving.

-Um, but a lot of issues as you can imagine, it has.

-Yeah.

A lot of damp issues and things.

Malcolm's not kidding.

However, he's a man of many talents

having been in dairy and crop farming

since he was a young boy.

Since selling the farm, he's driven milk tankers

whilst Brenda runs her own business

designing websites and providing virtual office services.

However, there's no doubt that they've taken on a challenge.

What are you going to do to sort it out?

THEY LAUGH

-Um...

-Well, I'm glad you're laughing about it anyway. That's good.

It's a lot of damp issues as you can imagine.

-This is a wooden floor which, as you notice, it'll slope down.

-Hmm.

So this floor has got to come out.

All through the door, through there, knock it all down...

-Right.

-..through there. Right up to the roof.

-Right.

Open the space and then start again.

-So new staircase and all that kind of stuff?

-That's right, yeah.

-New bathroom, new kitchen. Job lot, really.

-Wow.

I think the challenge really is to move the bathroom upstairs,

but not to lose the bedroom.

-Hmm.

-That's the...the big challenge.

It's half an understatement there, Brenda.

But once they strip out the steep stairs,

minstrel gallery and the space-wasting double pantry,

they will have quite a large footprint to play with.

So, who's doing the work then?

I've got a friend, a builder.

He's a really good friend. We go dominoing on Monday night.

-Do you?

-HE LAUGHS

Right. On the same team or do you play against each other?

-No, no, we're on the same team.

-Right.

-Yeah.

-Are you a good domino player?

-I'd like to think so.

So what's the skill to playing dominoes well?

A lot of bluff, really, you know.

That's what it is.

Pretend you've got dominoes you haven't and all this kind of thing.

It's a wonderfully sort of bucolic,

-old-fashioned game but charming, isn't it?

-Yes, it is.

-More of a social night, really.

-Yeah.

Lovely. So, anyway, he plays dominoes with you.

So he's going to do a good job, is he?

-Yes, I hope so. He said he would.

-Has he given you a budget?

Or have you given him a budget?

Yes, he's got a budget.

We thought 20,000, to be quite honest.

Right. And how are you going to be involved in things?

-Are you going to do things like pick the kitchen out?

-Yes.

Yes, I'll help with choosing some of the fixtures and fittings

and offering a woman's point of view on things.

-Yeah, brilliant.

-Yes, yeah.

Try and keep things within budget.

Although I think that's going to be a challenge, really.

-There's a lot to be done.

-There is a lot to do

once you start ripping things up like floors,

-you just don't know what you're going to find, do you?

-No, no.

-That's right.

And then the idea is to sell it on, is it?

-Possibly.

-Yes.

-Or rent.

-Rent out probably first

-and see how that goes, if it goes well.

-OK.

And if we can make a bob or two on it,

then sell it and have another project.

Malcolm and Brenda's timescale is six months,

and they are planning on putting a driveway in

with enough room to turn around.

Good idea.

And Malcolm hasn't even included the driveway in his £20,000 budget,

so how will he keep these costs to a minimum?

I've got a friend who does a bit of tarmacing...

THEY LAUGH ..so I'll have to get round him.

-Does he play dominoes as well?

-No, he doesn't. No, no.

-Well, congratulations. And good luck with it.

-Thank you.

-We look forward to seeing how you get on.

-Thank you.

So, some fairly radical plans for Malcolm and Brenda.

But, actually, radical though they may seem,

I think it'll make a massive difference to this house.

Will it end up being a double sixer? To use domino terminology!

You can find out later in the show.

And talking of radical changes,

Streatham, in South London, has seen quite a few of those

with three train stations into central London,

a new state-of-the-art leisure centre

and much more investment generally in the area.

It's property prices are cheaper than its neighbours

Balham and Clapham.

More and more people, I'm finding, are moving here.

And it's not just value for money that attracts people to this area.

Streatham High Road is reputed to be Europe's longest commercial street.

And so, there are plenty of shops and restaurants to choose from,

making it a very convenient place to be.

Now, apparently, it's only a short walk

to the property I'm here to see,

so I'm going to time it and find out just how close it is.

Ready. Go! I'm off.

Ha-ha! So the clock's ticking.

How long is this walk going to take, I wonder?

Well, it has taken me precisely...

Ooh. ..31.6 seconds.

This is a great location.

Now, let's chat about the property itself.

It's a three-bedroom, purpose-built flat.

It had a guide price of £200,000.

Hmm, sounds like this could be good value for money for Streatham.

I'm going to have a little look around and see what it's like.

The flat is on the second floor of this 1930s-built block

with no lifts.

It takes longer to get up the stairs

than going from the front of the building to the shops.

Oof! So there's two flights of stairs to climb

before you even get inside the flat.

That won't be for everyone, so something worth thinking about.

But what a lovely surprise when you get inside.

High ceilings,

wooden floor boards,

the kitchen is really spacious.

I mean, that is just fantastic.

You don't usually see such a big room in a flat like this.

Bathroom - again, lovely size,

although there's a little bit of damp just above the loo,

so I'd certainly get that checked out.

But, look! There's character.

Lovely doors.

These are my favourite doors. Absolutely gorgeous.

Really good size lounge, double glazing.

There's not a lot to not like in a property like this.

Fantastic.

# All right now

# Baby, it's all right now. #

And the three bedrooms, they're all right too.

Certainly, the master bedroom is a good-sized double.

As is the middle bedroom.

The third is a bit more of a boxroom,

but it would make a great study or office.

Now, this flat even comes with its own balcony.

It might be small but any outside space is a bonus in London.

So, all very positive so far.

But, if all seems too good to be true,

well, unfortunately, it often is.

On face value, this flat ticks a lot of boxes

but there's one box that hasn't been ticked,

and that is the length of the lease

which stands at only 64 years.

Once the length of the lease falls to less than 70 years,

mortgage providers will be less than willing to lend,

which could limit the resale market to cash buyers only.

And the shorter the lease, the more expensive it is to extend.

And we're not talking hundreds of pounds but usually several thousand.

Definitely, I think, a slight concern.

As are those signs of damp and some cracking.

But this is a good-sized three-bedroom flat

that was guided at 200,000.

As London property prices go,

that appears to be a good price.

But what does a local agent make of this Streatham flat?

It's a great flat. It's got some great features.

The stripped wooden flooring is a particular feature.

The kitchen is a really good size.

It does need a bit of updating but, in general,

it's a brilliant place to live.

I wouldn't make any layout changes to this property, I think it's fine as it is.

It would rent perfectly as it is.

If you were to make any changes,

you would have to approach the freeholder's permission to do so.

With no layout changes necessary,

I think you could turn this flat around

and get it ready for the rental market

in a reasonably quick amount of time.

Once renovated, this flat would rent for around £1,550 per calendar month.

That could mean a decent yield after some renovation work.

But what about possible resale values?

Once renovated with a short lease,

this flat would achieve about a £345,000-£350,000 mark.

And, once the lease is extended,

the flat would achieve somewhere around the £375,000 mark.

Wow. So, with or without that extended lease

there's plenty of potential uplift here.

This flat is a great size

and I think you'd be hard pushed

to find something in this fantastic location

for less than the £200,000 guide price.

However, it is not without its issues,

and it's in need of a new "lease" of life.

-SHE LAUGHS

-Let's see who decided

to take this on when we went to the auction.

Lot 24. Who'd like kick-off on this?

I don't know. Start low so you can get a bid in.

200. Not going to go below 200,000.

It's very low for Streatham.

200 with you.

205.

205. 210. 210.

215. 220.

225.

230. 230.

New spot. 235.

240.

One bid and that's it.

235 with you.

236, elsewhere?

236.

237.

238, elsewhere?

-240,000.

-So, after a relatively slow start,

a bidding war had started on the Streatham flat.

255...

And we've rejoined with bids at 260,000.

259, 260, 261.

262, 263.

264.

264. 263, with you.

264.

Got 263 sitting down. Anyone else?

At 263.

First time. Second time.

Third and last time if you're all done.

-GAVEL BANGS

-Sold for 263,000. Well bid, madam.

And so, for £263,000,

the successful bidder was Katie.

Katie works in recruitment for a fine art auction house

and she's bought it as a joint project with her two sisters.

# Sisters are doin' it for themselves

# Standin' on their own two feet

# And ringin' on their own bells... #

-Katie, congratulations.

-Thank you.

-This is a great flat.

-Thank you.

-We think so.

-How did you find this?

Um, well, my sisters and I, we were looking for an investment

relatively close to where I live,

which is just on the other side of the common...

just so it can be managed if we rent it out.

So we looked at a couple of places, set our budgets,

and this one came up and went lower than we would have paid for it, so...

Gosh, so you would have paid more money for this?

-Absolutely, yeah.

-So what was your top limit?

We were saying about 290,000, 300,000 for this one,

and then we ended up paying 263, so it was a bit of a steal.

-Do you feel that you've got a bargain?

-Absolutely, yes.

What is it about this flat that you love so much?

Being a Streatham girl, you obviously know the area very well.

Yeah. Streatham is absolutely on the up. It's...

I mean, I've lived here now for about a year and a half,

and since then you've already seen all of the coffee shops

and the cupcake shops and that kind of a thing spring up

which is always a sign of the gentrification,

as everyone likes to say.

So we thought it was a good place to invest

and we wanted somewhere relatively close, nice.

It's nice, and big and bright.

So we think it will rent out pretty well

once we've done a bit of work to the place.

It needs it.

But it's not just cosmetic issues that are the challenge here

for Katie and her sisters.

There's that small matter of the short, 64-year lease.

Let's talk about the lease.

So the lease is currently just under 70 years

but we have already...

The previous owners have already put in to have it extended.

We're just waiting for confirmation of the price

but it should be around 12,500.

About the structure of the building,

I did notice a few little cracks just above the window in the lounge.

-Yeah.

-Anything to worry about? Have you had this surveyed?

We haven't, no.

We have had a sort of general survey,

which didn't show up any major problems,

apart from a little bit of damp

that we need to do a bit more investigative work into

but that's something we really need to have a quick look at.

But hopefully, it'll just be surface so that we can just...

So you're not worried about that?

Um...

not yet.

Katie's don't-worry attitude will hopefully pay off

but, given she and her sisters are first time developers

with no building expertise,

the structural survey would have been my recommendation.

£263,000 is a lot of money to put at risk,

no matter how small you might think the risk is.

So what are you going to do to do it up, to change it?

First of all, it needs a good clean.

And then we're going to repaint the whole place,

restore some of the original features, like the fireplace,

put in a whole new bathroom and we might be able to salvage

some of the kitchen cos the units look quite new.

But we were looking at the high end of the market,

so maybe putting granite work surfaces in

and sort of making it quite a high-spec flat.

But the budget will need to be kept under control,

there's a lease to extend.

Katie expects they'll spend £25,000 on the flat,

including the 12,500 grand for sorting the lease.

Katie's current job is at a high-end art auction house,

so she's no stranger to bidding.

Before that, she was an estate agent.

Could this be the beginning of a new career for her?

I'll have two weigh up what sort of money you can earn

from doing this kind of a thing.

It is a dream of mine, but who knows?

It can be quite stressful at times.

Are you prepared for the extra work that you have to put in?

Um, yeah. I mean, and the reason for buying so close to home

is that, literally, my sisters and I

can just pop across the road, spend every Saturday, every Sunday here,

do whatever we need to do

and then pop back to mine for a couple of hours' sleep

and come back again.

So we're hoping about six weeks.

Are you going to actually do anything?

I'll get my hands dirty as much as I can.

-SHE LAUGHS

-Just going to manage it,

organise it, do a grand job of that?

Yeah, I think I'm more of a project manager than a doer.

My sisters are more into their painting

and they're a bit more creative than me, so...

-My sister is a visual merchandiser and that's what she loves doing.

-Ah!

So I'm going to leave it to her to choose colours and pillows

and all the nice stuff.

Do you and your sisters get on well?

Likely to be any sisterly quarrels, do you think?

Um, we do get on well.

We don't see a huge amount of each other

cos we all live in different parts of the country

but I'm hoping that we should be able to get along

and perhaps it's something that might bring us closer.

Katie, I'm so excited to see the outcome.

-Well done. Congratulations.

-Thank you. Thanks.

It's a great start that Katie and her sisters

have bought in an area that they know well

but they've never renovated a property before

and they haven't had the flat surveyed,

so I hope...uh, that damp doesn't cause any problems for them.

Join me later on in the programme and you can find out what happens.

Still to come, a strange layout leaves me stumped.

Somebody sat down with a piece of paper

and designed it like this!

And we catch up with Katie and her sisters

to see how they got on with that Streatham revamp.

Back now to the Pride Of The Peak,

Ashbourne, in Derbyshire,

where this cottage-style three-bedroom detached house

was bought by Malcolm and Brenda for £131,000

with a view to doing it up and renting it out.

To me, the restoration looked like a big job,

what with the damp issues...

..a bathroom crowning the unusual downstairs layout...

and a hazardous kitchen.

It did, however, have plenty of pantry space.

But Malcolm had a plan.

I've got a friend, a builder.

He's a really good friend. We go dominoing on Monday night.

-Do you?

-HE LAUGHS

Right. On the same team or do you play against each other?

-No, no. We're on the same team.

-Right.

Are you a good domino player?

-I would like to think so.

-So he plays dominoes with you.

-So he's going to do a good job, is he?

-Yes, I hope so.

-He said he would.

-Has he given you a budget?

-Or have you given him a budget?

-Yes, he's got a budget.

-We thought 20,000, to be quite honest.

-Right.

Hopefully, he can come under that but he assures me it may not.

-Right.

-THEY LAUGH

Nine months later, there's a new porch and space for a drive,

an early priority for the construction vehicles,

but the biggest changes are inside.

# Anything could happen

# Anything could Ooh, ooh, ooh,

# Ooh, ooh, ooh, ooh, ooh

# Ooh, ooh, ooh, ooh, ooh

# Ooh, ooh, ooh Ooh, ooh, ooh... #

The rearranged downstairs is much more spacious.

There's even room for a downstairs loo under the staircase...

..which has moved to the back wall of the property

instead of next to the front door.

The sitting room is certainly in the pink,

but this time in a good way.

One of the triumphs of the new layout is the bathroom,

which they've squeezed in upstairs

with a new dormer window.

# But now I've seen it through

# And now I know the truth

# That anything could happen. #

The P-shaped bath makes the most of the confined space

to squeeze a shower above it.

# Anything could happen Anything could happen

# Anything could Ooh, ooh, ooh

# Ooh, ooh, ooh, ooh, ooh

# Ooh, ooh, ooh, ooh, ooh Ooh... #

With the under paper insulation removed

and the walls replastered,

they're able to breathe again.

And flippers are no longer required at bedtime.

Now the three bedrooms are serviceable

without the damp or strange wood cladding.

It looks great.

But this journey has not been without its elephant traps,

mainly pink elephant traps.

It was terrible, really, and it was a lot worse than we thought.

It needed a lot more work doing.

We realised there were problems with the roof.

The roof looked to be in good order

but, apparently, it wasn't when the builders came in.

Which just goes to show the value of a structural survey.

Looking back on the old roof,

it's hard to see any problems from the outside.

They only came to light later in the day.

When we took the plaster off and all the panelling,

there was a roof joist which had got a big bow in it,

and, of course, which left the roof down by one foot.

Only one foot,

but all the water started coming in on the inside of the house

and down when it rained heavily.

When the work wasn't specialised,

Malcolm was ready to help his domino-playing builder chum.

Even so, with the roof problems and having to tank out

all of the downstairs to prevent damp,

they overran their initial timescale of six months

by an additional two months.

But the team were lucky with some of the job.

Took two chimney breasts down,

which was a bigger job than we thought.

And we started about that the wrong way, apparently. We did.

We should have started from the top and come down,

we started from the bottom and worked our way up.

HE LAUGHS

Yes, hardly the approved method.

It can lead to the domino effect, don't you know?

But removing this chimney breast from the kitchen

gained another two feet in width.

And if you're wondering about the lack of radiators,

Malcolm and Brenda decided on underfloor heating

to save space downstairs.

But all these late additions must have affected the cost.

What was the original budget, Malcolm?

20 grand, didn't we?

-You did.

-I did.

My wife Brenda here said a lot more, which it was.

It was double that actually.

It was close on 40 when the outside's complete

and everything is completed.

Just over 40,000 we've spent.

So, £131,000 at auction

plus £40,000 spent on refurbishment.

Time to find out if it's been worthwhile.

We called upon two professionals to get their view.

First up, the auctioneer who sold Malcolm and Brenda the property.

And hot on his heels, a local surveyor.

So, first impressions...

You expect properties to change when you come back and see them

but this is probably one of those properties where

it's almost now beyond recognition to what it was.

Massive change taken place

and really a great transformation. It works very well.

To open the whole thing up and put a new staircase in,

almost sort of revamp the ground floor area there,

is exactly the right thing to do.

You've got an impression of space now that you never had before.

Bathroom upstairs and a nice little cloakroom under the stairs.

You know, all these things make living today very nice indeed.

So, much impressed.

This now makes a nice living room, dining room or whatever.

You've got a good sitting room next door as well

and a smart kitchen.

And I think, altogether, you've got three usable rooms

on the ground floor, and that's a big improvement.

Malcolm and Brenda's preference is to rent out.

So, what do the chaps think is a reasonable rent?

I think this house could realise towards £600 per calendar month here.

There is a very strong rental market indeed.

It will rent out fairly readily at £600 a calendar month.

-That's about what we thought, isn't it, really?

-Yes, yes.

-It is.

-It is. Yes.

-Yes. Yeah, it is.

In fact, Malcolm and Brenda have got an intended tenant

who will move in when the external work is completed.

They say they've agreed a rent in line

with what the professionals have suggested.

And that rental will give them

a relatively modest yield of around 4%.

What about resale values, bearing in mind they've spent 171,000?

I think that the sale price for this could be in the region of £180,000

to possibly 190,000 top whack.

I do not see it realising £200,000

because of the limitations of the position.

Assuming it's finished off outside,

so we've got the driveway and maybe a garage as well,

this would go on the market at a figure of around £180,000.

I'd expect to get around £175,000 for it.

-That's about what we thought, isn't it, really?

-Yes, it is. Yeah, yeah.

-It is, yes.

-That's quite good, really.

-Yeah. I'm not too disappointed in that, no.

-No.

The £9,000 possible profit, minus the usual tax and expenses,

means that Malcolm and Brenda

will be hanging on to their house for a little while yet.

So, have they learned any lessons?

THEY LAUGH

Probably to buy a house in a bit better condition.

Yes, yes. We'd walk away.

Shildon, in County Durham, was the first railway town ever

because, on the 27th September 1825,

the world's first passenger train started its journey here.

The National Railway Museum has commemorated this

with exhibition halls of preserved buildings.

The engine, Locomotion One, looked a bit like this,

but it only had four wheels instead of six.

But when Shildon's wagon works shut in 1984,

over 2,600 jobs were lost.

Now, things are on the up with a major new housing development

bringing new jobs to the area.

So, steaming ahead to the property I'm here to see.

Traditional, two-bedroomed mid-terrace

at a guide price of £29,950+.

Let's take a look.

Right. Oh, hello.

That looks quite pleasant.

Stairs up to your bedrooms.

Straightaway, it's amazing what difference a nice carpet makes.

It just lifts the place.

So it looks at first glance to be in not bad condition.

You've got double glazing, central heating,

front sitting room area here.

Yeah, the decoration could do with a bit of touching up here and there

but it's not bad.

Oh, similarly the kitchen, you know?

For a rental property - perfect.

Actually a really nice place to live.

For once...

that is it.

On the minus side, the back yard is hardly a paradise.

But at least you've got

that all-important bit of an outside space

accessed via an alley at the back.

# Clean up your own back yard

# Oh, don't you hand me none of your lines... #

-BANGS

-Oops.

Bit of a design flaw that, isn't it?

Apart from that though, the bathroom and toilet -

exactly where you'd hope it would be - top of the stairs.

I suppose...

Often with these properties out the back

and it's in half decent condition.

Yeah. Good.

Bonus size basin or not,

the inside of this house is better than some

I've been in after a refurbishment.

I'm struggling to find fault but, of course, I found something.

Now, the upstairs layout is nothing short of extraordinary.

We've got two bedrooms but I...

don't think I've...

Well, not ever.

But, in recent times, seen such a badly-designed use of space.

You've got this little corridor thing here,

which basically just leads to a door.

That's a bedroom there which is a bit too small,

and then you come into this bedroom here

and you've got this little area over here

which goes back into, presumably,

where the other side of the bedroom is.

All these walls -

-HE BANGS

-as you can hear -

are not supporting walls,

they're stud partitions, basically bits of wood

and plasterboard on the outside, so you can take those out.

But somebody had put them in.

Somebody sat down with a piece of paper

and designed it like this!

Amazing.

Well, apart from that,

this property has lots going for it.

All the major works appear to have been done,

and there are just a few little bits and pieces

that could be sorted out for relatively little cost.

And a great guide price of just short of £30,000.

Time to speak to a local property expert to find out more

about the housing market in this area

and what she thinks this little house offers.

The property has an upstairs bathroom,

which is a major consideration,

whether the owner wants to rent it out or to sell it,

and two bedrooms.

I wouldn't recommend any changes to the layout of the property.

It'll work for the vast majority of people

who would be interested either as purchasers or tenants.

So, what about values then?

What's the likelihood of renting this out if you wanted to?

There's a lot of property that's rented out around here.

It was very much a popular place to buy in the buy-to-let boom.

And there is just a finite number of tenants, so...

..you can't get too high a rent around here.

You've got to remain competitive,

otherwise, you'll have an empty house.

At the moment, a property in this condition,

we'd be anticipating a rent

in the region of £300 per calendar month.

And if it was refurbished to a very good standard,

you could possibly push that up

more towards the £350 per calendar month mark.

And what about resale in the open market?

There is a kind of ceiling price around here

and that's £60,000.

But this property, if it's done to a good standard,

due to its location, should achieve quite close to that.

Well, it might not be the most unusual property in the world,

but it's a good little house.

And you could pretty much move into it as it is,

which is a very good thing indeed.

Let's see who wanted almost an instant property

when it went under the hammer.

It's in a condition that is more or less ready to rent out.

We've got this available with a price guide of 29,950+.

Can I ask for 30,000?

Any bid at 30?

How about 28 to start?

28,000.

ROOM STAYS QUIET

It's double glazed.

THEY LAUGH

28,000.

28,000, anybody?

Right at the back at 28,000. Thank you.

29,000.

I have one bid of 28,000.

Do I have 29,000 anywhere else?

One bid. 29,000 standing.

30.

30,000 standing.

31. 31 bid.

32 bid. 33.

I'm in the room at £32,000.

32,500.

You've been unlucky on the rest.

32,500.

And I'll buy you a pint.

You've been here from the beginning.

32,500.

Trust me. Try.

I'll take 250 then.

I'm feeling sorry for you. 32,250.

No? 32,000.

Do I have 32,250 anywhere else?

I'm here. I'm at the back at £32,000.

Are you sure? 32,250?

You have to say yes, we're all watching you now.

THEY LAUGH

You have to. 32,250.

32,250.

-LAUGHTER

-32,500.

Don't ruin him. 32,250. I need 32,500.

I'm going once at 32,250.

I'm going for the second time at 32,250.

-GAVEL BANGS

-Sold.

Gentleman on the right-hand side at 32,250.

Well, persuaded by the promise of a pint

is financial services worker Howard.

Originally from London,

he's lived and worked in the Northeast for the last ten years.

-Howard, good to meet you.

-Hi.

Congratulations.

That was a bit of an unusual sales technique there.

Yeah, I think the pint just put me over the edge

and sealed the deal there.

I was thinking about the bid

and I was thinking about the prices and then

he said it and the room just seemed to wait, and I thought,

OK, if it's a pint... It's a hot night, I'll have it.

-HE LAUGHS

-So that was that.

So, tell me why you wanted to buy this place?

I didn't actually want to buy this place,

I wanted to buy a house just up the road.

-Right.

-I went to see it.

It was a complete wreck

but it went for too much money.

So, as a fallback, I thought I'll have a look at this place,

it's already been done.

And it's turned out it's been a lot better deal for me.

So had you seen this one?

I'd seen it on the street. I'd looked through the window

but I hadn't actually planned on buying it.

Right. So you hadn't been through the front door?

-No.

-Ha!

-No.

But I'd seen the street, I'd checked out the roof and things.

No obvious signs of cracking or any subsidence,

any of those obvious issues.

When I went to the auction, I checked out the legal pack

on the other property

so I knew that there was no development planned for the area...

-Right.

-..and things like that. So I'd done a little bit of research.

I also looked on websites

and looked at what the houses had sold for in the area in the past

and what they were renting for at the moment.

Right. So you knew what you were doing.

You looked at the legal pack for this one though?

-No. It wasn't available at the time.

-Oh, really?

-Yes.

-Wow. So what happens in those circumstances?

What happens is, you agree to buy it, they guarantee the title

and then it goes off to a solicitor after the auction,

-and if the title's not correct, then you can withdraw.

-Right.

Obviously, if the title is correct, you proceed.

Right. So if there are things like nasty covenants

or strange things in there, you'd be covered?

-Yeah, you can then pull out.

-Right.

-OK.

-Which I thought gave me some protection.

-Right.

Well, you must have been pleasantly surprised

-when you walked in the front door.

-Yes, yes.

It's a lot cleaner than I thought.

It needs very little work doing to it.

So, yeah, I'm really, really pleased.

So why have you bought it?

Well, originally, it was for a friend of mine.

He thought that we were buying the other house as well.

He was away on holiday and, when he came back,

I told him that we'd actually bought this house.

We then had a subsequent chat and it's something we're doing together.

-Right.

-So we're actually going to go into business together...

-Oh, great.

-..and have the house.

-But that wasn't the original plan?

-No, no.

So, this pint of beer...

-Yeah.

-..could lead to... Have you looked back at it and think,

-whatever develops in the future...

-Yeah.

..could lead to a lot of things?

-How life can change on a little thing like that.

-I know, I know.

-Wow.

-I know.

So, tell me what you are going to do to it then.

Uh, basically, I think it's going to have a little tidy-up.

Probably refresh the paintwork.

There's a few cracks and things to fill.

Upstairs, the sink is just far too big for the bathroom,

so we're going to change the sink.

There's a fairly new boiler in the property.

The circuit board's OK.

We're going to have the electrics tested,

obviously the gas and things.

Probably put a few kitchen appliances in,

and that's about it, really.

-And then rent it out?

-Rent it out, yeah.

Bring it back to market

and hopefully some family will come and move in quite quickly.

So the budget for what you are going to do?

For the work that we're going to do - for the bathroom,

I'm thinking around £200,

white goods - similar,

and then for paint - about £100.

-So a total of about £500.

-Wow.

And it should be ready to go in two weeks.

-Two weeks?

-Two weeks, yeah.

-Bing, bang, boom.

-Yeah.

Well, if he pulls that off, it could be drinks all round.

# Drink, drink Let the toast start

# May young hearts never part

# Drink, drink, drink

# Let every true lover salute his sweetheart

# Let's drink! #

Any other portfolio properties that you've got or...?

Um, I've dabbled in property in the past

and I do still have a couple that I have.

And Kevin has also got properties and a pub,

so I may be getting my pint from him.

MARTIN LAUGHS

And, yeah, we're just really looking to build now

on the partnership that we're going to form

and to look for similar properties to this,

maybe a bargain or two at the auction

and, you know, move onwards and upwards.

-Well, congratulations.

-Thank you.

-Good luck with it.

-Thank you.

-We look forward to seeing how you get on.

-Thanks very much.

So, Howard keeping a cool head

when it came to buying this place.

Hopefully it will be plain 's-ale-ing'

when it comes to doing it up

and not a "bitter" sweet experience for him.

HE SNIGGERS

-HE LAUGHS

-You can find out how he gets on

and if he gets that pint of beer later in the show.

Well, this is the part of the show where we go back and find out

if our buyers kept their promises.

Or did they do everything they were supposed to?

Let's find out.

Now, back to Streatham, South London, where,

earlier, this three-bedroomed 1930s second-floor flat

was bought by Katie for 263,000

as a joint venture with her two sisters.

It's their first attempt at property development

and, ideally, they wanted to sell on

but would be happy to rent in the short term.

But how about the division of labour between the siblings?

I'll get my hands dirty as much as I can.

-Just going to manage it, organise it, do a grand job of that?

-Yeah.

I think I'm more of a project manager.

They're a bit more creative than me, so...

-My sister is a visual merchandiser and that's what she loves doing.

-Ah.

So I'm going to leave it to her to choose colours and pillows

and all the nice stuff.

15 weeks ago, the flat needed some loving attention.

Katie wanted a new kitchen, bathroom, new flooring

and to redecorate

with a more neutral tone than the previous owner's love of red.

Time to find out what Katie did.

# She's gone

# And I'm picking up the pieces... #

Katie and her sisters spent money where it mattered

with this quality bathroom suite...

..double shower cubicle in tandem with the bath,

fully tiled in dual tones

and slate flooring to contrast.

The lounge too is transformed.

# I found a photograph

# Behind the TV

# You look so happy

# Are you missing the way it used to be? #

A period fireplace with large mirror above

is one of my favourite combinations

when it comes to restoring the authentic '30s look.

The girls did save money in the kitchen

deciding the existing units would be serviceable enough

in the short term.

The white wall tiles bring a much brighter look

and all the wooden floors in the flat have been polished

and, where possible, lifted with a lighter stain.

Katie reckons the work took around a month,

shorter than her original estimate of six weeks.

She did, however, have a delay

of about eight weeks waiting for a mortgage.

And she didn't forget to rejuvenate that bijou...

..but bonnie balcony.

We've heard a lot about them. Now it's time to meet them.

Katie's sisters are back in town.

On the left - visual merchandiser Emily, from Southampton.

In the middle - Ellie, who lives in Kent

and works as a clinical coordinator with the NHS.

And we all know Katie, who freely admits

she got some help from a local builder.

It was really the kind of the hard...elbow work

-that we weren't involved in...

-Yeah.

-..and we're not too upset that we weren't.

-No.

-And we did do the first clean when we came round.

-Oh, yeah.

-You know, realised...

-A lot of cleaning.

..how much actually needed doing, so...

-We did a bit of cleaning.

-THEY LAUGH

Elbow grease aside, did it all go smoothly?

Couple of strops with...

-Colours and stuff.

-..tiles and who wants what.

I bought the tiles for the floor in the bathroom,

and we weren't sure at the time if it would be too dark,

so we were kind of debating about it,

-and when we saw it, we were really, really pleased.

-Yeah.

I chose the colour of this room.

Emily wanted it slightly more grey.

Those two chose the bathroom.

And then I think we all wanted white, really.

The girls have been hoping to keep costs around the mid 20,000 mark,

and that was to include extending the lease.

However, rather than 12,000 to extend the lease,

that is going to be nearer £20,000 on its own.

Although it will make the flat more saleable,

it is a significant increase.

In fact, it looks like their final spend will be £35,800.

Are they pleased?

-ALL:

-Yeah.

-Yeah, we're really quite chuffed.

-I'd be happy to live here.

-Yes.

And friends and things I show round sort of come in and go,

"I'd live here," so that's quite a big boost.

Well, let's see if we can give the girls another big boost.

We asked two estate agents along to give us their thoughts

and valuations on the girls' investment

of 263,000 they paid at auction

plus £35,800 on refurbishment

and sorting the lease,

making a total spend of £298,800.

First impressions are very good.

It's a very bright property. Very airy.

You get a great feeling of space as you come through the hallway.

It's really nice.

Generally walking around - very, very bright, nicely done

and I think it's a good job.

Yes, I think good job indeed.

But what will this good job be worth

when it comes to renting the flat out?

I think this property could rent out for £1,300 per calendar month.

I think this property would rent very well

for £1,650 per calendar month.

But the girls haven't hung around.

They've already found a tenant

who's going to pay £1,450 per calendar month.

Slightly below the estate agents' average,

but still giving them a yield of 5.8%.

It was actually a friend of mine,

really close friend of mine's boyfriend

who's looking for a three bed in Streatham.

We had a girls' holiday and I turned up and... Just...

..came out that her boyfriend was looking

and as soon as we got back that night,

I showed him and his friends around and they absolutely loved the place.

The girls are renting until they sort the lease out.

But what would their total investment of £298,800 realise

if the property went to market?

I think, assuming the relatively short lease at the moment

of 65 years was extended, I think we could

safely put it on the market at £375,000

and expect to achieve that.

This property would achieve between 400,000 and £410,000.

-Good.

-That's really good.

-Yeah.

-That's really good.

-We were thinking...

-I mean, Katie thought sort of 380-ish...

-Yeah.

I was thinking 400 cos I'm an optimist.

Well, I think even a pessimist would be happy

with the top valuation,

as it could give them a potential profit

of £111,200, minus taxes and expenses.

So, I think I know the answer to this one -

would they do it again?

Yes, we are planning to buy another one

in the next couple of months, hopefully.

-Probably at auction again.

-Yeah.

We don't have quite as large a budget as we did previously,

so we think we might look at looking outside London,

so potentially Southampton because that's where I live,

so maybe I can take the lead with that one.

-Should be good.

-Sounds good to me. THEY LAUGH

# Sisters, sisters

# There were never such devoted sisters. #

Back now to the Northeast

and the town of Shildon, County Durham, where earlier,

this two-bedroomed, mid-terraced

was bought by Howard for £32,250.

The deal was sealed after the auctioneer

offered to buy Howard a drink.

He thought...

OK, if it's a pint...

It's a hot night, I'll have it. HE LAUGHS

-So that was that.

-So, tell me why you wanted to buy this place?

I didn't actually want to buy this place,

I wanted to buy a house just up the road...

-Right.

-..but it went for too much money.

So why have you bought it?

Well, originally, it was for a friend of mine.

He thought that we were buying the other house as well.

He was away on holiday and when he came back

I told him that we had actually bought this house.

We then had a subsequent chat

and it's something we're going to do together.

After the auction, Howard saw inside the house for the first time.

Like me, he was surprised at how little renovation was required.

He budgeted £200 for filling cracks

and touching up paint work,

and a further £300 to change the bathroom sink

for a more reasonably-sized one

and for some new kitchen white goods.

Now we're back to find out how Howard has been getting on.

It's been nine months now since first filming

and I've done very little, to be honest.

Well, they say honesty is the best policy,

and it certainly paid off for Howard.

Before we could catch up with him, he'd got a tenant.

# Well, I'm a lucky man... #

So, apart from being occupied, what's changed?

I had a spare key cut for the door so the tenant could get in and out.

I replaced the shower curtain and pole.

I didn't have to change the sink, so that was an expense I didn't have.

I gave the tenant the choice of the sink.

I was concerned that the door would bang against the sink

and it was oversized for the room but she seemed quite happy with it,

so we've left that rather than disturbing it,

so that's saved me kind of £70, £80 for changing the sink

and that could be used on another property perhaps.

Howard has appointed a property management company

to do the day-to-day running.

They take 10% of the rent.

He'd asked them to fix a new side panel to the bath,

but when it came to it,

all that was needed was a refitting of the old one.

No change there then, apart from the shower curtain and pole.

But what about outside?

The back yard really just needed a tidy-up

and that's all that's been done,

so, very, very little outside as well.

If you're having difficulty

spotting the difference in the back yard,

this is before the tidy-up...

..and this is after.

Can't have made too big an impact on the budget.

My budget has been very, very small.

I've stuck to it and I've come in well underneath.

Now, the original timescale was two weeks.

Was that overgenerous too?

I came for one afternoon.

I spent a couple of hours and that's been it.

It's been a really simple process.

But Howard did end up undertaking one of those unforeseen

and unplanned for jobs

that come to light only after renovation work has started.

He changed some light bulbs.

Well, I've changed the one in here,

so I've got all energy-saving light bulbs around the house.

And not even all of those needed changing

cos there was already a couple in here.

So my total spend on light bulbs was just under £5.

# That's why I'm easy... #

What does business partner Kevin think of the finances?

He was with me when I bought the light bulbs,

so we did discuss that.

And we also decided between us

that we were going to have an extra set of keys.

Apart from that, he's really a silent partner.

He's been sat back and I've just taken care of everything.

In fact, of his original £500 estimated refurbishment budget,

Howard's only spent £151.

But he did also pay £32,250 on behalf of Kevin at auction

before they decided to become business partners.

Time to find out if all that hard work, ho-ho-ho, has paid off.

We invited two local estate agents round to get their opinions.

The property doesn't seem to have changed very much

from when we saw it the first time but it is now lived in,

so it does look a little bit different.

But the actual condition of the property

is just as when we saw it last.

The property has been done to a decent standard, in my opinion,

for a terraced property of this type.

I feel that more upgrading could have been done

to make it superficially better.

To be fair, if it had been my property,

I would have done a redecoration,

tried to improve the kitchen somewhat and the bathroom,

but the fact that it's been let already

would possibly indicate that that wasn't necessary.

I would have definitely changed a little bit more in the kitchen

and upgraded it, made it lighter and more open...

..but, other than that, I think there wasn't a lot...

a lot more that could have been done to the property.

To put this property up for rent,

I would recommend asking £325 per calendar month.

I think we could achieve £325 per calendar month

for a property of this calibre.

Yeah, that's about right. That's what I'd looked at.

I'd looked at slightly more but didn't think it was realistic.

For me, I'd rather get a bit less money and have a tenant

who's happy and stay put rather than changing every six months.

But the reality is,

Howard got a tenant through his property management company.

After their 10% commission,

he's actually getting £315 per calendar month.

So the yield on his total spend

works out at just over 11.5%.

Cracking.

And what about resale?

To put this property up for sale,

I would recommend an asking price of £60,000

but I think the seller would have to be prepared to receive offers

significantly below that figure.

I think, for sale,

we could achieve in the region of £55,000 for this property.

£55,000 would mean a potential profit of £22,600

minus the usual tax and expenses.

I think it's good to know that the value is there.

I knew that I'd bought it and had a good price at the time.

However, I didn't buy it just to sell it on.

I'm happy with the tenant, I'm happy with the return at the moment.

So, yeah, if anything,

I'll probably remortgage the property

and then look at using some of that extra capital

to go back to auction and buy another house.

Speaking of auctions,

has Howard chased up the auctioneer yet about his offer?

No, he still owes me that pint.

Next time I go back to the auction, I'm going to make sure that I get it.

Well, good luck with that, Howard, because,

in my book, given the deal you got,

I think it's YOU that owes the auctioneer a pint.

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

We'll have more stories from the auction rooms of Britain

for you next time.

And we look forward to seeing you then.

-Goodbye.

-Goodbye.