Episode 40 Homes Under the Hammer

Hello. If you have ever been tempted to buy at auction,

well, perhaps now is the time to take the plunge,

because there is so much variety on offer in those catalogues.

There are literally hundreds of auctions going on throughout

the country, throughout the year,

So now is the time to head down and check out the auction action.

People often ask us how to behave in the auction room.

Yes, that's right - be visible, make sure the auctioneer can see you.

Yes. Have a budget, and stick to it.

Oh, and don't wave at friends across the auction room.

Let's take a look what our buyers bid for on today's programme.

Firstly, in Burnhope, County Durham, some eating habits are barking mad.

-Your dogs eat vegetables?

-Yes, potatoes, apples...beetroot.

In central London, I've got to do the penguin to squeeze in.

You'd literally have to get like that down the side to get into the bed!

And we head to the valleys of Wales to the town of Abertillery,

where this terrace had me purring.

This house doesn't have to do much more to impress me.

All these properties have been sold at auction.

We will find out who bought them and how much they paid for them,

-when they went under the hammer.

-Sold.

MUSIC: Bad Weather by Poco

I'm in the North East of England, in County Durham,

and the small village of Burnhope.

Well, the weather's closed in a bit, but the property

I'm here to see, if I can see it through the mist, is this.

It is a semi-detached bungalow, three bedrooms.

Had a guide price of £39,950+.

Let's go inside.

So, what have we got?

Well, through the front door, a nice storage cupboard there,

always quite useful to have that kind of thing.

OK, right. Well, you'd obviously want to sort that door out at some point!

-Bedroom there is a half decent size.

-HE LAUGHS

It's always the small things, isn't it? A rear bedroom there.

More storage units. I wonder if the doors close on those.

And then through into the rear of the property,

actually, for a bungalow, it's feeling quite kind of spacious, so we like that.

Patio doors out onto the garden gives this room a nice feeling of light and airiness

and then onwards to the kitchen.

But before you get to the kitchen,

there's this little dining room area. Lots of sort of DIY stuff,

but then through to the kitchen and this part of the house is actually

a more recent extension and, wow, does it give a lot of extra space.

For a start, you have this huge kitchen area,

which dated though the units are, and probably need to replace those,

it's a really nice size.

And then onwards to basically a utility area,

really giving the bungalow lots and lots of extra space.

And in general, layout, well, surprising.

Does it work? Yes, no, not sure.

I mean, there is space to play with. At the front entrance, apart from

the two bedrooms you've already seen, to your left off that hallway

there is another little hallway, allowing access to a third bedroom.

Now, I'm all for good storage, but really there is a lot

of wasted space, of cupboards and hallways and doorways.

And the bathroom next door to the third bedroom is tiny.

It could flow so much better and I don't know why, but there's

something about this bathroom that makes me a little bit teary-eyed.

MUSIC: Dolphins Make Me Cry by Martyn Joseph

But the house itself is only half the story.

Come round the back of the bungalow

and not only can you see the extension,

but also this absolutely fantastic garden.

It stretches all the way back to the fence in the distance there.

There's also a fairly tumble-down garage.

So, a really nice amenity area.

Space for possibly another extension here, or a conservatory.

Either way, really nice additional thing to have.

And at a guide price of £39,950,

there's a lot of property and land that went under the hammer.

We asked a local estate agent for his opinion as to the best way to

add even more value to this bungalow.

A potential buyer might look at

a way of incorporating a kitchen-dining area into the property

and possibly changing the layout in that way.

And once the bungalow had been refurbished,

what would be the prospects of letting it out?

I think there would be a reasonable rental demand for the property,

probably expecting to achieve something in the region

of £400-£425 per calendar month.

And if the plan was to then sell the property on,

how much could it achieve on the resale market?

Once refurbished to a decent standard,

I would expect this property to achieve a sale price

somewhere in the region of £90-100,000.

I think a potential owner of the property may consider adding a conservatory,

coming out of the French doors from the lounge and then through to the rear garden.

Also the garage is in a poor state of repair,

so I think that would need to be replaced. Once these improvements had been made,

I would consider putting the property

on the market for a price in the region of £110-115,000.

Well, for a guide price of £39,950+,

there was a lot of property on offer here.

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

A price guide of 39,950. Can I ask for 40,000 to start?

No bid. 35 bid.

37 anywhere else? 37 standing.

I'll take 39. 39. 41.

41 bid. 43?

There was a lot of interest in the room,

and we rejoin the auction at £58,000.

58? 58.5? 58.5 bid. 59?

59 bid. 60.5 bid. 61? 61 bid. 61.5?

62? 62.5? 63?

63.5? 64? 64.5? 65?

65.5? 66? Gentleman sitting down at 65,500.

66? No?

Gentleman sitting down at 65,500.

This is your last chance on 66.

I am selling to the gentleman in the fourth row at 65.5.

I am selling it once at 65.5, I am selling at a second time at 65,500.

Sold to the gentleman sitting down.

And the successful bidder paying £65,500 was Graham,

who was at the auction with his wife Karen.

They have been married for 29 years and were teenage sweethearts.

Karen works as a manager in a local business.

Graham's a self-employed bricklayer who comes from a long,

illustrious line. His father and grandfather were also bricklayers.

A handy background to have when it comes to property development.

I met them both back at the bungalow to find out their plans.

Karen, Graham, great to meet you both. Congratulations.

Tell me why you wanted to buy this place.

We want to sell our previous house

and we need somewhere to live to take all our junk.

-Until we do that one up.

-OK.

And then eventually, after a couple of years,

we may well rent this out and move on. But we're going to live here.

Oh, great. And, what's prompted the move?

We need to move on, because our current house has got four bedrooms

and our son has moved out, so there are only two of us

rattling around in there, and it's too large.

So this is actually a bit of a downsize, albeit a decent sized house.

And why did you choose this particular house, then, out of the ones that you could have gone for?

It's got a big garden. That is a big plus to us.

We need to put a garage up, in order to store all the various bits of junk

that we have accumulated over the years.

As I'm a builder, there's lots to go in it, loads of household things and other stuff.

What about inside? What do you think of that?

It's nice the way it is, but to suit what we want for us to live in here,

there's things we'd like to do, and I think they are doable.

Tell me what you're going to do to it, then.

Well, as you come in the front door, there's a passage there,

so we'll extend one of the bedrooms out into the passage,

we'll just take that corner without losing the passage there,

so that's extended this living room a small bit.

And remove the passage from in front of the bathroom.

We'll have a bigger bathroom then and we'll be able to put a bath

in there as well, which'll be an advantage.

Graham and Karen have sussed the real issues with the house

and its wasted space.

By getting rid of the front hallway and entrance, they can steal

the whole space for the bedroom, living room and the bathroom.

Much better. And they have some other ambitious plans.

Take this ceiling out, because we're going to make it a vaulted ceiling,

-so that the ceiling goes up to the loft.

-Oh, wow.

This chimney needs to be removed and rebuilt

because, outside, it's falling apart.

And you can do a lot of that yourself.

Physically capable of doing it all myself and I know how to do it,

but unfortunately, I'm going to be under surgery shortly

-so I'll be out for about three months.

-Surgery on what?

Just a hernia. But it means that I can't physically pull a chimney down,

so I need to get employees and people I know in to do some of the stuff.

I do employ one bricklayer, so a rainy day comes along,

that we have today, he can be doing something,

rather than doing nothing and paying the man anyway.

Graham intends to remove the wall between the dining room and kitchen

to really open up the bungalow and the couple plan to add

a conservatory to make the most of the view out on to the garden.

And, Karen, are you going to be involved on a day-to-day basis?

-Yes, I'm painter-decorator, labour and gardener.

-Oh, well done.

So what are you going to do outside? You keep talking about the garden.

It seems like the garden was one of the main reasons you bought the house.

We've got three dogs, so they will love it.

-What kind of dogs have you got?

-We've got Labradors.

-Oh, great.

But the lawn isn't going to stay that large.

We are going to reduce that, have vegetables in there.

-You grow your own, do you?

-Yes.

-What the dogs don't eat, we get!

-Your dogs eat vegetables?!

-Roast potatoes, apples...beetroot.

They haven't touched the rhubarb, but most everything, yes.

MUSIC: Bad Dog No Biscuit by Daron Norwood

Well, vegetable growing for dogs, I think that's a first for me.

But, make no BONES about it,

there's a fair bit of work to be tackled here.

Fortunately, they have decided to take their time,

with the bulk of the work taking around a year and a £25,000 budget.

What's next on the agenda,

then, a year of getting this place sorted and then move in?

That is the plan.

Yes, do this one first then return to the one that we're doing now to complete.

-Well, congratulations.

-Thank you.

-We look forward to seeing how you get on.

-OK, we'll see you later!

-Thank you.

Well, Karen and Graham seem to have found the perfect property for them.

Close to where they live and with the potential to be

converted into exactly what they are looking for. But a long timescale.

I'm sure their dogs can't wait to get their paws

on those tasty vegetable treats.

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

From quaint village to bustling metropolis and London's WC1 now.

MUSIC: London Calling by The Clash

Surrounded by tube and rail stations, this area has benefited

from a huge amount of regeneration, due to the refurbishment

of St Pancras Station and the addition of its international links.

And the property we're here to see is less than a mile away.

This is a busy and noisy road, but unfortunately that is often

the price you'll pay to be in such a central London spot.

But what about the price you pay for a first floor, one-bedroom flat?

Well, the average flat costs around £540,000.

But this one had a guide price of 310,000.

I can't wait to have a look around.

Like many round here, this first floor flat is part of a large Victorian town house conversion.

The interesting thing with this flat

is I can look around the whole property by just standing here.

Bathroom through there, not huge but what you'd expect.

Kitchen, needs quite a lot of work but average space.

You've got this lounge here, lots of partition walls involved

and the bedroom, with a bed that just takes over the whole space.

I mean, you'd literally have to get like that

down the side to get into the bed.

I actually think - yeah - this was probably a studio flat

in its previous life and somebody's come along

and they've just put up all these partition walls.

I actually think it is better,

but I don't think the use of space is fantastic.

They might like to take away this wall over here and just open it up

and see the kitchen, because you've got this fantastic big window here,

with these lovely shutters, although, very noisy indeed.

You can hear London right outside there.

But a great property, but, um, yeah, a bit on the small side.

Small and noisy, but it's not just

the noise from the road you might have to concern yourself about here.

When a property is converted into flats,

it's more likely it won't have adequate soundproofing,

which means it could be subject

to that common problem of noisy neighbours,

meaning you can hear people next door, you can hear

the clippy-cloppy of people's shoes walking above, so annoying!

So, what can you do about this?

Well, options can include creating a suspended ceiling,

with insulation above it, or insulating beneath a raised floor.

As a first port of call, I would recommend consulting

a professional soundproofer, who can advise you

on the most effective course of action to take.

This is certainly a cost you should factor into your renovation,

because I think it'll be well worth it in the long run.

Since 2003, there have been regulations with regard

to sound insulation for conversions, so it's always worth checking out.

That possible issue aside, all looking good so far.

However, there is something that would affect selling this flat on,

which I haven't told you about yet.

Its lease was originally 99 years,

but that was back in September 1982,

which means it now only has 67 years remaining.

Mm, that is really bad news,

as it would immediately knock at least 10% off

the end value of the flat,

and as mortgage lenders will be more reluctant to lend,

I think it would also limit the buying market

and just make it harder to sell.

You need to speak to the freeholders to discuss the extension,

which can be time consuming and costly.

Something else you might want to raise is the communal areas,

which really are a bit dated.

It would be worth finding out

if there were any improvements planned here.

So, with a guide price of £310,000,

we invited along a local property expert

to see what they thought of the flat.

The kitchen and bathroom could be improved.

Having a very glamorous and nice bathroom,

having an attractive bathroom adds to the capital value.

A quality kitchen, especially in the size and space of the property,

would add value.

So we're both agreed - this property has potential.

But just how much could this flat be worth?

With an extended lease and a fully renovated property,

you would be able to sell it for £400,000.

So there's certainly room for profit there,

but what if it was on the rental market?

The estimated rental value of the property would be £1,650 per month.

So it might be a bit small,

but, on face value, this flat is in reasonable condition.

Don't forget it's in a convenient location - WC1.

But dig a little deeper, and it doesn't quite come up

smelling of roses due to that short lease.

I hope whoever bought this did their homework

and knew what they were taking on.

Let's find out who that was when we went to auction.

So, lot 56.

First floor flat. Shall I kick off on this...300?

Work up from 300. 300?

305?

Sorry, 305. 310?

315? 320?

325?

330?

335?

340?

New spot, 345. Well done.

350?

351?

352?

353?

352. First time.

Second time.

Third and last time. If you're all done...

Sold, 352.

Getting the flat for £352,000 was developer and architect Mario,

who came to London in the '90s from Cyprus

with a few properties already in his rental portfolio.

He's continued to add to it here,

but this is his first time developing a property in London.

He's also appeared on Greek TV to talk about property.

I can't wait to find out what he's got planned.

-Mario, congratulations.

-Thank you.

This is a very compact, bijou, small, comfortable property,

but it is in a good location.

It is in a good location. We have many offices nearby.

That is the mean reason why I decided

that the area was very interesting for me.

You've obviously walked into here with an architect's eyes.

-Oh, absolutely.

-How would you like to change this property?

Does it need changing at all?

This particular flat could have been just painted.

As it is, just a fresh coat of paint and just some touches here

and there, then that's it - you could sell it.

No, I don't want to do that. I want to enjoy myself.

I'm an architect first and foremost,

so I want to play with this toy, if you like.

Luckily it's not a very big toy to play with.

-A few little minor adjustments could make all the difference.

-They could.

I decided that instead of doing that,

I'm going to go a step further and change everything.

So the wall behind us will go,

the wall on the right will also be moved.

We're going to install a number of things.

We're going to have ceilings everywhere, change all the floors.

Mario has big plans for a little place,

including a new kitchen and bathroom.

He aims to make it hi-spec.

Something on top of his priority list

is tackling that tiny bedroom.

OK, so you are going to move this wall back so you can have...

Only about 15cm, half a foot...

so that we fit a bed.

But because of the size of the room,

then we're going to have to install his and hers doors.

So you're going to have two separate doorways

-within this one section of wall?

-That's right.

-You're going to turn the bed around.

-That's right, yes.

Whoever goes in that way gets into that side of the bed,

whoever goes in that way gets in that side of the bed.

If you didn't put two doorways in,

-they'd have to climb over the bed to get out.

-Yes.

Amazing.

-THEY LAUGH

-I love that.

OK, what about the kitchen wall?

The whole of the kitchen wall goes

and we're going to place the dining table with a lower ceiling on top,

with a specialised spotlights, LED lights for energy saving

and everything else.

Windows. It's very noisy out there,

I can hear the traffic hurtling past.

Are you going to change the window?

If we wanted to replace the whole thing,

it would be a very difficult and expensive exercise.

It's much more economical for us to install a second layer -

value for money, it's much better.

After all that, everything you're going to do to make this flat

stand out from the rest, what's the budget?

We're going to spend 45, I'm hoping, on this one.

I'm flinching, I'm flinching.

£45,000 on such a small space!

-Yes, indeed.

-Wow!

That's a lot of work and a lot of money.

Mario's given himself a timescale of only six weeks.

Are you going to sell this or let it out?

Immediately sell it.

How much do you think you might want to sell this flat on for? Go on.

Tell me how much you think you could get for a property like this,

considering the market at the moment.

-Around 500,000.

-Really?

-Mm.

So you're really pleased with the price

-that you picked this up at auction for?

-Yes.

A bit of a downside with this property -

it doesn't have a long lease.

That's probably why this went to auction in the first place.

-Are you going to renew the lease?

-No, I'm not.

So you don't think this flat would be more desirable to

sell on with a longer lease?

Oh, I definitely agree with you.

I definitely think that the longer the lease

the more appealing to the people it would be.

But, at the same time, having calculated the figures,

I'm thinking that we will have enough interest even with the shorter lease.

So you don't want to spend the money on that.

I think the money could be spent elsewhere.

OK, that's an interesting point.

Mario, it's been such a pleasure meeting you.

I am really excited to see what this flat looks like.

The end result.

-It's been fabulous meeting you.

-Come back in six weeks.

-Good luck.

Thanks.

Well, I am sure that Mario will make this flat look spectacular.

But if he doesn't extend that lease,

I can't help but think the end value will always be limited

when he comes to sell.

But I'll tell you what - I am so looking forward to seeing how

Mario's Mediterranean magic just transforms this little property.

Join me later on in the programme and you can see for yourselves.

Still to come, in Abertillery, Wales,

this damp terrace is falling to bits.

Whilst in central London, it's been hard hats all the way.

We knocked down every single wall, without any exception.

We return now to the North East of England and what was a very damp

and drizzly village of Burnhope in County Durham,

where the clouds were gathering over this rather shabby and tired

three-bed semi-detached bungalow, which was bought on auction day

for £65,500 by local couple Graeme and Karen,

who were planning on making the bungalow their home

after downsizing from their four-bedroom family house.

They had plenty of work ahead of them,

tackling a space-wasting layout.

They were also looking forward to introducing their three

Labradors to the bungalow's huge garden.

So what are you going to do outside? It seems like the garden

was one of the main reasons you bought the house.

The lawn isn't going to stay that large.

We're going to reduce that, have vegetables in there.

-You grow your own, do you?

-Yeah.

-What the dogs don't eat, we get.

-Your dogs eat vegetables?

-They do.

-Labradors that eat vegetables?

Labradors will eat anything.

Potatoes, apples...beetroot.

Haven't touched the rhubarb.

They had a 25 grand budget in mind

and thought it would take a year to do at least the bulk of the work.

Two years later, we returned.

Wow!

Well, I'd say this was definitely worth the wait.

All the waste of space this bungalow suffered from

has been cleverly reclaimed.

The old front door has gone,

and this space has been used to create a bigger front bedroom.

The way in is now at the back,

through what was the old utility area,

and now leads to a shower.

A shower at the back door? Bit odd.

That's until you discover it's a rather clever shower

for their three dogs - for those wet and muddy winter months.

Brilliant!

In you go.

I'm just so looking forward to using that for the winter

when the dogs are filthy.

Around the back, the sun is certainly shining

on this light and airy bungalow.

The conservatory is a lovely addition.

There's a very handy double garage,

and then on to that all-important garden

that's now dog and vegetable friendly.

I think we will spend most of our time in the conservatory.

It's such a lovely, bright room.

But we moved the patio door that was straight out to the garden.

We've moved that towards the middle of the room

so that it looked better putting the conservatory on.

Then you've got a better view from the living room to the conservatory.

They used the hallway space to create a huge bathroom. Terrific.

The two remaining bedrooms have had chimney breasts removed,

increasing their size.

Along with that and re-skimmed walls and a clean paint job,

they're looking far better.

I'm really impressed with the character

they've brought to this dated bungalow,

but it's been a long haul.

It was delayed by six months due to planning procedure, really.

There wasn't any problem with planning.

But it meant, as I was undergoing an operation early on,

I couldn't physically do much myself.

I was hoping to use my then employee to start the project.

Because of the six-month delay, I had to let him go.

So the project was stopped, so it stopped us for quite a while.

A knock-on effect, of course, was longer than six months

cos I had to go back to work and earn some money first.

The couple were able to get started on the garden,

and it now looks pretty established.

It does look like it's being appreciated.

In the back garden, we changed the shape,

reduced the amount of lawn - Graeme doesn't like lawn.

We've changed the back part into a vegetable garden. The dogs love it.

Yeah, but they don't distinguish between lawn,

where they're supposed to be,

and vegetables and flowers.

They'll just trample over the lot.

Graeme and Karen have done 98% of the work here,

which is no mean feat considering the scale of the jobs.

And, whilst the original time frame of one year is a distant memory,

how is the original budget of £25,000 doing?

We haven't yet paid for the underfloor heating

in the room we're standing in. A friend of mine's done that.

We're still waiting for the bill, and it's been a long time.

I don't know what that is, we can guess.

But spending wise, the receipts we have and what we've paid

added up so far -

£28,813, 5 shilling and 8p.

-SHE LAUGHS

-Approximately.

OK. So that would make a total spend,

including the original purchase price of...

£94,313, 5 shillings and 8p.

(Although, I think we can probably round it up to 95,000.)

It's made a great home for their three Labradors -

Dee, Tay and Severn - but what will their improvements mean in,

as Graeme would say, pounds shillings and pence?

We asked two local estate agents for their opinions,

starting with the agent who saw it originally.

I'm incredibly impressed with this property.

It's been a fantastic transformation.

I saw the property when it was sold at auction.

It's a completely different property now.

It's spacious, it's light, it's been modernised throughout.

It's, I think, a really good proposition.

I think the blend of modern conveniences with character

is the way forward, and I think that having things like double glazing,

gas central heating, people expect that.

But what they're looking for is a greater feel in a property.

So the exposed beams, for instance, in the ceiling,

the stonework around the fireplace and chimney, the wood burning stove.

All of that just adds a little something

that makes this property stand out.

The experts are impressed,

and even though Graeme and Karen are moving in,

this is also an investment for the future,

so they'll be interested in the rental valuations.

If the bungalow were to be put on the market to rent,

in its current condition,

I would expect it to achieve something in the region

of £500 to £525 per calendar month.

Normally, one would expect to get somewhere in the region

of £550 per calendar month.

However, looking at this, if it particularly suited somebody,

then maybe £600 per calendar month would be possible.

That top rental of £600 would mean a yield of 7.5%,

a very healthy return indeed.

-Mmm.

-We're going to be rich.

-Top banana, brilliant.

-Yes.

-Yeah.

Smiles all round, then. But what about those sales valuations?

I think if this property were to be put on the open market for sale,

in its new condition, we'd be looking at probably a price

somewhere in the region of £125,000 to £135,000.

I think the property has a value of around about £125,000.

Certainly if I was going to put it on the market today however,

I would like to speculate, and I think it deserves it.

So, I would probably speculate maybe as high as £140,000.

-Excellent, yes.

-A little bit more than you said, isn't it?

-Yes...

We were presuming 120, because it's not a highly sought-after area.

So, if we went with a middle figure of 135,000,

that would mean a potential pre-tax profit of £40,000

for this pet lover's pad.

Certainly not a profit to be sniffed at.

Nestling in the Welsh valleys,

just 60 miles north-west of Newport, is the town of Abertillery.

The name means mouth of the River Tyleri.

This place is steeped in mining history,

but the town, like many, has faced a period of decline,

and in 2003 was found to have the cheapest houses in the UK.

However, with ongoing regeneration projects,

things are on the up for the population of around 11,000.

So, a short walk from the town centre

and fairly close to a reasonably new supermarket

is a property I'm here to see.

This is it, a three-bedroom mid-terrace,

£20,000 plus was the guide price. Let's take a look.

MARTIN INHALES DEEPLY

OK, so what was on offer for the money? Well...

-MARTIN LAUGHS

-You might be quite surprised.

Because you walk in and immediately, it's not dingy, it's not dark,

it doesn't look like it's in too bad condition.

The tiles, you'd want to get rid of them.

But the basic layout is a little porch area there,

you've got your front sitting room there,

and through into this rear living room area,

gas-fire, definitely needs replacing,

but it gives a really nice open-plan feel.

This would be where the kitchen originally was, I think.

An extension has been built, which now houses the kitchen,

so, basically you've got this huge great open-plan area,

which is both surprising and really practical.

You know, this house doesn't have to do much more to impress me.

-MARTIN EXHALES DEEPLY

-Let's see what it's got.

Can this property really be so good at that £20,000 guide price?

There has to be a catch.

I'm a bit nervous about what might lurk upstairs.

Fingers crossed.

# You make me nervous Making me nervous

# You make me nervous... #

Surprisingly, up here, a bathroom,

looks in half decent condition and loo there upstairs,

you wouldn't have expected that. This isn't ideal, is it?

Right in the middle here, you've got this hot water cylinder.

Boiler in the kitchen, get rid of this,

definitely open up this area here

and then I would add space onto the bedrooms. Although they're not big,

um, but they are, two of them are actually quite small.

But, you know...

-MARTIN HUFFS

-Again, what do you expect?

Big bedroom at the front and then in here, and...

right.

Well, it's good that it's got this window light up there,

throwing lots of natural daylight into this room, that's good to see.

But what it illuminates is some serious problems.

Now, I say serious...

Obviously major damp issue.

My guess is something's happened around the chimney stack.

Maybe the lead flashing has gone,

a loose tile or some water's been coming in.

It looks on the face of it that it hasn't

gone down to the level of the joists, which would be my concern,

that's going to be expensive to sort out.

You don't know what problem that's caused in the loft.

It's going to be, my guess, really easy to fix.

The problems it's created, maybe not so.

I just knew there had to be something,

and they are rather large clues

to the issues around the possible state of the roof.

At this guide price, it was never going to be perfect,

but while this house may not have a ceiling,

it will have a ceiling price,

so expensive repairs could eat into any profit margin.

But really, I'm still not put off.

Well, out at the back of the property

and you're straight onto this little lane, which does lead to a fairly...

odd thing, which is your garden.

It's actually up those steps there.

Quite big, though, it goes all the way to the tree in the distance

and I guess, under the lane there, you could think about building

some kind of a garage.

You've already got a little coal store here.

At the back here, you can see this is one of the properties

on the street where somebody's obviously built an extension

over time and that's why it feels so big inside.

One thing you are going to have to think about doing, though,

is replacing the windows.

Yep, I think they're slightly past it.

It's always nice to have a garden, but up these narrow, steep steps,

it's pretty impractical.

It'll need a good clean up and to be made safer,

if for example a young family were to move in.

And along with those rotting windows,

it just adds to the already lengthy to-do list here.

Still, we mustn't forget that guide price of £20,000.

We've asked along a local estate agent for his opinion.

Positives of the property, it's close to the town,

close to the local bus routes,

the local train station is about three miles down the road.

Goes directly into Cardiff. A lot of people use that for work.

A short journey to Wales's capital

is a big bonus for this little property.

And with some local regeneration schemes in the pipeline,

it could make for a sound investment.

So what kind of rental yield could be expected here?

Once the property's renovated,

I would imagine we could achieve £300-£350 per calendar month.

Sales wise, once renovated,

I would imagine this property would fetch anything

from £40,000-£45,000.

So what did you expect for a house with a £20,000 plus guide price?

Something in a lot worse condition than this,

I wouldn't mind betting.

Can't go wrong, really, can you?

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

We're are offering a three-bedroom, mid-terraced house,

well-established area, starting me at 20,000, will you?

15, somebody, just to get it started.

15, make it 10, then, if you would. Thank you, I've got you 10.

At 10. 11 beyond. 12 in front. 12.

13, 14, 15, 16, 17,

18, 19, 20,

21, 22,

23, 24?

24, no.

23, then, right at the back.

Do they want to on the telephone? Otherwise, 23.

It's going to be sold.

24, thank you. New bidder, just in time.

25 now, back to you?

24 and a half, I think that is.

24 and a half. 25, where were you?

25. 25 and a half now?

25 and a half, now, will you?

Otherwise, is £25,000 on my left-hand side for the first time,

second time, third and last time at £25,000...

Yours, sir, well done.

Well, we didn't manage to catch sight of the successful bidder

in that frantic auction room.

Matt, whose previous career was in environmental health,

is now attempting a career change into property development.

With this £25,000 acquisition his latest project.

-Matt, good to meet you.

-And you.

-Congratulations.

Tell me why you wanted to buy this house.

I have been wanting to buy a house for quite some time

for the purpose of selling afterwards.

I have been a health inspector for 25 years and wanted a career change.

Health inspector? What kind of health inspector?

Safety of warehouses, inspecting restaurants and pubs.

Right. So, why a career change at this point?

I just wanted to have my own business and work for myself.

And the local government I worked for was offering

a voluntary redundancy scheme,

so I took that and I've used some of that invest into this place.

Great. So, are you local to here?

-I'm not. Berkshire, England.

-Berkshire? Yeah.

-How far away is that, then?

-It took an hour and a half.

-Oh, not too bad.

-So, not too bad if I go at the right time,

it's sort of commutable.

I hope he's factored those travelling expenses into his budget.

However, Matt does already have a rental property in nearby Newport,

so presumably he's got that sorted.

But will this be his first property for resale?

I got a buzz out of it.

I'm looking forward to seeing how it will be so different from what is now

to when it's complete.

So, tell me what you're going to do to it.

Well, quite a lot. There is a leak or two in the roof.

I've had the builders to check that.

And it looks like some reroofing work will be necessary.

Maybe bring the chimney down. Once the leaking's stopped,

I'm going to not do too much to downstairs here,

keep an open-plan format,

and upstairs increase the size of the front bedroom,

by taking out the walk-in wardrobe.

I'm going to put in a kitchen, bathroom, brand-new, modern,

-new double-glazing windows throughout.

-So what about the garden?

Cos it's quite interesting the way you access it

-across that little road.

-Yes, so there's a three-tiered garden.

It's seriously overgrown, so I'll be fencing it off, clearing it.

I want to make the top tier a car port

-to get some off-street parking going.

-Right.

And I'll landscape the garden a little bit, turf it where I can.

-Right, OK.

-And put a few trees in or bushes.

So, some big plans are afoot, then,

and Matt will be relying on local tradesmen

to do the majority of the work on the house,

all of which will have an effect on his budget.

-The budget's around £13,500.

-"Around" £13,500?

I'm kind of thinking I'll have to spend a bit more than that,

-to be honest.

-OK.

-So I can see it getting 16 quite easily.

OK. And the timescale?

-Yes, four months.

-And that's with you being here how many days a week,

-do you think?

-I would say two to three days week.

What, in your mind, do you think you might be to sell it on for?

-I would say anything from 60,000.

-Oh, OK.

Maybe top end 75, depending how well the renovation goes.

I'm concerned, given the estate agent's early estimations

of £40,000-£45,000,

that Matt is overestimating the value he can get back in a resale,

given what he might have to spend here.

But no doubt there is one thing he's not going to regret.

How about the idea of being your own boss, as well?

Yeah, well, I've got to discipline myself there, as well.

No procrastination, that sort of thing.

Yeah, I mean it should be very rewarding,

once I've got through this project.

Well, listen, congratulations.

-Good luck with it.

-Thank you very much.

-Looking forward to seeing how you get on.

-Cheers. Thank you.

So, Matt travelling a long way from his home in Berkshire

to find a property to add to his new property portfolio.

Lots of work to be done, damp to sort,

bit of interior decoration, la, la, la.

Nothing I don't think he can't cope with. How will he get on?

You can find out later in the show.

Well, things always take longer than you think.

When you're doing up property, there are always unexpected delays.

Have our buyers hit their deadlines and their budgets? Let's find out.

First up, it's WC1, in the heart of London,

where property prices can make your eyes water.

Earlier, we viewed a one-bedroom first-floor flat

in this mid-terrace building.

The interesting thing with this flat is

I can look round the whole property by just standing here.

Don't blink or you'd miss it.

Yes, it was tiny and other senses were being assaulted.

Very noisy indeed.

You can hear London right outside there.

So, small and noisy.

Who will this property appeal to?

Step up, Mario, an architect and owner of properties here and abroad.

Splurging 352,000 at auction on bijou flat didn't faze him.

This was his first development project in this country

and he had a plan.

This particular flat could have been just painted.

As it is, just a fresh coat of paint and just some touches here

and there and that's it, you could sell it. No, I don't want to do that.

I want to enjoy myself. I'm an architect first and foremost.

So I want to play with this toy, if you like.

Well, this toy was certainly going to be dressed up.

And Mario had a budget of 45 grand to spend on it in six weeks.

Three months later, it's time to see this toy unwrapped.

Just as you'd expect from an architect,

not only does it look stylish,

the space has been thought of in a very innovative way.

We knocked down every single wall, without any exception.

So we did a fair bit of work in that sense.

Having knocked down the walls in the space-restricted area,

what were the challenges facing Mario?

Some changes in the bathroom, regarding drainage,

because we've change the positions of the various units.

Changed completely the seating area,

which we integrated with the kitchen now.

And now we have a proper bedroom,

in the sense that we can actually install a bed in the bedroom.

Mario's solution for the tiny bedroom was to create two doorways,

so you could access either side of the bed, clever.

But it does eat up wall space in the living area.

I think the kitchen works very nicely,

the fact that you have the dining in-between the kitchen

and the sitting area.

I also like the fact that we've changed the central heating

and we've put it where the heat loses out, by the windows,

rather than the middle of the room, which was a total failure,

but anyway that's what people do sometimes.

We have built-in wardrobes,

which we constructed to a special size

so that it fits the walls wall-to-wall.

I think we are very happy with that, as well.

We have dropped the ceiling by seven centimetres.

And we have installed soundproofing.

We have also installed soundproofing under the floor

to be polite to the people underneath.

For such a small space, it is quite a transformation.

As an architect, how hands-on was Mario during the renovation?

I was here every single day, without any exception.

I had to run and find different materials

and different products in different shops.

Obviously, this is all new to me, at the moment.

Yes, I'm a property developer all my life, but not in London,

so having to do it in London,

you need to get to know where the shops are and what do they offer

and sometimes the same product,

there's a tremendous difference in price.

You have to be very careful with whom you use and where you shop.

So, how has all this affected his original budget of £45,000?

We've spent about £6,000 or £7,000 below what we originally planned

and I'm very happy in that sense.

An underspend?! Well, that is good news.

That means Mario has in fact spent around £38,000.

What about that tight six-week timescale?

We wanted this property to take six weeks to complete.

Unfortunately, it's taken eight weeks to complete.

I'm happy.

It could have been faster,

but sometimes in life you don't get always what you want.

One thing I wanted was for Mario to think about that short lease.

I thought he should extend it

in order to make the flat easier to sell on.

But he didn't agree. Has he changed his mind?

From the very beginning,

we didn't think that it was necessary to extend the lease,

because London is a market

where a lot of people buy properties for cash.

We're hoping that the lease is not going to be an issue.

We've discussed this with the agents that are promoting the property

at the moment and they were happy for us not to extend the lease.

Well, let's see if it might be an issue.

We invited two local property agents along to give us their thoughts.

The owner's judged the refurbishment well.

I think he's used good design touches.

However, you can lose money when you refurbish property

by going over the top

and I think that the refurbishment here is correct.

People like a refurbished property with wood floors.

He has thought about putting in fitted wardrobes

and a very nice, high-spec kitchen

which is all going to be very popular.

It does have disadvantages.

It's on a main road, you can't change or alter that.

And, with the sash windows,

it will be very difficult to provide adequate sound insulation.

The only slight drawback is that the bedroom is very small,

so it's only really going to only suit somebody as a pied a terre

or a first-time property.

The property has a short lease.

Unfortunately, it is below 80 years meaning that at the moment

only a cash buyer can purchase the property,

as you wouldn't be able to get finance or mortgage on it.

Mario bought the flat for 352,000

and his refurbishments cost 38,000

makes his total spent £390,000.

So what could the flat sell for as it stands?

Currently, with the short lease,

despite the excellent refurbishment

and the design touches that have been added,

the property has a ceiling of £400,000.

Given the lease term,

this property could achieve in the region of £400,000.

Extending the lease would greatly affect the value,

allowing people using finance and a mortgage to buy the property,

so I would say the value would be increased by about 25,000-35,000,

so with a top value of about £435,000.

If the lease was extended,

I'd expect this property to achieve £440,000.

You will please allow me to disagree.

We are selling it for much, much higher than that.

We're hoping to get £535,000.

The agent's valuations without the lease would give Mario

a pre-tax profit of £10,000.

But if Mario achieves his target of 535,000,

that would rocket to a profit of £145,000.

And, well, this is central London -

if the right customer comes along,

he might just get it.

So is Mario planning to brave the London property market again?

We have another beautiful project that we started five days ago

and we have knocked the walls down

and we are just about to start installing the new walls

and everything else.

Back now to Abertillery in Wales, where the property is larger

but the price certainly isn't.

This three-bed terrace impressed me with its spacious ground floor.

Basically, you've got this huge great open-plan area

which is both surprising and really practical.

The house was bought by Matt, who had given up his career

in environmental health for one in full-time property development.

Tell me what you're going to do to it.

Well, quite a lot.

There is a leak or two in the roof.

I've had the builders to check that

and it looks like some roofing work will be necessary.

Maybe bring the chimney down, and upstairs,

increase the size of the front bedroom

by taking out the walk-in wardrobe.

I'm going to put in a kitchen, bathroom, brand-new.

Modern. New double-glazing windows throughout.

He had a budget of £16,000 and a timescale of four months.

The plan was to sell it on, but I was worried he was setting

his sights too high for a market with a definite ceiling price.

What in your mind do you think you might be able to sell it on for?

-I would say anything from 60,000.

-OK.

Maybe topping 75, depending how well the renovation goes.

An ambitious price for the market, but Matt seemed confident.

This three-bed terrace complete with a three-tier garden

had its problems, but it also had good potential.

In fact, we've come back three months later to discover

that Matt completed the work in only four weeks

and now has an offer on the house.

All those renovations in four weeks?

Well, not quite.

Cast your eyes upwards and you'll notice some subtle differences.

I think we need to find out exactly what has been done

from the man himself.

Principally, roof work to make the property sound and rainproof,

so the chimney was taken off

and roofed over,

a new flat roof was put it, cos that was shot to pieces,

and a dormer on the rear elevation roof was removed

and replaced with a skylight.

Then there was some plastering done inside,

so some of the damaged ceilings and walls.

It's great that Matt dealt with what were big and worrying problems.

But this property is far from the big plans he had in mind.

Originally, I had the vision of doing a full renovation,

so in terms of this property, I would have continued beyond the roof work

and put in a new kitchen, for example, a modern kitchen,

bathroom, full double-glazing throughout,

flooring, paint and dec,

so, yeah, that would have taken longer and obviously cost more

and during my time here, I spoke to a number of people,

including estate agents,

and was advised that you could put it on the market

just with some structural improvements

and there is plenty of demand for houses

in that condition at that point.

I looked at the profit margin between now and after a full renovation

and it wasn't too dissimilar

and for a quick sale, I thought, "Why not?"

Listening to advice and altering plans

is an important part of successful property renovation.

And in this case, it's made perfect business for Matt

and his fledgling career.

Initially, the project was £16,000

and for that I was looking at full renovation,

but as it panned out,

with limited work being done on the place,

I only in fact spent closer to 5,000,

so...

Yeah, it worked out and I didn't have any money constraints as a result,

but it gives me more money perhaps to put into the next property.

So that £5,000 added to the £25,000 means he's invested £30,000,

a far cry from what he was planning to spend.

We invited along two local property agents

to see if Matt's change of plan will pay dividends.

The changes that I've seen

have actually enhanced the house so much so

that it now makes it more sellable

and ready for the open market.

The layout of the property is typical of houses in this area.

It's a good-sized family space upstairs with an upstairs bathroom

and downstairs will suit a lovely family.

There is a demand for properties like this at the moment,

because there is a very good market for three-bedroom houses

in Abertillery and also properties that are vacant,

so there's no chain involved,

which also appeals to a first-time buyer, so there's no problems

for them purchasing and moving in, in a realistic timescale.

Matt has invested £30,000,

£11,000 of his original budget remains unspent

and he already has an offer on the house,

so is he right to have put it on the market at this stage?

If the current owner was to put the house on the market,

I would recommend a sale price of £42,000.

I'd expect this property to achieve somewhere around £45,000.

Yeah, they sound about right,

and they're along the lines of something I had been offered.

Yeah, I'm happy with that.

So, Matt's offer is in the same ball park

as the estimate of £45,000.

That would mean a possible pre-tax profit of £15,000.

And making £15,000 in just four weeks is pretty impressive

if you ask me.

And it certainly proves that Matt was right to change plans

and scale things back.

Not bad for a newbie, Matt.

So with this successful project under his belt,

what advice would he give to any other first-time developers?

Research, research, research, plan, plan, plan,

and, mmm, go for it.

But will Matt be going for it again?

Yes, I would buy another investment property

and I'm looking as we speak,

so hoping to get another place later this month.

Well, that's it for today's show, but join us next time

when we'll have more stories from Planet Property.

-We look forward to seeing you then.

-Goodbye.

-Goodbye.