Episode 9 Homes Under the Hammer

Hello and welcome to the show.

Property can be the best investment you will ever make,

as long as you buy right.

But where can you buy lots of good value

and intriguing properties for sale?

At an auction, of course.

Whether you are buying a property as a home or an investment,

you will want to make sure you get a good deal.

So the question is, did today's buyers on the show do just that?

Well, let's find out what they bought.

In Harrow, this tunnel has a bit of mystery and imagination about it.

I don't know what you could do with this.

Hello-o-o!

In Tyne and Wear, the mystery is, why so cheap?

£15,000. Yes, one, five.

Wow!

Whilst in Stoke, there is no mystery about why Bassam bought this three-bed semi.

What was it about this house that appealed?

It's the garden.

All these properties have been sold at auction.

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

when they went under the hammer.

Bought it!

Harrow in north-west London is a large

and bustling multicultural area and includes a town centre with plenty

of shops, green spaces like this, great schools,

and singer James Blunt was even educated here.

Will I be singing the praises of today's property? I aim to find out.

Well, the park is beautiful, so that's a good start

and from Harrow on the Hill train station you can take the

under or overground and be in central London in just 20 minutes.

One and a half miles from central Harrow is today's first auction lot.

Along this lovely road is the flat I am here to see today.

It is a one-bedder and it's on the top floor of a three-storey semi.

Now, it had a guide price of £80,000.

When I tell you that the two-bed ground floor flat here

sold for £245,000 back in 2007,

well, this sounds like it could be good value for money.

Or is there something rather sinister lurking inside?

Let's take a closer look and find out.

# We can't go on together

# With suspicious minds. #

You might think I am being a bit suspicious

and yes, the ground floor does have one more bedroom and outdoor space.

Could that explain all of the £165,000 difference?

The property market has gone through a few changes since 2007 too,

but it's still making me pause for thought.

As are the stairs to the top floor!

There is no getting away from it. It's quite high up.

There are a lot of stairs to climb

and we are right in the roof of the house.

So let's have a look around.

It's a bit on the small size, I'd say.

You've got a rather smallish bedroom there with windows that need replacing.

But this is your central living area.

So, not much of a kitchen. Not a huge space. Signs of damp.

I actually think this might have been a studio flat at one point

that somebody has tried to convert.

Through there we've got the loo, a shower, no bath.

And something through here. What's this? A little black tunnel.

I don't know what you could do with this. Hello-o-o-o!

# Hello

# Is it me you're looking for? #

Sorry, I'm afraid not, Lionel.

What I'm looking for is ways to improve this flat.

Being in the eaves means options for juggling the space are limited.

Some stud walls have reduced the pitch a bit,

but it does mean waste of spaces like that tunnel.

It all needs a good rethink.

But with a new kitchen and bathroom and materials all needed,

there is one thing on my mind.

Yes, the top floor location of this flat does mean more stairs to climb,

which is not ideal for transporting building materials.

You've got to think about all the furniture.

Although it will save you money on your gym membership!

But it also has its perks because you've got better views,

the flat feels safer and more secure and don't forget, heat rises,

so it will be warmer than its neighbours downstairs.

# Keep, keep, keep warm

# Keep, keep warm

# Keep, keep, keep warm

# One, two, three, four. #

Certainly, any money saved on energy bills might mean money for redecoration.

Goodbye, woodchip!

There's also bits of damp that need attending to.

The faults may not be big, but the bill to renovate might well be.

Now, if you buy this property for £80,000,

spent 20 grand on the renovations, rent for £850 per calendar month,

that would give you an impressive rental yield of 10%.

It sounds like a worthy investment to me.

And I know there's plenty of rental demand in this area,

so I'm sure it will be snapped up once it's had a face-lift.

It all sounds pretty positive so far, doesn't it?

Well, let's not get too carried away just yet.

There's a little niggle I just have to get off my chest and tell you about.

This flat only has 70 years left on its lease.

Now, that might not sound too short, but it still means that fewer

mortgage companies will be willing to lend.

And there will be higher interest rates from those who do.

Now, you need to speak to the freeholder to discuss the lease extension,

which could be both time-consuming and costly.

Don't delay, though, because the shorter it is, the more expensive it will be to extend it.

This is due to something called marriage value.

The cost of the lease extension rises as the lease length shortens

and could easily cost thousands of pounds to renew.

We invited a local estate agent to the heights

of this property in Harrow, guided at £80,000.

I think this property would be an ideal purchase

for first-time buyers or an investment.

It would rent out very easily here

and for a first-time buyer, it's a great way to get on the ladder.

We already know the flat could rent for £850 per calendar month,

but what about the option of reselling?

Once this property is renovated with a short lease, as it remains at the moment,

I would expect this property to achieve around about the £165,000 mark.

Once the work is done, there is a real opportunity to make a decent profit from this property.

But don't forget, it will be trickier to find a buyer with that short lease.

Would getting it extended lead to healthier profits?

If this property was to be sold with an extended lease, then I would

expect this property to achieve around about the £175,000 mark.

This small flat is not without its issues,

that short lease being the first of them.

But this is a convenient location

and with that £80,000 guide price, I think there's money to be made here.

Let's find out who agreed when it went to auction.

This is lot 111.

Who would like to get me started on this? 80,000 anywhere?

Thank you. 80, I've got. 81, sir? 81, thank you. 82?

85 if you want. 86.

86. 87.

88.

89. 90,000.

91. 92. 93. 94.

94. 95. 96?

No?

96. 97.

98. 99.

100,000.

If not, 99 for the first.

99 for the second.

99 for the third and final time. We are all done.

Can't quite sell it. We have to withdraw that, I'm afraid.

So this lot didn't sell in the auction room,

but Conor on the right, who is a carpenter,

and Daniel, an electrician, made a further offer of £101,000

after the auction, which was accepted.

They've bought the flat together with plasterer friend Paul, in the middle.

These three all live locally

and have to be the development dream team with all those skills.

They've all put their jobs on hold to get to grips with this,

their first property venture.

Guys, congratulations.

-Was this the one you wanted to bid for on auction day?

-No.

Originally, we looked at a block of around 200 properties

and singled out three we would be interested in bidding on.

We had a gold, silver and a bronze.

The gold one ended up going for a lot higher than what we had allowed to pay for it

when you included all the other costs.

So we had to settle for silver.

# Hi Ho Silver

# Here come the Lone Ranger

# He's riding on down... #

As silver medals go, this one could be rescued and turned into gold,

and I think Conor, Paul and Daniel might just be the right lads to do it.

We've all worked in the construction industry for quite a while now.

Between all of us, we are at a level where we can do the work ourselves.

We shouldn't really need to bring in too much outside help.

-We should be able to do it on our own, hopefully.

-How fit are you guys?

There is a lot of material that needs to be lugged up and down those stairs.

Carrying things up and down stairs is sort of what I do!

-You are used to it.

-He's the youngest bloke as well.

-He gets all the good stuff.

-Are you the fittest?

-I don't know. We'll find out.

If I go past Daniel when he's halfway up the stairs saying, "Just leave me!"

We'll find out.

# Nothing but a silver medal will do. #

This project won't be a sprint, that's for sure.

So a real test of their physical, not to mention friendship endurance.

Their plan is to get this done, sell it on and then take on something else.

But first things first. Where can you put up a stud wall?

How can you make more space out of this?

We are thinking about whacking one through here, carrying this on.

The bathroom at the moment is tiny. It is 2 metres squared or something.

If we carry this all down and maybe lose this wall back here,

that will open up this space, give this space here

and then we can think about the bedroom in here as well.

Possibly then a stud wall through here to create a separate bedroom.

That would then leave an incredibly small living area.

Yes. It would have to be a living kitchen

and possibly a kitchen diner with a telly in it.

We're not too sure how to lay it out yet.

How much are you hoping to spend here?

We have budgeted for materials, about £15,000,

leaving something like a 10% contingency in there.

The labour then is roughly the same but it's us,

so we'll wait until the end probably before we see the return proper.

Another issue you are going to have is that the lease,

because it's only 70 years. So what do you plan on doing about that?

We did think about that and looked at it but we are obviously going to

have to speak to the freeholder and see if he's willing to extend it.

If he is, that is one thing we will be doing.

Have you thought about how much it might cost you out of your budget?

I think some of it will come out of it but it just depends.

If we can get it, it will be more desirable and it'll be worth more money.

Good luck with this project. It's going to be really exciting.

I can't wait see what you do. Well done. Congratulations. Thank you.

It's a great start that Conor, Paul and Daniel each have useful

trades that they can use for their first project together.

But they need to address that short lease before they are upgraded

to a gold medal for their efforts here.

Join me later in the show and you can find out

if they are still friends at the end of it all.

From gold to precious coal.

Houghton-Le-Spring is a former coal-mining town in County Durham.

With the cities of both Durham

and Sunderland only a few miles away, this town makes a popular

location for commuters looking for more affordable property.

Every autumn the town comes alive for 10 days with fireworks, illuminations, events

and the traditional roasting of the ox,

which is all part of the famous Houghton Feast,

an ancient festival dating from the 12th century

as a dedication to the local parish church.

I can't wait to feast my eyes on the property I'm here to see.

It certainly sounds good. A three-bedroom mid-terrace.

It had a guide price, wait for it, of £15,000.

Yes, one, five. Wow!

Yes, wow! I'll say it again. A guide price of £15,000.

Straightaway, I've definitely been in worse places.

You know, 15 grand, that's just incredible.

I like this design feature.

It looks like it was once an under stairs cupboard.

It has in fact gone.

Clearly, somebody has had a good go at clearing it out and it's left...

..a good sized space.

I even like this. The old sliding doors. Very '60s.

But it works.

Separating a front living room area there, which is a nice size,

from a rear living room area here.

Open fire.

Well, ish!

Upstairs to your bedrooms and through to the kitchen. Bingo!

Similarly, it is a good size in here.

The only thing missing is a kitchen!

Again, somebody doing a lot of the hard work

and getting everything out ready for the renovation.

Typical of this kind of design of property in this part of the country,

the toilet at the end there so it's at the end of the kitchen.

In an ideal world you would like that to be upstairs,

but I think if it means losing a bedroom, don't do it.

All in all, a very, very good start.

# I want to be adored. #

There's clearly a lot of work to do and we are only downstairs,

but I've seen worse.

And at that £15,000 guide price, in the right hands,

this could be a little gold mine.

Upstairs then. Quite a lot of space like downstairs.

A good double bedroom there. Single bedroom there.

Fairly antiquated electrics.

OK, so we need to factor in replacing that for sure.

But lots of space. And equally in this rear bedroom. A good size.

Now, it's very interesting that it's been sort of partly stripped back

because it gives you a real good canvas to work on

and you've got to decide before you do anything what you are going to use this place for.

If it's for you to live in, basically you can do what you want.

If you are looking at renting it out or moving on,

you've got to kind of stick to the basics.

Don't spend too much money, don't personalise it too much,

keep it simple, keep it clean

and create something that people can put their own stamp on.

This is a classic rental and the market is pretty vibrant.

Of course, it could also make a great starter home for someone.

It's spacious, has three good-sized bedrooms

and did I mention that guide price of 15 grand?

I did? What's not to like?

# I'm Mr Brightside. #

At the back of the property you've got this little yard area.

You can also see... I reckon this house bears very little resemblance

to what it was like when it was built.

It looks like there's been an extension up there.

This whole kitchen and bathroom area is an extension.

Looking around, some people have created a second story on there.

That would give you a lot of extra space.

But also when you come out here, you see,

like the rest of the place, it needs a bit of sorting out.

Potential then for an extension but there is a lot of work to do here,

so you might want to choose your battles.

I reckon, to get this up to scratch

you are looking at between £10,000 and £15,000.

But at a guide price of just £15,000, that doesn't seem too bad.

Let's find out the thoughts of a local property expert.

Houghton-Le-Spring is quite a pleasant town

and very good for commuting.

The A690 is close by which take you to Durham, Sunderland and beyond.

To maximise the value of the property, I would probably leave the layout as it is currently

with the kitchen and bathroom to the ground floor so you don't have

to go to great expenditure with an extension and huge layout changes.

When refurbished, I would recommend an asking price of around £80,000.

A simple refurbishment recommended, then.

What if the buyer did have an extension and shuffled things about, though?

If you add an extension and move the bathroom to the first floor

and retain the same good size bedrooms upstairs, I would

probably recommend an asking price of between £85,000 and £90,000.

Those figures mean there would be no point in spending money

on an extension if you wanted to sell on.

I think this house is all about rental potential myself.

Once completed, I would probably recommend between £475 and £500 per calendar month.

And with an extension?

I don't believe that the rental figure would change

if an extension was added to the property.

It is a pretty stonking house for the money, don't you think?

Good location. Yes, lots of space.

For anything like that guide price, an absolute snip.

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

It's a large style three-bedroom house. Anybody at £15,000?

Gentleman standing. £15,000. Do I have 16 anywhere else?

I've got one bid at £15,000. 16, sitting down. 17. 17, bid. 18.

At 17,000. 18 anywhere else? 18, standing. 19?

I'm here on the left-hand side at £19,000. Do I have 20 anywhere else?

21. On the telephone at 21,000. We are selling.

Do I have 23 anywhere else? 23, standing. 25.

It's against you. The lady at 23,000.

Not surprisingly, that low guide price of 15 grand had raised lots of interest.

But it was quickly left far behind.

We rejoin the bidding at 37,000.

37. 37. 38.

38, bid. 39? I'm here in the room at £38,000. I'm going once at 38.

I'm going for the second time. At £38,000.

39. 40.

40,000, bid.

# Back to life, back to reality... #

Well, even at 40,000, I still think that property was a steal.

The successful bidder was June, an experienced property developer

who with her husband John has renovated

over 50 properties.

June, good to meet you.

-Hello.

-Congratulations.

-Thank you very much.

Tell me why you wanted to buy this place?

It was something that you couldn't not buy.

Brilliant guide price, good area.

-Great rental potential.

-Had to be done.

-The guide price was 15, wasn't it?

-It was.

-And you bought it for 40.

-Yes.

-So, not quite the bargain that 15 would've been.

-No.

-But still pretty good.

It was never going to go for 15. With the amount of interest, it was always

going to go for between 35 and 45.

-40 was my maximum.

-Right. That was it?

-That was it.

-And you did a bit of sneaky bidding, didn't you?

-Yes.

Tell me your technique?

You always wait until the very end.

Wait until the end, until the gavel is about to fall

and then you put your bid in.

You wait until everybody else is finished.

If it's still worth bidding on, then, great, you do.

And if you don't, you just walk away.

Yes, she talks like an auction veteran. But she isn't.

I have to admire her game plan and her steely resolve

in the heat of her very first property auction.

# Smooth operator... #

June and John do this for a living,

and it is just the kind of property that they're interested in.

So, what was it that attracted you to this particular one?

It's a three-bed, which is unusual.

Quite a lot of them tend to be two-beds.

So three-beds are very popular with families.

So it's good for resale and it's good for a rental, as well.

Now, obviously, work has been started. Was that you?

Yes. We came in and stripped it out

basically, to see what or how bad it was,

so we can then get the guys in place to get the works done

that need to be done.

-So, when did you complete?

-Thursday.

-Thursday.

-Got the keys on Friday.

-And today's Tuesday.

-Yes!

So, you don't hang about, do you?!

Not really, no.

Got the keys on Friday. The guys have worked all weekend.

-Wow.

-Cleared out several lorry-loads.

What sparked your interest in property in the first place?

My dad, probably.

Whenever we did any work on the house at home,

-it was always me that got conscripted to help.

-Conscripted!

Conscripted is probably the right word, yes.

If you want your pocket money, you're working for me.

Well, money never came into it, just a case of

-"you're small, get under the floorboards".

-Really?

-Yeah.

So, I mean, I've run cables under floorboards

for when he was doing rewires, and lagged pipes...

-At what age?

-Probably about 11?

10, 11 - something like that.

I think he wanted a boy.

So, no, that's what started me.

As always, our advice is please get an electrician in,

and DON'T put your children under the floorboards!

And June has gone a bit girly, in that she owns a wedding dress shop.

Anyway, the child apprentice now has bags of experience,

and a team of trusted builders to get on with the work.

It needs a damp course,

it needs a full rewire, a full replumb,

a full re-skim,

um...windows, front door, back door, internal doors,

skirting boards, door frames,

back moulds, architraves, kitchen, bathroom.

Decorate, flooring.

We're not repairing the roof, because the roof is fine.

Right. Phew.

The layout will stay basically the way it is.

It's got a downstairs bathroom,

which is usual in this area.

And if I moved it upstairs you'd lose the third bedroom,

so it negates the need for doing it.

So, what's the budget for all the work?

The budget, including fees, is around about the 15,000 mark.

Right. So what is the timescale?

Around about three months.

I thought you'd say three weeks, actually!

No, they're good, but they're not that fast.

While her team are getting on with the work,

June will be focusing on her wedding dress shop.

We're just about to expand into bigger premises, which is nice.

Brilliant.

So, I'm obviously doing something the brides are happy with.

-Yeah.

-So, no, it's really good.

Very different from this.

-Well, congratulations.

-Thank you.

-Good luck with it.

-Look forward to seeing you again to see how you get on.

-Thanks a lot.

Well, June seems to know exactly what she's up to.

And, she's not hanging about.

But, in the business of property developing, time is money.

How will she get on?

You can find out later in the show.

Still to come, in Stoke-on-Trent, I'm feeling the squeeze.

Actually, up here it feels a bit sort of...cramped!

And in Tyne and Wear, June pushes ahead.

They all know their jobs. They do them.

They know the standard I insist upon, and they deliver.

It is now back to Harrow in Middlesex,

and at the top of the three-storey semidetached house

was this one-bed flat,

which was not just tired and run down,

it was dead on its feet.

It didn't so much need TLC - more like tough love!

Its lease was also running down

and, so far, lay at 70 years.

But there was definite potential here,

and it was the right sort of project for a first-time developer.

Well, this place got not one, but three -

and all of them had the skills to turn the place around,

with Conor a carpenter, Paul a plasterer,

and Daniel an electrician, together they had pooled their funds

and bought the flat for 101,000.

So, was this the one you wanted to bid for on auction day?

Er...no, originally we looked at a block of around 200 properties

and singled out three that we'd be interested in bidding on.

We had a sort of a gold, silver and a bronze.

The gold one ended up going for a lot higher

than we'd allowed to pay for it,

when you included all the other costs,

so we had to settle for the silver.

Well, at least it wasn't the bronze.

But, with an odd layout and sloping ceilings,

I reckoned they'd need to practise some real alchemy

to turn this into gold.

But they did have a 15 grand budget and the skills,

so, 15 weeks later, we returned to see if this team are medal winners.

Wow! I'd say so!

I hardly recognise this flat.

They seem to have magicked space out of nowhere!

That new bedroom has access to the old bathroom area,

now a beautifully appointed en-suite.

The team started out planning to just give the place a make-over,

but that soon changed.

It was going to be a semi-gut.

We weren't really planning on doing whole thing.

But as we got here and started taking things down and moving them,

we realised we were going to have to do quite a lot more.

That dark old tunnel?

Look, it's now a cosy reading nook.

In the end, the flat was totally gutted

but in the process, the team blocked up the old bathroom doorway,

creating a larger kitchen area.

The flat now has new electrics, plumbing,

all the walls have been replastered

and new windows have been fitted.

And, of course, all the lads were entirely hands-on,

as Daniel explains.

We done most of the work ourselves, but we stuck to our trades.

So, like, I've done most of the electrics,

Paul's done most of the plastering, Conor's done a lot of the carpentry.

We've crossed paths in certain things, but mainly not,

which in some ways is a mistake.

Paul was left to do a lot of the plastering on his own

and it would've been faster

if I'd have dropped what I was doing and helped him.

We all should have, I think, taken more care to help each other out.

It probably would've saved us time in the long run.

# If you got a problem

# Don't care what it is

# If you need a hand

# I can assure you of this

# I can help

# I got two strong arms

# I can help

# It would sure do me good

# To do you good

# Let me help... #

Well, helping this case out of its lethargic state

took the team eight weeks,

and, fortunately, for such a radical overhaul,

the trio didn't encounter any major problems,

though, with those stairs,

actually getting materials into the flat wasn't straightforward.

Bringing things up, like radiators and doors, because of the narrow corridors,

we didn't want to dink all the freshly plastered walls

or the freshly decorated walls,

so we'd carry them up with two people.

And when we carried things up individually, we were very careful.

Well, it must have kept the lads fit.

Getting this place in shape for the resale market was the aim -

hence, the top-quality finish.

We went relatively higher-end.

We just bought nicer skirting,

nicer architrave,

and high attention to the finish of the plaster.

This property will be a great step onto the property ladder

for a first-time buyer, but sorting out that 70-year lease

would still be a key part in making this property saleable.

And, fortunately, the freeholder was only too happy to oblige.

We extended the lease from 75 years to 99 years.

In the end, we had to pay him 16,000,

which, at first, we were all kind of knocked for six by,

but when we sat down and thought about it,

and thought about the next project,

and how much money you can make in, say, two years,

we thought we could stomach it.

The lads also knew that extending the lease

would increase the value of the flat

as well as making it attractive to buyers and mortgage lenders.

And so, if that cost more than they anticipated,

did their 15 grand budget also go through the ceiling?

All told, we've had about 13,000, I think, on materials -

including a plumber, a carpet and everything,

and in terms of labour, we've only spent about 10,000.

So we've paid ourselves a bit of a pittance,

but we're hoping for a bigger pay-out at the end.

I hope you're right.

I think the lease was a smart move,

but that £16,000 added to the 23 grand on renovation costs,

and the purchase price of £101,000,

brings their grand total invested in this top-floor flat to 140,000.

Time for two local estate agents to cast their eye over the team's work.

I think they've done a really good job here.

It presents well, the layout works a lot better now, as well.

The fact that they've changed the en-suite coming off the bedroom,

the kitchen, which is open-plan now with the lounge area.

Gives you a real good sense of space as you walk around.

It works really well.

It shows really well. Everything is a nice neutral colour.

It is a good layout.

Plenty of storage in that side and these cupboards.

Even the bedroom is a good size, as well.

The lads have achieved a top-notch finish here,

but will they make a profit from their £140,000 outlay?

The resale value of this property -

I would expect to achieve in the region of £180,000.

I would suggest to put it on the market at around £190,000

to achieve anything from 180,000 upwards.

Well, those valuations mean, before taxes and fees,

the lads could make a potential profit of £40-£50,000.

Yeah, it's great. It's a really good figure.

-Very pleased with it.

-Yes. It's a good figure. Happy with that.

They are excited, honest!

But will the rental returns make them think twice

about selling the flat?

If this property was on the rental market,

I'd expect it to achieve £850 per month.

Rentals, I'd probably suggest putting it on at £900pcm.

Well, those for rental figures could mean a possible annual yield

of around 7.5 percent.

How does that sound?

It's a good yield, but I think we are planning on selling it.

The first few, anyway.

Conor, Paul, and Daniel have certainly made a success

of their first joint project,

so a little celebration is in order.

But, they're already planning to visit the auction room

for another purchase!

Though next time it definitely won't be another top floor flat!

While this place wasn't their first choice for a renovation project,

they know they've upgraded it to a new standard.

As you know, this was the silver choice of flats

that we looked at, originally, in the auction,

but I'd say it's turned into gold.

Yeah, definitely.

Leaving the boys toasting their success,

we head north to Bentilee, a housing estate in Stoke-on-Trent.

Built in the 1950s, it was at one time,

with 4,500 homes, one of the biggest estates in Europe.

The area has undergone various regeneration schemes over the years,

and nowadays has owner-occupiers as well as tenants.

Right in the middle of the estate is the property I'm here to see.

£55,000 plus was the guide price for this...

A three-bedroomed semidetached.

But forget about the house for a second,

and just look at the size of the garden - it's enormous!

I love a good solidly built ex-local authority house.

I also love gardening,

so a really big garden is very welcome.

I'm thinking maybe a greenhouse,

and every man needs a potting shed.

It also has a farm gate.

Oh, well, big garden, big gate.

I can't get in through the front, so the back it is.

Mm-hm... OK!

LAUGHS

Well, hopefully this isn't the kitchen.

The useful downstairs loo.

And I think, joking aside, that's a little utility area.

And very useful, it is, too.

This is the kitchen!

Erm, interesting shape.

Erm... It's not exactly bang up-to-date, is it?

But, it's a nice-sized space

and, you know, spend a bit money in here

and, wow, what transformation.

Pretty good.

The kitchen isn't the only bit of the house

to have an unusual layout.

The hallway takes you past the stairs to the front door

and living room to the right.

I like it as it's a good size with an OK fireplace.

The central heating radiators look reasonably new. So far, so good.

So, is upstairs surprisingly spacious? Well, let's find out.

A smallish bedroom there.

Over this way to a half decent sized double bedroom.

And this flooring doesn't really do the place justice.

And actually, up here, it feels a bit sort of cramped.

The bathroom there looks like it's had a bit of renovation work

done on it. Only half finished.

And through into the biggest of the bedrooms, the master bedroom.

Slightly strange layout, partly because of this,

which is just above the stairs there.

It's almost lending towards possibly being some kind of en-suite.

It's a good size, and again it just feels solid,

so a lot of house for the money.

Time to investigate that field out the front.

Well, often another advantage with ex-local authority properties

is that they come with big gardens.

And as I said before, this one is no exception.

It's absolutely huge. That might not necessarily be a good thing.

Certainly, if you're renting this place out,

tenants sometimes don't...

look after the gardens of the properties they are renting.

So what could you do? I mean...

it's big enough almost to consider a building plot, perhaps?

If you could get planning permission for putting another property here?

Looking around this estate, I doubt you'd get away with that.

Maybe the best you could hope for is a garage or workshop of some sort.

But at least you've got the space to play with.

Even if you weren't planning on keeping this as the most

perfect lawn, there is a bit of maintenance involved.

So think about how you would manage it and pay for it

if you were renting.

Perhaps you could throw a goat in with the property!

But you'd need a permit.

# Hit the wrong note, billy goat. #

Let's see if a local estate agent thinks this property

hits the RIGHT notes.

First impressions of this property, it's a little unloved,

as it's been rented out for a number of years.

But the saving grace is the huge front garden.

Gives the property a major plus.

How much extra value does that huge garden out the front

add to the property?

A property of this nature of accommodation

in this area currently values at around about the £75,000 mark.

However, with that large front garden, you'd put this property,

once renovated, on the market

somewhere between £80,000 and £85,000.

So, that could be an extra ten grand of value on the property.

Not bad. But what about rental figures?

The potential for rent on this property is very good.

There is a demand for rental property on this development,

and once renovated, you're looking at a figure in the region of £450

per calendar month.

Well, as you know if you watch the show a lot,

I absolutely love ex-local authority properties.

They're solidly built and provide a lot of accommodation for the money.

And at that guide price, I think this one is a great one to go for.

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

Lot 44 - a three-bed semidetached house on a very large plot.

Garden is a good size.

50 to start me here?

50 bid. Thank you. £50,000.

52. At 52.

54.

56.

58.

At £58,000... At £58,000...

I'll go in ones if it helps. It's at 58.

59? 59,000. 60?

At £59,000, then. The bid is in the middle. At £59,000. 60 anywhere else?

New bidder in the middle as well. £60,000. At 60. 61?

No. At £60,000 right in the middle. At £60,000. 61 anywhere else?

If not, I'm selling it at 60 for the first time...

£60,000 for the second time...

Third and final time, £60,000...

Your lot, sir. Well done.

And that final bid of £60,000 was from Bassam.

He bought the property on behalf of a friend, Mahmud,

who is currently in Saudi Arabia.

Bassam used to work for the NHS

and is now a PhD student in Primary Care Science.

So will he be able to care for this property's needs? Let's find out.

-Bassam, great to meet you.

-Nice to meet you, too.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

-I want to rent it out, really.

-Right.

-What was it about this house that appealed?

-Oh, it's the garden!

-Right!

-A really big front garden.

-OK.

And I think it's really brilliant.

-Um, that's really the main selling point for the house for us.

-Great.

Normally, when people are renting out a property, a big garden

can be a problem, because often tenants don't look after the garden.

But because it's a front garden,

I think we could in future make a garage there,

which will increase the rent.

Right, OK.

That's a good, savvy thought from a first-time developer.

The only property Bassam has worked on before is his own house,

which is nearby. And this isn't a business deal for Bassam.

He's only doing this as a favour to his friend.

It's quite an undertaking.

Not only is Bassam doing a PhD at university, but he has five children

and is just about to start a new job teaching health care.

So he's clearly a busy man with a plan.

Initially, the property will be renovated for renting out

on a six-month let.

The plan is that then his friend Mahmud

will come from Saudi Arabia for a visit next year

and possibly stay in the property while he's here.

So, Bassam is in charge of the work. What's he got planned?

The back garden, the fence is falling and needs sorting out.

From inside the house, as you have seen, it needs plastering,

a lot of plastering.

To be fair on the house, it's not really in an extremely bad state.

It's OK.

The flooring needs doing, the kitchen,

-as you see, the cupboards and things like that.

-Right.

-But it's a solid house. Ex-local authority.

-It is, yes.

I think, you know, these houses are built by the council

in the '50s and they are really solid and strong houses.

That's one of the things I like about them.

My house is two minutes up the road and it's exactly...

-They're all exactly the same design.

-Yeah?

-That must be funny walking into this. "It's like my house!"

-Exactly.

What's the budget?

-At the moment it's up to about 5,000.

-OK.

But we're not doing the garage outside at this point.

It's just reverting the house and sorting out the garden.

But we don't know if it's going to go a bit more or less.

-It's our first project, so...

-Right.

-Bit of a learning experience.

-Yeah, exactly.

-What's the timescale?

Just a couple of months.

And then the idea is to rent it out and possibly move onto the next one.

Yes, exactly. Rent it out.

-We want to see, obviously, if we can sell it and get a good profit.

-Oh!

We might sell it and just get another property. So it depends.

What offer would tempt you to sell?

-Well, it depends on how much we're going to spend on it.

-OK.

But, yeah, I think if it's over 5,000 profit, yeah, we would.

-Well, congratulations, anyway.

-Thank you very much.

-Good luck with it.

-Look forward to seeing how you get on.

-Thank you.

So, Bassam attracted more by the garden than the house.

I think his idea of building a garage is a good one.

In terms of sorting out the house itself,

that £5,000 budget is a little bit tight.

How will he get from? Find out later in the show.

Time waits for no man, that's for sure,

but have out buyers lived up to their promises?

Has the work being done or have there been delays

and disasters along the way?

Let's find out.

Back now to Houghton-Le-Spring, in County Durham,

where this three bed mid-terrace was snapped up for £40,000 by June,

a seasoned property developer who also owns a wedding dress shop.

She had a budget of £15,000, but as for the schedule,

time was of the essence.

-Obviously, work's been started. Was that you?

-Yes.

Yes, we came in and stripped it out, basically to see how bad it was

so we can then get the guys in to get the work done that needed to be done.

-So when did you complete?

-Thursday. Got the lease on Friday.

-And today is Tuesday.

-Yes. HE LAUGHS

-You don't hang about, do you?

-Not really, no. Got the keys on Friday.

The guys have worked all weekend.

-Wow.

-And cleared out several lorry-loads.

-So what's the timescale?

-About three months.

-Three months.

I thought you were going to say three WEEKS, actually!

No, they're good, but they're not that fast.

There was clearly plenty to do to get this one back up to scratch,

but June was confident her trusted team of builders would pull it off.

Four and a half months after our first visit,

we're back to see if June,

the property developer-cum-bridal boutique owner

has the mother of all wardrobe malfunctions on her hands,

or will the mid-terrace be ready to glide down the aisle?

Wow. What a great transformation.

June has obviously taken a lot of care with the finish here.

All three bedrooms look bright and refreshed.

And look at the outside space.

Those French windows are a nice touch...

..and the living space on the other side of them is light and airy.

Probably the best part of the project is now

when you look at what it was like when I originally got it

and what it's like now and it's a lovely family home

that anybody could come in

and simply put their furniture into and live in it.

Couldn't have put it better myself, June.

But for this beautiful swan of a house to emerge,

there must have been a fair amount of frantic paddling

going on underneath the surface.

It's been rewired, replumbed,

new windows and external doors,

a full damp course,

all of the interior woodwork has been replaced,

spindle staircase has gone in,

new kitchen, new bathroom, new flooring,

been fully redecorated.

There's been a tremendous amount of work done.

The open-plan living space downstairs looks great

and the addition of French doors opening onto the back yard

works a treat.

So, originally, we were just going to replace the window,

but then, once we started work,

realised the dining room was quite dark.

So, change of plan. Decided to put French doors in.

Let's a lot more light into the room.

Out here, we'll have a decking area.

The wall will be rendered and painted.

So, on a summer's night, it's somewhere nice to come out and sit.

With some tidying up to do and a gate to go up,

there is still work to do here.

But the wettest winter on record is to blame

for the slight overrun on the schedule.

And before signing off on the work,

June is preparing a snagging list for her builders.

Got an excellent squad of builders.

They all know exactly how the project needs to be.

They all know their jobs. They do them.

They know the standard that I insist upon and they deliver.

# Stand and deliver. #

The builders have certainly delivered, but for the life of me,

I can't see how June has stood her ground on the money front.

The budget originally was £15,000, with a £5,000 contingency.

The contingency has been used,

but I've managed to hang into it for the 20,000.

That's been for many things that we hadn't budgeted for

or change of plan.

For example, the French windows, which was an extra idea.

A £20,000 spend on top of her purchase price of 40,000

brings June's total spend here to £60,000.

We asked along two local estate agents

to get their thoughts on the refurbished mid-terrace.

It's a lovely property. It's been done to quite a high standard.

It's got a nice, modern fitted kitchen

and the bathroom's been done nicely.

The bedrooms are good sizes upstairs.

It's a lovely property. It has been done to a high standard.

It's all modern throughout, the decor, which always helps

when you're looking to resell or rent out properties.

And what do they think the mid-terrace could fetch

on the rental market?

The rental valuation on this property I would estimate

at £550 per calendar month.

The rental valuation that I would put on this property

would be £550 per calendar month.

That's a lot more than I expected to get.

I thought it would be between 475 and 500,

so I'm very, very pleased with that one.

Those rental valuations would give June a very healthy yield of 11%.

But what about the resale market?

The sale valuation on this property would be between £85-£89,000.

I would value this property at £95-£100,000.

I think one is probably slightly too low

and the other one's slightly too high.

In fairness, I would have looked at around about the 90,000 mark.

June has really added value to this property,

with a very high-quality finish.

If you recall, the agent who saw this property before the work

was carried out thought an extension might make

this property's resale value around that same 90 grand,

the same as June expects to get now.

So, no extension, but still a possible profit of £30,000,

minus all the usual taxes and expenses.

What is June going to do with this mid-terrace?

Initially, the property will go up for sale.

It's in its best condition, so now is the time,

if it's going to sell, for it to go.

So, yes, the property will go up for sale, see what the market is like.

If it sells, great. If it doesn't, then I'll rent it.

From seasoned pro June,

over to first-time developer Bassam

who in Bentilee, Stoke-on-Trent,

had bought this three-bedroom semidetached property

for £60,000 which also boasts a huge front garden.

Buying it and overseeing the work as a favour

to a friend in Saudi Arabia,

Bassam planned to renovate and let out the property.

-What was it about this house that appealed?

-Oh, it's the garden.

-Right.

-That really big front garden.

-OK.

And I think it's really brilliant.

Normally, when people are renting out a property, a garden,

a big garden can be a problem,

cos often tenants don't look after the garden.

It's good. Because it's a front garden, I think we could,

in the future, make a garage there where it will increase the rent.

This was Bassam's first venture into property renovation

and although this was a solid property,

he still had a lot of work to do

with a relatively tight budget of just £5,000.

We've returned five months later to see how he's done.

The living room has been plastered and repainted

and the flooring has also been improved in here.

The kitchen, whilst not being replaced,

has been cleaned up and painted...

..as has the downstairs cloakroom and utility area.

Moving upstairs...

..the three bedrooms have also been newly plastered

and given a fresh lick of paint.

The freshening up continues in the bathroom

and goes right through the house.

The improvement in flooring is a particular plus point.

Well, the floor here, we decided to change it.

We had a carpet on the landing and the hallway with the stairs.

We changed that flooring for the living room.

The laminate upstairs was really in a good condition

so we didn't really need to change it.

Unfortunately, the big front garden is still in need of work.

And not replacing the kitchen may count against him.

But, as a full-time PhD student and a father of five, to boot,

I think first-time renovator Bassam still gets an A for effort.

The property is nearly finished

and it feels really good to have the work nearly done.

We've got a little bit more to do, unfortunately,

but, yeah, it's nice to see that the work's been done.

We hired a few people to do the work, like a plasterer,

people to fit the floor, joiners.

Some of the work which I felt people would maybe charge a lot to do it,

I did it myself.

Unfortunately, I didn't have enough time to do everything myself.

But there were a few things, like fitting the doors, for example,

the simple things I've done myself.

It's actually taken Bassam four months

instead of the estimated two to get to this point.

So it hasn't all gone to plan.

One of the issues we had is the central heating system, actually.

I looked at the boiler and it looked fairly new,

so I thought everything should be fine.

But it wasn't working, and we found a lot of blocked pipes.

Many of the pipes had to be changed, the old radiators had to be bled

and cleaned and the whole system had to be bled and re-cleaned

and we had to put different materials to clean that system

and drain it, then another material for maintenance.

But it's working now, so I'm glad.

So am I, Bassam!

How is that tight-sounding budget of £5,000 holding up now?

Yeah, actually, we were within budget,

simply because there was work I had to do myself.

I've done a bit of shopping around, so I wasn't really going

for the big name companies that would charge a lot of money.

I've relied on some of the local people who do the work, and that

was sufficient and good, and at the same time we got people working.

There's no doubt about it, Bassam has worked very hard on

this project, and I'm sure his friend will be very grateful.

However, it is a fairly simple renovation.

Will that have an impact on the evaluations?

With a total spend of £65,000 here,

we asked two local agents along to give us their opinion.

The property has clearly had some refurbishment,

but I wouldn't describe it as completed at the moment.

What he has done is modernise the property to a decent standard.

The property as it stands today would benefit from a new kitchen

and a bit of refurbishment in that area.

Because it is reasonably basic and it will appeal to people

if the property is fully modernised.

As I suspected.

But as it stands, what potential sale price could Bassam achieve?

I would place this property on the market for sale at £75,000.

I would suggest an asking price in the sales market at £75,000.

Meaning a pre-tax profit of a potential 10,000.

But it's the rental market that Bassam is most interested in.

In its current condition,

the rental value would be around £395 per calendar month.

However, if the property had a new kitchen,

we'd anticipate receiving £450 per month.

As the property stands, 395 per calendar month.

If the kitchen was refitted,

we'd be looking at figures around £450 per calendar month.

Meaning that as it is, Bassam could expect a rental yield

of around 7%.

But if he chose to invest in a new kitchen,

that would increase to around 8%.

I think I've got a bit of thinking to do with what to do

with the property now, with selling it or renting it out.

But definitely I've got more to do with the house at the moment.

So many different experiences buying at auction

and we've got plenty more where those came from.

Yes, make sure you join us next time for more Homes Under The Hammer.

-See

-you then. Bye.

-Bye.