Episode 76 Homes Under the Hammer

-Hello, and welcome.

-Property developing is about

so many different things. Yes, it can be about making money,

but it's also about the satisfaction of transforming a run-down building.

Yeah, creating a project like that then means

it's not just about the damp course, the electrics, the lighting.

It's more about creating a home.

Yes, but how do you pick the property to start with?

Well, one way could be heading to your auctions.

The key to success is do your homework.

Give yourself the best chance to get the property at the best price.

And also, to plan a budget,

to make sure you've got enough money to get the job completed.

So, what inspired the bidders on today's programme?

Up first, in Edinburgh, I'm encouraging a hands-on approach.

I think she's slightly more enthusiastic than you are.

I think you've planned it all out for me already.

Whilst in Bromley, Kent, I'm hoping for hands-off.

-Please don't throw it away.

-See.

Don't put that in the skip.

In Exeter, Devon, looks like someone is going to need a helping hand.

-So you like a challenge?

-Uh, love a challenge.

-Which is just as well really.

-Yeah, have you seen the place?

-Yeah.

All these properties have been sold at auction

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

when they went under the hammer.

BANGS GAVEL All done.

I'm in Scotland's capital, Edinburgh.

A city centre with everything

from its contrasting medieval old town

with its narrow winding streets and stairwells,

to the spacious and grand architecture

of the Georgian new town.

Granton forms part of the city's waterfront

on the Firth of Forth,

and this former industrial area is undergoing regeneration,

which will hopefully mean good news for surrounding areas as well.

Well, the property I'm here to see is in the West Pilton area.

Now, many of the homes here were social housing

built in the 1930s and 1950s,

but, nowadays, many are in private ownership,

and that's certainly the case for the one I'm here to see.

A one-bedroom first-floor flat,

had a guide price of £40,000 plus.

Let's take a look.

This estate has plenty of green space -

terrific, given that the city centre is only two miles away,

and there are good bus links.

Well, whenever you're buying a flat, one of the things you want

to consider even before you look at the flat itself

is the communal areas.

What are they like? How are they being, um, maintained?

And in this instance...

..it's not the best.

So, my hope's not exactly stratospheric, er...

But let's see.

Reasonable size entrance hall there.

Your bedroom is there.

Separate bathroom there, which is quite nice.

Then down this corridor, lots of storage,

which you don't get in, hmm, every flat you visit.

Into the main living room area.

A reasonable amount of light coming in through the windows.

It doesn't look to be in too bad condition.

And there, the kitchen looking pretty good.

What a surprise.

It's a really nice flat!

# Baby, what a big surprise

# Right before my very eyes... #

The inside certainly makes up for the entrance to this property.

It's been well looked after and there's lots of space in here.

But, unfortunately, this place is let down

when we go outside again.

Well, out the back here, and once again,

this flat really is let down by the communal areas.

Not only is it the stairway there,

but this area here is like an amenity area,

and it could be absolutely lovely,

but, as you can see, it's in a bit of a state.

Clean it up, though, you know, it'll make a big difference.

One thing you can't change, though, on a positive side,

is the flat's location.

It's so close to Edinburgh city centre.

Now, there are some people whose sole investment strategy

is to invest in capital cities.

And the capital city of Scotland, no different.

You normally pay a big premium for properties in those places,

and in this case, I think this flat...

..it's a bit of a bargain.

Remember, that guide price is £40,000.

I'll repeat, it seems like a bit of a bargain.

Too good to be true?

We'll see.

What does a local estate agent think of it?

The positives in the flat are that it's bright and light.

It's spacious, there's plenty of storage

and it's got a good feel to it.

It's a good, well-designed flat.

Keeping that guide price of £40,000 in mind,

what could this flat sell for after a refurbishment?

I think, once renovated,

on the sales market, this could achieve about £45,000.

I reckon this feels like rental is the way to go,

so what could it rent for?

Once renovated, I think this property could achieve

between £450 and £500 per calendar month.

If you got it for anything like that £40,000,

and spent, say, another, oh, I don't know,

£5,000 with a basic refurbishment,

that £500 per calendar month

could mean a potential yield of nearly 14%.

Definitely not to be dismissed.

Well, after a relatively inauspicious start,

this flat has really redeemed itself,

and for that kind of guide price,

I don't think you can go far wrong.

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

Ideal buy-to-let investment.

A first-time purchase, excellent rental potential.

35, then, start me?

At £35,000, do I see a bid?

30 then. Start me somewhere, I need a bid.

Can't sell it without one.

30 here. At 30, I'm bid now in ones.

31 at the back. 32? 33...?

34? 35?

36? 37?

Shake of the head at 37.

With you at £36,000.

With you at £36,000.

First time...

New bidder, 36 and a half.

37?

37, I've got. Half?

Shake of the head. With you at £37,000. Are we done?

At £37,000 then.

First time, second time at 37.

All out. Third and final time.

37 and a quarter, I'll take it.

37 and a half?

750? Shake of the head.

With you at £37,500.

Are we done here? To sell, ladies and gentlemen.

We're in the room, he's getting it. At £37,500.

First and second time. All done, all out.

Third and final time. Are you sure?

BANGS GAVEL To you, sir. Well done.

A bid of £37,500 secured the one-bedroom flat

for Jay and girlfriend Sally.

# I'm on my way to what I want from this world... #

I met them back at West Pilton to find out their plans.

-Sally, Jay, great to meet you both.

-BOTH: Nice to meet you.

Tell me why you wanted to buy the flat.

Well, it's an investment, really.

It's the potential to maybe increase the size of it as well,

-or increase the bedrooms, potentially.

-Resize? How?

Not the size so much, but the number of bedrooms perhaps.

We're having a wee look into that and seeing what we can get done.

What was it about this particular place

that made you think this is the one to go for?

It's a great price, it's a reasonable location,

it's quite close to the centre of town

and I think the rental possibilities here

-are really quite good as well, so...

-Right...

-Just ticked a lot of boxes.

-Great.

And rental potential is something Jay knows about

as he has several other properties in his portfolio already.

I reckon he's got himself a good buy here,

and more good news,

in Scotland, properties are, generally speaking, freehold,

so no freeholder to seek permission from.

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

Well, it depends whether we can get permissions

to increase the number of rooms.

If that's not allowed, then it's just a general kind of freshen up,

but if it is allowed, then it will be a two-bedroom property

and hopefully that will increase the value

and increase the potential again soon.

So, you talk about asking permission to increase the number of bedrooms.

Who do you have to ask?

Well, it's the building warrant, so I'd have to get that all put through,

so I'd have to get an architect in to draw everything up.

-Why's that?

-Because the kitchen would be changing place

and because the bathroom would be changing,

-there has to be some building warrants to be passed.

-Right, OK.

So that's like building regulations rather than planning permission?

-There wouldn't be any planning permission.

-Yeah.

In some cases, people like one big bedroom rather than two,

but Jay isn't going to go ahead with the second bedroom

until he's done some research

on how that second room might add to the value.

Jay has 12 years' experience,

so this is easy-peasy for him.

But Sally is new to it.

This is not my background at all.

My background is nursing, so...

This is brand-new to me, I'm a complete novice.

It's all Jay's thing really.

-But I'm interested to see how it develops...

-Yeah.

-..as well, so...

Have you got a bit of an interest in property, though?

I guess so, yeah. It's just really from talking with Jay about it

-and sharing his kind of passion for it...

-Right.

-..so...

Are you going to get practically involved

-with a paintbrush in hand, or...?

-I might do.

It just depends how the budget goes.

But I try not to do that quite so much as I did in the past, it's...

-Why?

-Because I think other people are better at it than I am.

But, on top of that, I just, I like to...

-Well, you've got an apprentice here!

-Exactly, I know.

Well, perhaps we'll get the overalls on and see what we can get done.

-Absolutely, yes.

-You'll have some fun doing it.

-It would be fun to do that...

-A romantic bit of painting together.

Well, exactly, and we're not too far from here ourselves either,

so it's quite good to, you know,

we could just come down and get stuck in if we need to, so...

See. I think she's slightly more enthusiastic than you are.

I think you've planned it all out for me already.

Well, glad to be of assistance, Jay.

What kind of budget does he intend spending on the flat?

If it was to be, to keep it as a one-bedroom,

probably about 10,000 with everything that would have to get done.

If it was going to be increased,

then maybe sort of another 8,000-10,000 on top of that.

And what about timescales?

Well, hopefully within 12 weeks,

if it was going to be kept the way it was,

and then, on top of that, if it was going to be increased,

then it would just depend how long it took for everything

to come through for us to be able to start.

And then, maybe, 16 weeks or something

-with the building work that would have to get done.

-Right.

-Good stuff. Well, congratulations.

-Thank you very much.

-Good luck with it.

-Thank you very much.

-I look forward to seeing how you get on.

-Thank you very much.

Well, it certainly seems that Sally is more enthusiastic

about getting hands-on with the renovation than Jay is,

but then he's probably done a few more than she has.

It's a good flat, how will they improve it?

You can find out later in the show.

Bromley, near Penge, looks like a town with an identity crisis.

The signs tell you it's in London,

but officially, it's in Kent.

I'm in the Grove Park area, one mile from Bromley centre.

There's good commuter links to London

and lots of local amenities.

So far, I'm happy as this is a quiet, attractive street,

and the train station is literally a ten-minute walk away.

Now, the property is here.

It's a three-bed mid-terrace and it had a guide price of £225,000.

Now, I can already see that those windows,

well, they need replacing.

But it does look quite grand sitting perched up there

on that little slope, doesn't it?

Let's head inside and see what the property's really like.

You see, this is one of those houses

that I knew I was going to love once inside.

'30s houses, they're just so sociable.

This wonderful hallway here.

You've got two good-sized rooms.

But look at this.

Wow, I haven't seen one of these old phones for years!

Listen to this noise.

DIAL SWOOSHES

Hello, 7938...

Anyway, let's move on, let's look at this kitchen.

It's a bit small, quite disappointing,

but look at these original doors.

You've got a big larder there.

I mean, it's too small,

you need to think how you're going to modernise a space like this

and, um, this old lean-to.

Well, this has certainly got to go.

Look at this place.

Time has certainly stood still in this house.

And every time I see things like this,

I can't help thinking about the lives of the people

who lived here before.

Frozen in time for some 80 years.

# Oh, thanks for the memories

# And strictly entre-nous

# Darling, how are you?

# How are all those little dreams that never did come true?

# Awfully glad I met you

# Cheerio and toodle-oo

# And thank you so much. #

This house really is full of character,

and there's so many features in here that I would keep.

You've got the original Bakelites, these lovely little handles.

There's lots going on that I just love,

including this fireplace.

Now, it might not be to everybody's taste,

but I absolutely love it.

Sort of Art Deco in its style.

If you painted this,

and put a wonderful great big mirror cut to size

all the way on that back wall,

the light would flood in, it would bounce off there.

I'd even probably keep these old original tiles.

I just think, things like this, you should keep, you should restore,

and certainly not chuck in the skip.

Yes, in fact, there are several authentic fireplaces here.

Admittedly, some more appealing than others.

Upstairs, at the front of the house, you'll find this one.

Even if it's not to your taste,

I would check with the reclamation yard before just tipping it

as it might be worth, well, quite a few pennies.

The second bedroom has a rather individual decor

which may be, well, a little dark for some.

The view over the back of the house is a little brighter

and shared by the smallest of the three bedrooms,

which is a good size.

But the windows, along with the rest of the house,

look like they need some attention, as does that back garden.

Let's take a look and see what potential it holds.

Fight my way through this piece of tarpaulin

to have a good old look and see what's going on out here.

Now, at the moment, I think that's more of a lean-over than a lean-to.

And I think, if you could possibly replace it with

a single-storey really nice extension,

you could then bring the kitchen out.

It would offer so much more space,

it would add value to this property,

and really give it the wow factor it needs.

Talking of more space and adding value,

at the far end of the garden, there's a single garage,

which could offer plenty of storage space.

And the bonus is?

The garage fronts onto an access road,

but it looks like some judicious pruning is in order here.

If you would rather use that garage for storage than a car,

there could be an option.

Now, I mentioned the sloped front garden earlier.

Well, how about using THIS as a driveway,

and creating some off-street parking?

There are restrictions all along this street,

and you could never guarantee that

you could just park your car right outside your home.

Certainly not ideal if you arrived back with the kids,

it's late at night, you might have loads of shopping.

Hm, got to think about that.

It's not quite as simple as just

tearing down this front hedge and start pouring in the concrete,

as you will need to apply for planning permission

from the local council before you go ahead.

However, the precedent has already been set along this street,

and I think it would immediately enhance

the appeal and the value of this property.

Remember, if you undertake to do this,

you have two insure that your materials

are all compliant with planning regulations

designed to protect the environment from flooding.

Having a drive in front of the house may not be very pretty,

but it is practical.

In investment terms, it's probably worth doing,

as it could add thousands to the value of the house.

So, that's what I think.

But what does the local estate agent think of this property

with a guide price of 225,000?

It's a great, well-proportioned 1930s terraced property

with a huge amount of potential.

If it was my property,

I would extend out to the rear with a single-storey extension,

and put parking at the front of the property,

and then I would look to put it back on the resale market.

Hmm, seems familiar. But what about the valuation?

The auction guide price is 225,000.

Once renovated, in the current layout,

I would consider the property worth £1,250-£1,300 per calendar month.

And for resale?

Once renovated, I would value this property at £325,000

if it's kept in the current layout.

If you extend out to the rear with a kitchen-diner,

I would say £340,000-£350,000.

This property DOES need modernising, but it's a decent size,

and there are plenty of ways you could increase its value further.

And do you know what?

It just has a really nice feel to it.

I like this house.

Let's see who else agreed and saw the potential

when we went to auction.

Lot 155. Start at 200, go up from there.

Must be worth that all day long.

200 with you.

205...

If you're here, bid for it, cos otherwise...

At £200,000 it seems very low.

200,000...

205, 210...?

After a sluggish start,

the lot proves very popular with the bids,

quickly reaching 268,000.

268? 269? 270? 271?

272? 273?

Have a think. 272.

273 elsewhere?

273?

If not, 272 sitting down.

Have a go, 273?

272. First time.

Second time.

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

BANGS GAVEL Sold 272.

Sarah and her mum Lynnette look so pleased to have got

this '30s house for 50,000 over the guide price

at £272,000.

Now, Sarah runs an online business from her home in Catford,

while Lynnette is recently retired from running a care home business.

I met them back at the house to find out more.

Sarah and Lynette, lovely to meet you both today.

-Congratulations.

-BOTH: Thank you.

Now, who has bought this house, and who is it for?

-Mum's bought it.

-I've given the money!

-Your favourite.

-My favourite is her!

-It's for me.

That sounds like a great deal to me. You've done well there.

So you've bought it for yourself to live in or as an investment?

-To live in.

-To live in?

-Was that always the plan?

-No.

Initially, we went to auction to look at an investment property.

We both saw it, and thought, "Oh, that'll do nicely"

so we...decided to...get it for me.

We did a lot of research and we looked around,

and I think we noted one across the road, actually,

went for 315 last year.

We looked everywhere in Catford.

We couldn't find a house for 350.

So, that's why we've moved out a bit. So, um...yeah.

So, I think, I thought we got a bargain.

But there wasn't as much competition for this particular house, I think.

I think this is a fantastic house.

What I love about it is the character and the features.

Are you going to be true to form to its '30s character?

Are you going to sort of try and retain as much as you can?

Um, we've had a bit of a debate about the fireplaces.

Got to go!

OK, let's stop there.

Yes, I agree this one's got to go, here.

But what about that lovely one next door?

-Got to go!

-You don't like it?

-I don't like it.

-Now, do you like it?

50-50, I'm not sure.

-Please don't throw it away!

-See.

Don't put that in the skip.

Sarah and Lynette will, however, be keeping the lovely original doors.

They'll replace the old windows with double-glazed panes,

but I'm pleased to report they'll be in keeping

with the character of the house.

Are you going to improve the size of the kitchen or are you going to extend?

Thinking about it. Trying to maybe do a kitchen-diner possibly,

and possibly extend, if the budget permits.

You see, that is the cheaper option, just to knock these two walls

into one and have a kitchen-diner this way.

But, I mean, you've got that sort of lean-to out there

that's doing nothing at all.

No, possibly extend, possibly either extend or a conservatory.

It depends on the budget, how much we can...squeeze.

What's the budget? Have you given her all your money?

-Have you got anything left over?

-A little bit.

How much have you got left over to spend on the house?

30 grand, we've got to spend

with a conservatory or with a small extension as well.

-OK, so that's included in the £30,000?

-Yeah.

Because she's going to live here, we might go over slightly,

but...try not to.

I think it'll be great if you can get

-a little extension out the back there...

-Ideally.

Now, what's going to happen to your house in Catford?

Are you going to be selling that on now you've decided to live in this?

I need to sell it to give mum back her money!

-Right, so the plan didn't sort of go to plan, did it?

-No.

You wanted to buy this to do up to sell on and have as a buy-to-let,

but now you're going to keep it.

But you have to now sell your

own home you're living in to give your mum back her money.

-Yeah, basically, yeah.

-Yeah.

-How much of...

-I've given her three months to do it in as well.

My gosh, so she's really putting the time pressures on you.

-I should do it.

-She's got to do it, not should do it.

-We will do it, yes.

-Girls, good luck with this project.

I'm really excited to see what it's going to look like at the end,

and it's been fantastic talking to you.

-Well done.

-BOTH: Thank you.

Lovely meeting you.

Well, they say that home is where the heart is,

and how fantastic that Sarah just fell in love with this property,

and she can now call it her own.

But don't forget, she needs to sell her home in Catford

and pay her mum back.

Join me later on in the programme and you can find out if she manages

to complete the works within her budget

and if she gets rid of my favourite fireplace or not.

See what happens later in the programme.

Still to come, in Devon, time is of the essence.

The whole of the rear of the property...

..it might only have seconds left.

And in Bromley, Kent, a mum's work is never done.

Just keep her under control, you know, the budget.

"Oh, I must have... I want..."

Back to Scotland's capital Edinburgh now.

Earlier, I looked around a one-bedroom first-floor flat

that had a guide price of £40,000 plus.

The poor state of the outside and communal areas

had my alarm bells ringing,

but, as it happens, I shouldn't have worried.

Lots of storage, which you don't get in, hm, every flat you visit.

Into the main living room area.

A reasonable amount of light coming in through the windows.

It doesn't look to be in too bad condition.

And there, the kitchen looking pretty good. You know what?

What a surprise!

It's a really nice flat.

35 in...

It was snapped up on auction day

by property developer and local man Jay

for what seemed a bargain at 37,500.

To you, sir. Well done.

Along with girlfriend Sally,

he had some pretty big plans for this little one-bedroom flat.

-So, why have you bought it then?

-Well, it's an investment, really.

It's the potential to maybe increase the size of it as well,

-or increase the bedrooms potentially.

-Increase the size? How?

Well, not the size so much, but the number of bedrooms, perhaps.

We're having a wee look into it and seeing what we can get done.

Adding a bedroom was a great idea,

and would certainly increase the appeal of the property.

However, they would need to apply for a building warrant

before work started.

So, if they got that building warrant,

they had a timescale of 16 weeks

and a budget of 18,000-20,000.

But if they don't get their plans approved,

then it stays a one-bed with a basic refurbishment plan

with a 12-week timescale and a £10,000 budget.

It's now over a year since we last visited

and I can't wait to get inside and see what they've done.

Where once stood the bedroom next to the bathroom

is now a smart and spacious kitchen-diner

as Jay explains.

Yes, well, initially, what we did, we took down this wall here,

which is between the old bedroom and the bathroom.

And the door to the bathroom was just about here,

and the door to the bedroom was just about here.

So, that all came out.

We put a beam in and took the wall away

and got everything finished off.

And that's created a really lovely open space

with a living room and a kitchen.

The property's layout has been expertly reconfigured

allowing for, yes, you guessed it, two bedrooms.

So, this is the bedroom, the first bedroom.

And this used to be the kitchen that was laid out here,

and there used to be a wall that used to come along here

with access through a door.

We've moved that whole wall back this way

to give us plenty of room for the bedroom,

to make it a decent-sized double bedroom.

Back here was the original doorway into the living room,

and this is the second bedroom just round this way here.

By working closely with an architect,

Jay has been able to utilise every bit of floor space

to make a spacious two-bed apartment.

And one space-saving method was converting the old storage areas

into a shower room, and doing away with the larger bathroom.

However, why has all this taken over a year to complete?

The biggest challenge was really getting

the planning passed to the council.

It took a wee while, there was a few changes we had to make.

The shower room, we had to change the size of that a few times.

So, that was probably what took the longest.

But everything else went quite well, the builders were nice and quick

with the structural work

and the renovation went at a decent pace.

And I think it's turned out quite nice.

Ah-ha, waiting for permission can often involve

lots of patience and nerves of steel.

Now, one of the main difficulties

I thought this property might suffer from

was the state of the communal areas.

What's happened there?

So, when we first came to the property,

there was a lot of mess in the back garden.

Quite a lot of people were just dumping rubbish

and things like that.

So, there has been a very positive change since then, though.

There's been a community clean-up day several weeks ago

where lots of people from the community got together

and tried to clean up the mess in the gardens,

and get rid of some of the rubbish and things that had been dumped.

So, I mean, that's made a huge difference.

You can see just by looking outside that it does look a lot tidier

and it'll just be about maintaining that, really.

Sally talking like a pro there.

But this was actually her first renovation experience.

So, how did it go?

I would say it's been good to sort of support Jay through it.

There's been some times where, you know,

things weren't going as smoothly as he'd hoped,

so, from that point of view, yes, I've enjoyed it.

But, certainly in terms of the actual renovations,

I've had really no input in that at all.

Erm, after this, now that it's finished,

hoping to kind of be involved in furnishing and dressing

and things like that.

Getting it looking presentable for people coming in.

Jay plans to rent the property,

and a nicely furnished flat is always desirable.

So, with the extra bedroom added as planned,

how is the budget looking?

I think we're pretty much OK.

I think we probably spent about 19-20,000 with everything,

including fees and all of the costs.

I'll probably have to tot that up again,

but something round about that price.

So, it was within the range that I'd thought.

I'm not massively happy, I'm not massively upset.

I think we're pretty much there with the price

and it was what we projected.

So, it's taken a fraction over a year.

And, including purchase price,

Jay has invested around 57,500.

Will it be profitable, then?

We asked along two local estate agents for their opinions.

On first entering the property, I was very impressed.

It's light, airy, very fresh, and I really like the flooring.

I think changing the flat from a one-bedroom to a two-bedroom

is a good addition and a good use of space for the property.

All sounding very positive, then. But what about valuations?

I would market this property at offers around £70,000, £75,000

and we'd hope to achieve somewhere in that region.

I expect this property to achieve

somewhere between £70,000 and £75,000.

£70,000-£75,000 is exactly what we were looking for,

so I think we're really happy

with that as a final figure for the property.

Well, if they were to achieve that top estimate,

it would equate to a very impressive pre-tax profit of £17,500.

However, with Jay still keen on renting,

how will those figures stack up?

As a rental opportunity, I would say this flat would probably fetch

somewhere in the region of £650 per calendar month.

If this property was to be put on the market for rental,

I would expect it to achieve between £600 and £650 per calendar month.

We'll certainly have a think about that and maybe have a look at

remarketing it a bit higher than that, perhaps.

Both of them are fantastic figures. We're happy with both of them.

If they did get £650 per calendar month,

that would mean a yield of a whopping 13.5%,

which is hugely impressive

and justifies the decision to turn this property into a two-bed.

So, with this just the latest in a long line of renovations for Jay,

but the first for Sally, can she see a future in it?

I would like to think that I would have a bit more of a future

within property, especially since it's something that

Jay's so passionate about.

It's given me a taster so we'll see what the future holds.

I am in the beautiful South West - the city of Exeter, to be precise -

with, amongst other things, its magnificent cathedral.

Let's hope the property I'm here to see is just as impressive.

This lovely Roman-walled city is a delight to spend time in

with its eclectic mix of the ancient and the modern.

Little wonder, then, that this city is a real draw for tourists,

commuters and students.

Well, just a couple of minutes' drive from Exeter city centre

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

It's a five-bedroom Victorian mid-terrace -

a really substantial property.

But the guide price was just £80,000-£100,000.

Something is not stacking up.

'Perhaps the junk out here is a clue.'

Hmm, bit of a shabby front door. Never a good start.

But let's focus on the layout. Straight through here.

Nice to have this little entry area

and possibly these could be stripped back,

so some original features.

Pretty standard layout for this kind of property.

A front living room there with a bay window, which is good.

Stairs up to your bedrooms. A rear living area there.

And then...

..oh, dear.

I think I'm going to need this.

Head through to that part of the property

and it starts to get really seriously bad.

I don't know what you can see from this point, but to be fair,

I'm not even confident enough to go through there.

I think that looks extremely dicey.

What I'm looking at is bits of wood holding up the ceiling.

You can see that the joists from the upstairs rooms

are not actually going into the wall there.

Just something tells me that's bad.

Now, this is a really important point.

If you are looking round auction properties before the auction,

some of them will be in a really bad state.

Now, it should be made clear to you that that is the case,

but to be on the safe side, you should always carry a hard hat

and other protective gear, such as really good shoes with you

when you're going to look round properties

which could be anywhere near kind of dangerous.

Cos you know what?

You do not want to take any risks when it comes to safety.

# But there's nothing wrong with a hard hat and a hammer

# God bless the working man. #

We'll keep a safe distance in this one,

as it looks like the load-bearing walls at the back of the property,

where there is a third living space, are unsound.

The bathroom is at the very back of the house

and you can get a peek at the kitchen

through the serving hatch from the second living room.

And from the outside of the property,

you can get a glimpse of the challenges ahead.

"Dare I travel upstairs?" I ask myself...

HE EXHALES

Wow. I didn't think it could get much worse...

..but it obviously can.

If you look in here...

Oh, my goodness me.

There's a massive gap in between the bricks

at the rear part of the house and the front part of the house.

It's almost like the whole of the rear of the property...

..well...

..it might only have seconds left.

No, joking apart, that is a serious problem.

Not only is it dangerous to actually see this,

but somebody, when they take this place on...

..has got a lot of work to do to put that right.

HE LAUGHS NERVOUSLY

According to the drawings,

there is a good-sized bedroom at the back here in the danger zone.

There are another three bedrooms, which, thankfully, look safe.

The auction catalogue does say there are five bedrooms

and I reckon one of the reception rooms downstairs

might have been used as such.

It would appear this house was once upon a time

rented out on a room-by-room basis.

'Time to go to the top floor and see what I can safely check out there.'

Well, apart from the incredibly dangerous stairs to get up here,

when you actually arrive up here,

you notice there's another small problem.

Just as well I wore the hat.

There are obviously rules and regulations

when it comes to attic rooms.

The steepness of the stairs, for a start.

That dreadful situation at the bottom,

where if you fell down those stairs,

you'd carry on down the main flight of stairs as well.

And then there needs to be a certain amount - a percentage -

of the room which has roof height higher than an average person.

This clearly has not been done

within building regulations approval.

At least you don't feel like this bit of the house

is going to fall down any minute.

And joy of joys, at least there is an en suite.

Ha! I wish. It really is in a terrible state.

I believe planning was granted to demolish the rear of this house

because of subsidence.

So, decision one - knock it down or rebuild it?

To answer that, my first investment

would be in a full structural survey.

This lot is scary on many levels.

It's hard hat time for the agent who sold it. What can he tell us?

Is there hope beyond the serious structural issues here?

Once the property has addressed the structural issues

and it's been refurbished,

you could either run this as a house with multiple occupancy,

which will mean that you can do room-by-room letting for students

or for your assured shorthold tenancies.

The other, of course, is just keeping it as a large family home.

Assuming you went for that single-house option,

what could this lot, guided at £80,000-£100,000,

be worth on the open market?

Once this property is refurbished to a reasonable standard

with the bathroom moved to the first floor

creating a three-bedroom home, you could put it on the market

for somewhere in the region of £180,000-£185,000.

If they actually convert the attic room,

that may move the price upwards slightly,

but it'll certainly make it more saleable.

The agent thinks, as a house of that size,

it could rent for £750-£800 per calendar month.

But a house with five bedrooms does offer another interesting option.

If the property was converted into a house with multiple occupancy,

then I would expect to achieve £80 per calendar week per room

and of course, there's five rooms

so, you know, that's going to be £1,600 per calendar month.

Well, it's a very attractive guide price

for a substantial house so well located close to Exeter.

However, I hope to goodness

that whoever bought it looked at it beforehand

because now you'll know why the guide price was so low.

Let's go to the auction.

Lot 124. So, we're down to Exeter. Two-storey.

It's got five beds. It's four on the first floor.

You've got another bedroom on the ground floor.

Who's going to kick us off, then? We've had lots of interest.

Won't go any lower than 80. Two people.

I'll take the left-hand person. 80. We're away.

I saw the gentleman there. 82? I'll take 84, sir.

84, he goes. 84.

At 84. 86.

Sat down. 88, he goes. At 88.

89. You're in, sir. Back right. New face at 89,000.

90 on the telephone. You saw it.

On the telephone, we have a bid of 90. 91, he goes.

The bidding started slowly, but then things began to hot up

between a bidder in the room and a bidder on the phone.

We rejoin the action at £124,000.

124. That telephone bidder has it. At 124, then.

You're out at the back left at the moment?

124 on the telephone for the first time.

You're out, sir? Back right? 124. First, second...

Ooh!

She's thinking, "What a rotter!"

But, yeah, 124. Straight back at you. 126.

Shake of the head, look at the floor - not a good sign.

126, you're in. On the telephone has it at 126,000.

For the first time at 126,000.

For the second - £126,000.

Third and final time, selling at £126,000.

GAVEL BANGS Congratulations.

That successful bidder on the other end of the phone

paying £126,000 was Dave.

He's a builder and lives with his wife Zelda in Devon.

I met up with him back in the safety of the front living room

to find out his plans for this property.

Dave, good to meet you.

-Martin, yeah.

-Congratulations.

Thanks very much.

-You were the mystery telephone bidder.

-I was, yes.

-How come?

-I was, at the time, working on my roof.

Too busy to go to the auction cos you were roofing your house?

That's right, yeah.

I presume you got off the roof while you were making the phone call?

-I did, yeah, yeah.

-You were on a roof.

Does that mean A, you're a roofer or B, an enthusiastic DIYer?

-I am a sort of self builder.

-Oh.

Been building on and off for sort of 15, 20 years.

We purchased an auction property last year,

which is a sort of total build - total rebuild, plus extension.

-So, you like a challenge?

-Love a challenge.

-Which is just as well, really.

-Yeah.

-Have you seen the place?

-Yeah. Yeah, it needs a bit of work.

-I have plenty of experience of Victorian terraces.

-Right.

So, the structural issues don't worry you, then?

Not adversely, no.

Um, it's amazing what you can do with a bit of brick and mortar

and steel and epoxy resin and timber. Yeah.

Blimey! Dave makes it sound easy.

Dave's plan is to begin building a portfolio

by rebuilding this house into an HMO.

So, where to start?

I think I've got to repair what has been done to it, first and foremost.

Um, reinstate the structural fabric of it

and then try and make a bit more of an open-plan

living/kitchen/dining area at the back there.

Try and gain retrospective building regs for the attic

and maybe just create

a couple of slightly bigger bedrooms upstairs with a shower room,

as there's already a downstairs bathroom.

Until Dave receives the structural surveyor's report,

he won't know the potential cost of repairing the damage here.

He set an initial budget of £30,000

and hopes to have the work completed in six months

using professional tradesmen when needed

and doing a lot of the work himself.

Been sort of doing this for about a year now.

-Prior to that, I was a landscape architect.

-Oh, wow.

And for sort of four, five years, got chartered and qualified

-and found that I wanted to get back into building again.

-Good.

-Well, listen, congratulations.

-Thanks very much.

-Good luck with it.

-Yeah.

-Look forward to seeing how you get on.

-Yeah, cheers, Martin.

Well, there you go.

Dave doesn't seem to be too fazed by the challenges ahead,

but I do wonder - are we in the same house?

HE LAUGHS

I think he might have underestimated

quite how much effort that is going to take to put right.

You can find out how he gets on...

..later in the show.

Well, that's one property done and dusted, Lucy.

-But what about the other two?

-Yes.

Did they get it done on time and for the right money? Let's find out.

# Remember the old days? #

It's time to head back to Bromley in Kent,

where earlier, we met Sarah and her mum Lynette,

who had purchased this attractive, 1930s,

three-bed terrace house for £272,000.

Once renovated, it was going to become Sarah's new home.

'I love this architectural period

'and this one had tons of interesting, original features.

'Some needed to go...

'..and some, I really wanted to stay.'

I just think things like this, you should keep,

you should restore and certainly not chuck in the skip.

Oh, yes!

I fell in love with that fireplace,

so I was hoping Sarah and Lynette would carry out

a sympathetic renovation.

Please don't throw it away!

-See?

-Don't put that in the skip.

Lynette, with so many years of business acumen behind her,

was going to act as adviser,

but more importantly, financier for this project.

-Who has bought this house and who is it for?

-Who's bought it?

-Mum's bought it.

-I've given the money.

-You've paid for it?

-I've paid for it.

-It's for me.

That sounds like a great deal to me! You've done well there.

# All you can do is step back in time... #

But that finance deal, along with the renovation budget of £30,000,

wasn't a long-term loan.

Mum was looking for her money back tout suite.

So, did Sarah keep to her side of the deal

and has it been payback time for mum Lynette?

Has the three-month deadline been met?

Well, nine months later, we return to this '30s house

to find out if Sarah has a home.

Well, there's no doubt about it,

it is nearly there with a fantastic modern kitchen.

And look at this. Lean-to, be gone!

Hello, kitchen extension!

Wow. The ground floor has been opened up

with the removal of the kitchen wall into the dining room

and together with that new extension,

has created a fantastic, open-plan space.

We blocked up the kitchen doorway

and took away this wall,

so we've had a through kitchen/dining room.

We've also added a nice sun lounge, which is really quite lovely.

When the sun is shining, it really lightens the whole area.

In terms of the kitchen, I've done the tiling. Wow!

Sarah chose the colours, so it looks really nice

and we've got the quarry tiles, which are the original.

We're hoping to keep those

if we can clean them up and get some spare ones.

We've got quite a bit of work to do in here still.

We've got to do the flooring, all the skirting boards

and then the last-minute touch-ups.

So, we're quite looking forward to getting it done

and getting Sarah in.

The windows were in a bad state

and have been replaced with sympathetic double glazing.

And what about that Deco fireplace I adored?

Well, I'm very sad to report it's gone,

but it has been replaced by a rather nice traditional fireplace.

We ummed and ahhed about whether to try and keep the fireplace,

paint the fireplace, change parts of the fireplace.

In the end, we decided on a new fireplace,

so we went for a new one.

-In the front room.

-In the front room, yeah.

Upstairs, the three bedrooms have been completely redecorated

and carpeted.

Nothing too fancy, just clean and simple.

A new bathroom suite completes the upstairs transformation.

In addition to the double glazing,

the house has been completely rewired

and a new central heating system installed.

But it hasn't all been plain sailing.

The original timescale of three months almost trebled to nine!

The surveyor, the architect, he was quite quick,

but we had toed and froed

-between him and the council a bit, didn't we?

-Yeah.

The council then had to come and check the work was done

when the chimneybreast and the wall was taken down.

So, that held us up a bit.

But mainly, it was the builders and waiting for them to turn up

-when they said they would.

-SHE LAUGHS

And doing what they said they were going to do.

Yeah, so, that took a long time.

Different sets of builders as well, wasn't it?

-Four sets of builders.

-Yeah.

It's not just time they've gone over.

The budget has climbed to £50,000

because of having to replace rotten floorboards

and that sunroom cost more than they intended.

This is going to be Sarah's new home,

so what do the agents make of it?

First, the estate agent who saw it originally.

They've made some fantastic changes to the property

and it's an ideal family home.

I particularly like the new kitchen

and sun lounge at the back of the house.

That gives the house a very spacious feel to it.

There's no doubt about it, it looks terrific,

but Sarah has gone over her budget and her total spend is now £322,000.

With that in mind, what could the house fetch on the open market?

I would suggest marketing the property at £370,000.

Once finished, I would suggest putting the property onto the market

at an asking price in the region of £360,000.

-Sounds about right, yeah.

-Yeah, that's about what we thought.

-I said about £370,000-£380,000.

-I thought £350,000-£370,000.

-Yeah, so, yeah, that's good.

-Yeah, about right.

That top valuation of £370,000 would mean a pre-tax profit of £48,000.

Very good indeed and to top it all,

Lynette was paid back a week after filming.

So, does the Bank of Mum have some cautionary advice?

Just keep her under control, you know, the budget.

"Oh, I must have! I want!"

Fireplaces that cost a fortune. "No, remember the budget!"

Just got to keep them in check, that's all.

We return to the South West now

and the lovely city of Exeter, where earlier,

I looked around this five-bedroom, Victorian mid-terrace property

that had a suspiciously low guide price

of just £80,000-£100,000.

And unfortunately, once I stepped inside,

I found out why.

Head through to that part of the property

and it starts to get really seriously bad.

I don't know what you can see from this point.

What I'm looking at is bits of wood holding up the ceiling.

You can see that the joists from the upstairs rooms

are not actually going into the wall there.

And it didn't get much better upstairs,

where more very worrying signs presented themselves.

There's a massive gap in between the bricks

at the rear part of the house and the front part of the house.

It's almost like the whole of the rear of the property...

..well...

..it might only have seconds left.

To say the least, the house was looking structurally unsound

and to top it off, literally,

a converted attic space with dubious stairs and no headroom,

which was clearly done outside of building regulations

and would have to be redone if you wanted to keep it.

Step up, Devon-based builder Dave, who paid £126,000 on auction day

and despite the state of the property,

he wasn't sounding too worried at all.

So, the structural issues don't worry you, then?

Not adversely, no.

Um, it's amazing what you can do with a bit of brick and mortar

and steel and epoxy resin and timber. Yeah.

He made it sound so easy and with that can-do attitude,

he planned to create a House of Multiple Occupancy or an HMO

and rent out the rooms individually.

And to do that, he'd given himself six months and a £30,000 budget.

26 months later, Dave is still working on the property,

but what a difference.

Dave has turned his plans, and this building, around.

Instead of an HMO, he has two flats.

The ground floor one is a one-bedroom flat

with a lovely bay-fronted bedroom...

..while the other original living spaces on the ground floor

now flow well from the living room to dining space to kitchen...

..with the bathroom still at the back of the property.

I think he's used the space really well,

but it took a lot of work to get here.

Um, well, this is the area of major renovation.

The existing opening into the kitchen,

over there, was about this wide.

All that was supporting the first floor

was a couple of lengths of timber.

So, all that came out.

The first floor was replaced and we've rebuilt

from the new underpinning all the way up to the roof.

In fact, Dave has worked closely with Building Control

to get this property safe, which has meant underpinning work.

He had to dig down six feet to find firm ground for the foundations.

The upstairs flat is no longer a danger zone.

It's been transformed and is now really spacious.

Although this has been planned as a living room,

it's a pretty flexible space...

..while the two original front bedrooms have become

a lovely, light and bright open-plan kitchen and dining space.

And what was previously a third front bedroom

has become a contemporary-style bathroom.

So, what's now at the top of these stairs,

which have been turned from terrifying to terrific?

Well, now they lead to...

..a great-sized, airy bedroom.

Dave has done a mountain of work,

but why did he decide to go for two flats

instead of his original HMO plan?

Talking to a few people, neighbours and other sort of letting agents,

I sort of decided that I'd put in permission to convert to two flats,

as it would add more value to the building

and hopefully be easier to let out.

I'm quite pleased with the way that the flats have come together.

The layout seems to work and I've got quite a lot of usable space

and I've just tried to make the most of the rooms, really.

Reconfiguration and cosmetic changes were way down the pecking order.

This project was always about its structural state.

With the underpinning, my building inspector -

I became quite familiar with him over a number of weeks -

he wanted to see every one-metre section

before I poured concrete in, much like sort of foundations work.

They're very keen to see what it's actually bearing on.

Um, and he gave me a lot of good advice

and was pretty helpful.

Dave has spent his £30,000 budget

and reckons up to £3,000 will finish it.

Assuming that's the case,

he will have invested £159,000 in total.

We asked two local estate agents along to have a look.

First, the agent who saw it in its previous dangerous state.

So far, the owners have done actually a pretty good job.

The architraves have been changed.

A lot of the carpentry skill seems to be quite a high standard.

Hopefully, it'll continue in that vein

and should make a really good job of them.

I can't fault the decisions they've made in terms of the layout.

They've been very clever, especially having that big extra room

at the very, very top.

It's smart. They've made use of absolutely all the space.

So, let's talk valuations.

If the ground floor flat was put on the open market,

you should look to achieve somewhere in the region of £110,000-£120,000.

You'd be looking at the ground floor apartment

in the current open market, £130,000.

Well, the ground floor flat -

I was thinking around £120,000, so, sort of averaged out...

That sounds about right.

And both agents valued the upper flat at around £130,000.

But although Dave was advised by Planning

that the upstairs flat couldn't be regarded as a two-bed flat,

the agents think they could market and sell it as such

with the living room becoming a bedroom.

So, with these two valuations of £130,000 for each flat,

that would mean a huge pre-tax profit of £101,000.

However, it's still the rental that Dave is interested in,

so both agents gave a top valuation

of £575 per calendar month for the ground floor flat.

And for the top floor flat, they both agreed a rental

of £600 per calendar month,

which would mean a possible yield of just under 9%.

So, with this tricky project behind him, would he do it again?

No definite plans.

We'll rent these out for a few months

and then hopefully, I'll be back in the auction room.

Well, that's it for today's show, but we'll have more properties

that were bought at auction for you next time,

here, on Homes Under The Hammer.

-From Martin and me, it's goodbye.

-Goodbye.