Episode 17 Homes Under the Hammer

Hello and welcome to the programme.

Investing in property can be a daunting prospect.

But it doesn't need to be. The trick is finding the right property for your particular needs.

So, how could you do that?

One way could be by visiting your local property auction.

All different kinds of properties go up for auction every day.

It's all about making the right choice though.

What did today's buyers on the programme decide to go for?

A day of hidden nasties on Homes Under The Hammer.

Could this sweet cottage near Norwich be sinking?

This would be a major concern to me, cracks of this size.

In East Ham, London, a two-bed flat is structurally sound

but there's a problematic short lease.

Mortgage lenders hate short leases.

And we return to Maryport where a mid-terrace's problems were obvious.

That's not good!

But could there be a hidden gem?

All these properties were bought at auction and we'll find out who

got them and how much they paid when these homes went under the hammer.

Well done, sir.

15 miles west of the city of Norwich in Norfolk,

lies the market town of Dereham.

And it's here, tucked along a gravel road,

I think I've tracked down an interesting auction lot.

The property I'm here to see today is a three-bed, detached bungalow

which is a mile outside Dereham with a guide price of £130,000-£140,000.

Let's take a look.

'Now, the auction catalogue says this house needs some remedial repair.

'Although it looks very cute, there might be some serious issues.'

This takes you back, or should I say, it takes me back a little bit

to houses in Leicester I used to live in.

Very symmetrical, two rooms at the front.

Nice sized room to the left and this would have definitely been

the lounge area because it's got a very pretty old-fashioned fireplace.

Down the hallway into this room, with a fireplace to the right.

Possibly the dining room.

Two more rooms in there which would be bedrooms.

Into the kitchen, nice long kitchen.

Big size.

And the bathroom in a nice pink colour.

But this kitchen has surprised me. It's long and it's thin

but it could be the hub of the house.

I'm pleasantly surprised.

But if you're more a fan of a kitchen diner, as a lot of people are nowadays,

then you might not be as fond of the kitchen as I am.

In which case, this 1930s living space will have to be re-jigged

and maybe the kitchen and the fireplace will have to go.

Upstairs, the bedrooms need bringing forward 80 years or so as well.

But back into this century, there's an age-old problem

that needs serious attention.

This would be a major concern to me, cracks of this size,

not just here but all over the property,

are definite signs of structural movement.

What you would have to do is get yourself a very detailed survey

to find out what's going on.

A structural survey will tell you if the house has been, or is still,

moving due to issues with foundations or the soil underneath.

This house could need underpinning.

That means extending or supporting the foundations,

a lot of digging and a lot of concrete.

An alternative could involve strengthening

the soil beneath using a resin which is injected beneath the footings.

Whatever method you choose, a big bill is on the cards.

But I think stepping out the back door might just make you feel

it could be worthwhile.

What an amazing garden.

It goes back a long way

and it looks like it's been kept incredibly well.

The greenhouse there where they must've been growing vegetables at some stage.

But it's really nice.

A bit of time, a bit of effort, a bit of TLC in this back garden

and it could be absolutely lovely.

Yes, it wouldn't take much because it really is in good shape.

I love it.

And for any would-be gardener,

this alone would draw them to the bungalow.

And the space at the back would offer up an opportunity to extend

the bungalow outwards.

And if you so wished, of course, you could go up.

So there are options here and bags of potential.

But equally, you can't ignore the fact that it will cost you

a fair amount of money to get this up to modern standards.

So, is it worth the time, effort and money?

What does a local estate agent think?

Position and the location are everything.

It's got a great garden, it's close to the town centre,

very close to good transport links into Norwich.

It's got an awful lot going for it.

Good location, good plot...

..but how could it be improved?

You could look at extending it into the roof, I guess.

I would take some of the ground floor accommodation away.

But the area and the amount of garden it's got would stand improvement in that way.

Yes, but financially would that add up on a property

that had been guided at £130,000-£140,000?

Once renovated I think this would be something in the region of £200,000.

If you could make this into a four-bedroom property by extending

upstairs, it's going to be limited

to something around £285,000-290,000.

Right, so undoubtedly, an extension would add value.

But it also adds time and costs.

Something to weigh up when doing any property refurbishment.

What about its possible rental returns?

A property of this nature would achieve £650 per calendar month.

If you have the time, the vision and the investment,

this property could be perfect for you.

If you get it anywhere near the guide price

it's going to be a very worthwhile investment.

Let's see how it got on when it went to auction.

Moving onto lot 18.

It is a detached bungalow probably built around the 1930s.

I've got one or two bids here

so I can kick you in straightaway at £120,000.

I'm in at £120,000.

The bid's with me and I'm going to take it in twos is if I may.

At £120,000. 122, do I see?

122?

124. 126, 128.

128. 130.

No. At £128,000. Are you all done the? At 129,000?

Thank you, fresh hand. 129,000 and I'm out.

So it's with you at 129,000.

I'll take half, if you like.

129,500.

129,500. 130.

Shake of the head. So, £129,500, then.

Are you all done then at £129,500?

For the first.

For the second time. Are you all done at £129,500?

Once again, there's three of you there all bid strongly.

Can't sell it to you yet, so speak to us afterwards and we might be

able to do something but any one of you, come and speak to us.

The bungalow, as happens with many auction lots,

didn't meet its reserve price on the day.

But that doesn't always mean the end of the story.

In this case, a deal was done afterwards.

Oxfordshire-based Val bought it.

She joined me back at the property with her project manager, Joe,

to tell me more.

-Val and Joe, nice to meet you both.

-Yes.

-Congratulations.

Thank you, very much.

Tell me about the auction experience, first and foremost, when you found this property.

Well, I looked at several properties and wanted to buy at auction

something that needed some work, having done one or two before.

This one didn't sell.

So we went away disappointed and went back five minutes later

and, hey presto, I bought this one.

In fact, Val paid, in the end,

£130,000 for the bungalow which was the reserve price and her top limit.

This will be her sixth renovation

and she plans to sell it on once the work is complete.

Val, what is your day job?

I'm retired, really...

No, no you're not!

I help my daughter with floristry.

She's got a very thriving business.

She's just had a new baby so I do a lot of baby-sitting.

-Good on you. And yourself, Joe?

-Everything, basically.

I do electrical work,

I do data communications fibre. I work all over the place.

I do a fair bit of work for Val, but I also work for other people...

..as and when I'm required, basically.

Who's in charge of the project?

I'm the owner, I suppose I can say yes or no!

But Joe's project manager, really.

He's done a lot of research.

Yes.

Yes, and in this case research was key.

The cracks and the condition of the bungalow

came as no surprise to Val and Joe.

They've already had professionals in to assess the structural issues.

We've been told today it's not a problem.

We just need to know how much.

The kitchen, there's a small wall to come down

to make the kitchen bigger.

En-suite is going in the main bedroom.

The bathroom is being turned around

because the door is on the kitchen which is not good.

That's going to be on the other side

and have a shower in there as well which isn't there now.

What about the front of the house? Anything you want to change?

Erm, yes.

The parking is a problem here because it's a very nice little road

but it is small. There's parking for one.

Most families have more than one car.

So we're going to gravel the front garden,

just make it nice and plain with some pot plants.

And, yes, revamp the front.

Sounds like a lot of work planed outside

but what are they planning to spend on renovating inside?

Probably talking, about £20,000, give or take.

-Which I think will be more than enough.

-So, hands-on?

I'll do a lot of it but we've got other guys who come in,

a plumber and a few other people.

-Carpenter.

-Carpenter, plasterer.

-Builder.

-I do a lot of it myself.

-You've got the eye for...

-I paint.

-Hands-on as well?

-Yes.

-And the interiors as well?

-Yes.

-That's all down to you?

-I do some of it, not all of it.

Val is a florist.

Her creative talents will be used here

and she assures me she is handy with a paintbrush.

In a time schedule of two to three months, she'll find plenty to do.

The plan is, the underpinning will be done in parallel with

the interior work and she's hoping that will come at an additional cost

of no more than £10,000,

taking her total budget to around £30,000.

Val, you're smiling about everything.

-I enjoy...

-It shows.

-..doing something like this.

Yes. So, yes, I will be determined to get a good job done.

I'm semi-retired so I've got some time now.

I can put my heart and soul in it...

..and make a good job.

Will you find it hard to leave when you put your heart and soul into it?

I think I probably will.

I've got some friends locally here who have already suggested

that I move here.

-They want you nearby.

-That isn't the aim.

-So, I don't know.

-You'll have to wait and see.

-We'll wait and see.

Could you change our mind?

-That's not the intention.

-OK.

I hope it works, I really do.

-Very nice to meet you. Good luck, good luck, Val.

-Thank you very much.

-Good luck, Joe.

-Thank you.

What a lovely lady Val is and she does have her trusty sidekick,

Joe, to help, as well.

But there's a twinkle in her eye. Will she sell it? Or will she stay?

You can find out later in the programme.

East Ham in the borough of Newham

is one of London's many bustling suburbs.

Its success is due to the arrival of the railway.

The opening of East Ham train station in 1859

resulted in a huge boom in this area's growth.

So, it's not surprising that a lot of housing stock around here

dates from the Victorian and Edwardian period.

The property I'm here to see is no exception.

It's a first-floor flat in this mid-terrace house,

it's got two bedrooms and it had a guide price of £100,000 plus.

Let's go inside and take a closer look.

As you can probably hear, there's a nearby school

and East Ham Tube station is just a short walk away

making this a popular area to buy or rent in.

Straight up these stairs and you're into the flat

and, oh, you can see it's a little bit dated on the decor front.

Lots of nice yellow gloss paintwork everywhere.

You've got polystyrene tiles up there.

Once you've got over the shock of all that, I think you realise

this property does need a big, big overhaul.

And, well, it's not that big in the kitchen

so you need to rearrange the space here.

And you don't actually need this any more, and that is the space

between the kitchen and the bathroom, which is at the back here.

You've got this sort of little wasted lobby area.

If you were to keep this configuration and keep this space here,

you could put a tall fridge freezer there perhaps

or your washer and your dryer.

Once you've done a bit of reorganising it could work in here.

I think the key way to utilise this area properly

is to fit a combi boiler so you can get rid of that hot water tank

and really free up that space.

The bathroom is a good size.

It doesn't feel cramped at all.

So, really, it's the kitchen that needs a major rethink

and stripping out to see what you've got.

# Think again

# Think again.. #

Moving on, a few more stairs and there's a living room.

Again, the decor is dated and the carpet certainly needs replacing

but at least the windows have got double glazing.

Then at the front of the flat are the two bedrooms.

Currently as it stands, let me get this right,

this is a two-bedroomed flat.

I've seen hundreds of properties like this on Homes Under The Hammer

but not so often have I seen the rooms divided like this.

This clearly is a partition so this little tiny box room just through here,

you can hear that, is also a little partition configuration

that is not really working for me.

Two-bedroom flats would be more valuable but you've got two tiny

box rooms, so I do think I would be inclined to take all of this down

and have one nice big living room here and make next door the bedroom,

although you might have to talk to the freeholder

because you will be altering the layout.

# Think again... #

There is, of course, another solution to the two tiny bedrooms

and that's to think about going up.

Now, when you're looking at top-floor flats

it's always a good idea to check out the loft space

and find out who legally owns it.

Get your lawyer to check your details.

The freeholder might own the loft or you actually might own that space.

If you do, it opens up the possibility of extending upwards,

maybe adding another bedroom and shower room.

That's something definitely worth investigating.

# More, more, more

# How do you like it? How do you like it?

# More, more, more

# How do you like it? How do you like it?

# More, more, more... #

Yes, the more you can get out of the limited space the better.

There will, of course, be an added cost with the loft conversion

but I think it would pay dividends and it would make an enormous

difference to the whole feel of the flat.

But it's not just the size of the flat that needs extending.

One major issue with this flat is that it has a short lease.

There's less than 58 years left.

Mortgage lenders hate short leases.

It'll probably be for cash buyers only with this flat.

However, these days, you can legally apply to extend a lease

but only after you've owned the property for two whole years.

Not great if you don't want to hang onto this flat for that long.

Of course you have to remember, lease extensions cost money

so you'll have to factor that into your budget.

So, to sum up.

This flat has a short lease, dated decor and two tiny bedrooms.

Oh, and there's no central heating in the flat

just a few old electric heaters. Not ideal.

But even so, I'm sure there's somebody out there this flat with suit.

# I'm not perfect

# But I'm perfect for you... #

But what does a local estate agent think about the property?

It is still worth a punt?

First thoughts, really nice property, very good purchase.

My first priority would be to change the property into a two-bedroom

by putting a loft conversion in.

If you couldn't get permission to do it as a two-bedroom,

I would advise that we take the rooms out

and do it as a one-bedroom because otherwise

you've got two single bedrooms and it's not going to be very beneficial for rental market or sale market.

I'm glad we're agreed on that bedroom issue.

But a loft conversion could cost around 20,000-30,000 on top

of all the other renovations and extending the lease.

So, which bedroom configuration would make the best investment?

As a one-bedroom flat, sale value with a new lease,

you're going to be looking in the region of about £180,000-£190,000,

once it's been refurbished.

As a two-bedroom with the loft conversion, you'll be looking

at around £220,000-£230,000, with the new lease again.

Not bad. What about its rental potential?

Fantastic area for rental at the moment.

It'll take a week, a week and a half to rent the property.

As a one-bedroom flat, you'd be looking at rental

of about £800-£900 per calendar month.

As a two-bedroom flat you'll be looking at a rental of between £1,100-£1,200 per calendar month.

This is a fab flat but it's got a short lease.

You're going to have to come up with the readies to extend it at some point.

But even if you bear that expense in mind,

there could still be some money to be made here.

Let's find out who was brave enough to bid for this one at auction.

Leasehold first-floor flat. This one does need a bit of TLC.

So what do you want to bid for it? Start me at 120.

120. 122.

122. 124?

123. 124.

At the back. 125.

126.

127. 128. 129.

129. 130. 131.

Despite the short lease, interest in the flat was quite intense

and we rejoin with the bidding at £152,000.

152. 152 and a half. 153.

153 and a half. 154. 154 and a half. 155.

155. 155 and a half. 156.

156. 156 and a half. 157?

I'm selling here at 156 and a half once.

156 and a half twice.

Third and your very last chance.

Well done, sir. That's yours at 156 and a half. Thank you very much.

So, the hammer finally fell at £156,500

and the successful bidders were husband and wife Muzzaba and Raheema.

Raheema works in local government while Muzzaba is a builder

and has done a number of property development projects.

But this was the couple's first property auction purchase.

And these two already live very close to the East Ham flat.

In fact, they can see it from their own back garden!

# Next to me

# Ooh-oooh

# Next to me

# Ooh-oooh. #

Muzzaba and Raheema, lovely to meet you both. Congratulations.

Did you think you would get this flat on the day?

We went there just to see how it goes

and we didn't think we would get it.

So what happened? How did you end up walking away with the flat?

I think your programme inspired us and we started to get interested

and we said, "Let's raise a hand", and we started.

So, you are blaming us at Homes Under The Hammer? It's our fault!

So, what happened? You literally sat there thinking,

"This is good. We are going to raise our hand."

Yes. Then we thought we would go up to 40, 140.

Then my husband just thought we'll continue.

So you carried on bidding and you weren't even supposed to be buying it on the day?

I was trying to pull his hand down!

He didn't listen to me.

I think we actually gained something.

OK. So you were a bit naughty on auction day.

-Your lovely wife was trying to get you to sit on your hands and you were having none of it.

-No.

So did you get a chance to view the property and read the legal pack?

I did view the property before but I didn't read the legal pack before.

-So you didn't know it had a very short lease?

-We didn't know.

-We didn't know, no.

The good thing is that the lease is extendable

and we are thinking to extend another 99 years.

And have you looked into how much that might cost you?

It's going to cost me about 15,000.

It could have been worse. That is not bad.

But a possible £15,000 for the lease extension

would take their spend here to £171,500

and that's before they've done any renovation work.

What do you think you are going to be doing with this flat?

At the moment, I definitely have to do the kitchen and bathroom

because they are in very bad condition.

Obviously the carpet has to be replaced.

There is the potential for a loft extension and everything

so I will try if I get permission for the loft.

-How about the room next-door? Do you want to alter that?

-Yes.

If I do the loft conversion,

then maybe I will keep it as a two-bedroom flat

and make one bedroom upstairs and this small bedroom maybe I'll knock-down

and make one big sitting room area.

That is what I'm thinking.

But before that, if I can't do the loft extension

maybe I will keep it as a two-bedroom flat downstairs.

And how much money have you got to spend on the work here?

We said 8,000 to 10,000 is our budget to spend on all the work.

The kitchen, bathroom, decoration and everything.

That £8,000 to £10,000 budget is to renovate the flat with its current configuration

and they are hoping to do the work in a timescale of three to four weeks.

But at the same time, they will apply to the freeholder

and the local council for permission to convert the loft,

which they hope to do at a later date.

So it sounds like they have a plan,

despite the rather spontaneous auction purchase.

He doesn't like planning. He always does the planning in his head.

I like planning on the paper so we work on that.

That is good team work, then. That is really good teamwork.

And a little birdie has told me that it's your anniversary today.

-Yes.

-How many years?

-14 years today.

-Congratulations, guys.

I hope you are enjoying spending your anniversary on Homes Under The Hammer.

That's the present for her.

-Good luck with this project. I can't wait to see the outcome.

-Thank you.

Raheema and Muzzaba have got themselves a flat with real potential here.

But they didn't read the legal pack and they didn't even plan

to buy this particular flat in the first place.

So will they get permission to do a loft extension

and will they extend that lease?

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

Coming up, In Maryport, bring your elbow grease for this three-bed mid-terrace.

There is not an easy solution, so some work to be done inside here.

And in East Ham London,

was it more work than Muzzaba and Raheema could handle?

-Too much work was...

-For you to do.

-..at the same time.

Just 15 miles from the cathedral city of Norwich is the village of Dereham.

It was here that we first saw a three-bedroom bungalow

and this 1930s-built property looked quite unassuming from the outside.

But inside, it encapsulated a bygone age

with rather old fixtures and fittings.

So undoubtedly, a comprehensive update was needed.

But that wasn't top of the to-do list.

This would be a major concern to me. Cracks of this size.

Not just here, but all over the property.

A definite sign of some structural movement.

And the cracking appeared to be due to subsidence.

The bungalow was going to need to be underpinned

to stop it sinking further into the Norfolk soil.

But with a spacious back garden and its great location,

this place certainly wasn't without its merits.

Bought post-auction by semi-retired florist Val

as her sixth property renovation project.

Together with project manager Joe, she was determined to do

whatever it took to make this bungalow blossom again.

# Give a little bit of heart and soul

# Give a little bit of love to grow

# Give a little bit of heart and soul. #

-Val, you are smiling about everything.

-I enjoy it.

-It shows.

-I enjoy doing something like this.

I am determined to get a good job done.

I am semi-retired so I've got some time now

and I can put my heart and soul in it and make a good job.

I am looking forward to seeing it. I really am.

And it wasn't just her heart and soul she was putting in.

She was also investing £20,000 for the internal refurbishment

and hoped an additional £10,000 would cover the necessary underpinning work.

With Joe project managing, she plans to have the work completed in two to three months.

And now, five months later, we are back to see

if the bungalow has stopped its downward slide.

# We could be lifted

# Lifted

# Lifted. #

Yes, underpinning is complete

and the bungalow now sits on rock-solid foundations.

And it has a gravel drive to boot.

But inside, has it been given the lift it needed?

# We could be lifted

# We could be lifted

# We could be lifted. #

Well, it certainly has in the kitchen.

# We could be lifted

# We could be lifted

# We could be lifted. #

This has been the main area of change, or one of the two main areas of change really.

Originally, this used to have a wall across here

and at this point here was a back door.

This area was all open with the drains down there.

That was the bathroom window.

We saw the potential to have a dining area which opened it up.

And that is all part of a nice, new, modern kitchen

with an old-fashioned feel.

The kitchen is a great success and it's bright and airy.

And in the rest of the house?

Well, the front lounge is now more modern,

though I think it was a shame to see that old fireplace go.

I rather liked that.

And what about the three bedrooms?

As planned, an en-suite has been added to the master bedroom

and it's very nice indeed.

The other two bedrooms are crisp and neutral.

The entrance to the bathroom has been moved, so it's off the hall rather than the kitchen.

But it is still a work in progress.

What else is on the to-do list?

It is tweaking everywhere.

Just mainly tweaking, but obviously finish off the bathroom

and finish off the en-suite.

Then it will be ready for someone to move in basically.

So bits and pieces still to do, but they have tidied up that

fantastic garden and overall the place is on much firmer footings.

But how much did it all cost?

The budget originally was 20,000,

plus the contingency for the underpinning,

which I gauged for about 10,000.

But the underpinning was £12,500.

But we eventually hit 60,000 so I am well, well over budget.

Wow! £60,000. Double the amount proposed.

Well, Val, you certainly haven't held back, but why so much more?

I think the labour charges with all the plasterers, carpenter,

different people I had to have in, the garden and the plumber.

And we then just said right, we will redo the whole lot.

You've got to do a good job. You can't do half a job.

Val and Joe have certainly not done half a job here.

Do two local estate agents agree?

First, the agent who we met previously.

It has obviously been completely refurbished and it is certainly

in much better condition than when I came to look at it previously.

I like the kitchen with the doors going out to the garden.

They have cleverly converted another room to allow en-suite facilities.

It is in a quiet location and I think it's very saleable.

So undoubtedly, it has a lot to offer.

But how in demand would it be on the rental market?

For rental purposes, I would ask £725 per calendar month.

If this property comes to the rental market,

I would suggest the price of £725 to £750 per calendar month.

£725 per calendar month would generate a yield of around 4.5%.

But Val bought this to sell on as quickly as possible.

Given she has doubled her renovation budget and has now invested

a total of £190,000, can she possibly make a profit?

For resale purposes, I would ask £235,000 for this bungalow.

Should this property come to the open market,

I would recommend a price of £225,000 to £230,000.

225 and 230 are really low.

I have had a valuation done at 275

so there's quite a difference between the three.

I would like to get 260 if that's possible.

So, Val may be a little disappointed by the agents' valuations

but even if she did sell it for £225,000,

that would give her a pre-tax profit of £35,000.

Since we filmed this, Val has had an open day marketing the house at £270,000.

She has had some interest, including an offer she hasn't accepted

and another in the pipeline.

The next auction that comes up, once this is sold, I will be there.

And we will do the same again.

We return now to a town on the Solway Firth

which we visited in July 2014.

Once famous for the smelting, coal and fishing industries,

and up to the Georgian period, it was called Ellenfoot.

# And then along comes Mary. #

Yes, and then Mary came along.

She was the wife of developer Humphrey Senhouse

and the town was named Maryport in her honour.

A few minutes' walk from the town centre and the harbour

is the property I'm here to see.

Three-bedroom terrace, guide price at £35,000 plus.

So, not a lot of money.

Does it have an interior that reflects that price?

Well, nice high ceilings as you walk through the door.

A bit of an odd layout.

There is one big room down here, which obviously makes this

your living room and sort of kitchen area.

At least, it doesn't feel claustrophobic.

But here is a feature you don't see very often.

There is the fireplace and here is an alternative fireplace.

Or is it a TV? Maybe.

Brilliant show!

Anyway, work to be done but I do quite like the layout here.

And, yes, onwards and upwards.

Urgh!

That's not good.

Neither is this.

Whatever this was.

Halfway up the stairs was this long corridor,

which led to another front door.

I was about as confused as the postman probably is by this property.

Upstairs, this listed building got even quirkier.

With a layout consisting of a bedroom and bathroom sans floor

and then the top floor did have two bedrooms.

It made the open-plan feel of the ground-floor seem a very distant memory.

You know, what's the opposite of open plan?

Because downstairs is open plan and up here is absolutely the opposite.

It's very cramped, it's all corridors and stairs and it doesn't work.

I am glancing around and there is not an easy solution.

So some work to be done inside here.

A perplexing property, but a potentially profitable place.

Guided at £35,000, the first time we visited an estate agent

valued this property, once renovated, at £75,000 to £80,000.

And while renovation wasn't going to be cheap,

nor for the faint-hearted, the guide price

and agents' valuations suggested there might be room for profit

if it didn't exceed the guide price by much.

Three-storey four-bedroom terrace house situated in a popular area of the town.

The property is a listed building. 35? 30?

I need a bid. I can't sell it without one.

At 30,000.

30, I am in. At 30,000.

Despite a packed auction house, it looked like the guide price was unobtainable.

But then things started to move a little.

At £30,000 then. 31. 32. 33. 34. 35.

No, with you at 34. Half. 35.

35. I've got a half here. 35 with you. Half? No. Back with you at 35.

At £35,000 on my left sitting.

First-time, second time, third time at £35,000 then.

Well done, sir.

So, we finally got to that guide price with a successful bid and that came from Dave on the left,

who along with his business partner, Kevin,

wanted a break from house-building

and sought to bring their skills to the renovations market.

They had set out to buy something, but they hadn't seen it

and they hadn't read the legal pack,

which of course meant my first question was...

-Tell me why you wanted to buy this property?

-God knows!

That's a good start!

Well, I eventually did get a straight answer from Dave

about why this was the auction lot they wanted.

There is a funny story to that. Shall I tell it?

You are going to tell it. Go on.

We arrived at our first auction a month ago just gone.

The house we wanted was number five on the list.

The money that went for was absolutely above our budget.

-Right.

-We have a certain budget

and the next one along was this one, which was within our budget.

That story is not that funny.

It is funny for us because the one we wanted,

we didn't get a look-in on.

That's the funny bit. And we didn't want to come away empty-handed.

# Funny

# But I'm not laughing. #

While Dave may have been short of funny stories,

they were not short of expertise to turn this around.

Dave has his own construction company

and Kevin has a drainage and groundworks company.

The original plan was that it would be the start of a rental portfolio

and they had a 12-week timescale to carry out some big plans.

Top to bottom. Take all the chimney breasts out, top to bottom.

Take everything apart and the walls will be re-skimed where necessary.

New floorboards. New heating system. Rewire.

It is an interesting layout, as well, isn't it?

It is quite higgledy-piggledy all over the place.

What are you going to do to change that?

The worst part for us we think is the kitchen area here

because with the stairs coming up from behind that wall

it's going to take a little bit of imagination.

There is no back yard to this property either

but the passage is there, which is a back yard.

So, we can do things with that to make light work of the kitchen.

Put white goods in there, that sort of thing.

So, when we came back four months later,

had all the building work taken place?

Or had buying blind thrown up some more problems?

The bathroom had been redeveloped while the rest of the house

was awaiting redecoration after being re-plastered.

That corridor that led to the second front door had become a WC,

giving the property a ground-floor loo.

With Kevin away on another job, Dave and his wife, Linda,

came to explain all the work that had been going on.

The top two rooms are both bedrooms and they just needed squaring up

and stripping back and rebuilding basically.

Floorboards were replaced where necessary.

The middle floor, the bathroom, that was a total disaster.

All the floors came out of there. They were replaced where necessary.

And the whole place has been rewired and re-plumbed.

Then we are on the sitting room which is the last room to do.

So that will be happening in the next few weeks.

We will be into that and squaring that away.

There wasn't much left to do, other than add a kitchen.

A kitchen we were interviewing them in, which was located, erm...

Not here.

No, not here either.

Not here either.

OK, I've got no idea.

I will let Dave tell you where they put the kitchen.

Within a few days we decided to take away

the chimney in the sitting room to give a bit more width to the

room and we dropped the chimney on to the floor upstairs, cleared

all the rubble away and we found a hole in the floor where the hearth was.

My grandson was here that day and we put a ladder down and dropped

him into the hole and he shone his torch around off his phone.

And it became quite clear that we have to use this room.

A secret cellar and that became the kitchen, saving space upstairs.

It allowed them to have a dedicated living room space on the ground floor.

The original room which was a lounge and kitchen,

we were struggling to get it to look anything.

So to find a cellar, it was brilliant.

I came down when they had made access into it. It was very dark.

I had a torch.

It was an earth floor and I thought it's got to be very light in here.

So the vision was to have a light floor,

light walls and I wanted a white kitchen but it was too white.

So, we put the floor down and then carried on with

the rest of the kitchen equipment.

And really, I am so pleased with it.

They had originally wanted to rent the property and had found

a way to keep it in the family, at least in the short term.

Stephen, our son, I think he's renting it.

He is in need of somewhere to stay,

so it can be here until he moves on or whatever.

Then the house will be rented out.

And that was back in November 2014.

At that point, they thought another four weeks of work would finish it.

But did it?

Or were there more surprises and not nice ones like hidden spaces?

You can find out later in the show.

So, when it comes to renovation hold-up reasons,

well, I think we've heard them all.

Yes. From bats to owls to newts to archaeological digs.

So, what about the two remaining buyers on today's show?

Did they make it in time?

Earlier in the show in the increasingly popular London

area of East Ham, I went to see a two-bed first-floor flat

which had a guide price of £100,000 plus.

But that modest guide price wasn't all it seemed.

The lease only had 58 years to run

and that meant it was unlikely to get a mortgage.

And the lease wasn't the only thing that needed renewing.

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

And the layout needed a change, too.

I have seen hundreds of properties like this on Homes Under The Hammer,

but not so often have I seen the rooms divided like this.

I mean, this clearly is a partition so this little tiny box room

just through here, that is not really working for me.

I would be inclined to take all of this down

and have one nice big living room here and make next door the bedroom.

Muzzaba and Raheema had a few property developments under their belt

but the change for them was that this £156,500 purchase

was their very first at auction and they hadn't even meant to buy it!

So, what happened? How did you end up walking away with the flat?

I think your programme inspired us and we started to get interested.

We said, "Let's raise our hands" and we started.

So, you are blaming us at Homes Under The Hammer? It's our fault!

But there was more cause for celebration

than just buying the property.

-And a little birdie has told me that it's your anniversary today.

-Yes.

-How many years?

-14 years today.

-Congratulations, guys.

I hope you are enjoying spending your anniversary on Homes Under The Hammer.

That's the present for her!

Three months on, it's time to find out

if the happy couple are still celebrating.

I think you can say they have changed all the colours for the better.

There is no magnolia here.

# I used to dream in black and white

# Now I see the world in a different light

# Your love colours

# Colours everything

# Your love colours

# Colours everything

# Your love colours

# Colours everything

# Your love colours. #

Well, colour me impressed.

Layout changes and those bright tones have really cheered this flat up.

With some building work going on nearby, we nipped out to

a local cafe for some peace and quiet and a quick coffee.

# You are the cream in my coffee. #

So, what have they been up to?

We replaced the heaters and put in new heating systems.

We replaced the whole bathroom.

A new bathroom. The kitchen.

-Some of them we reused.

-We recycled bits of the kitchen. Some units.

The boiler was there before and we made it a utility room.

So, a smart job all round

and I'd particularly like to know who came up with that bold design.

We worked together, actually. This combination.

I chose the colour.

-She chose the colour.

-I like red so I chose the red.

And he chose the green. He chose the tiles for the bathroom actually.

And the kitchen.

Of course, one of the downsides was that short 58-year lease

and that is subject to negotiation with your freeholder.

Now, the couple need to get a valuation surveyor

and a solicitor to sort out the issues.

Most leaseholders have the right to extend the lease for over 90 years

once they have owned the property for two years.

But Muzzaba and Raheema will have to factor in the costs and legal fees.

Talking of money, how has that budget gone?

Budget-wise, you will be pleased to hear that we have actually gone under the budget.

I was trying to hold his hand and not spend too much

because we have another project to finish off.

So actually, how much did we spend?

Nearly £7,000 we have spent.

All that hand-holding clearly paid off.

However, they did go over their timescale and it took them

12 weeks to get to this point.

They've had one or two setbacks here and there,

but are we still enjoying the property development game?

12 years I am doing this, so it is enjoyable. There isn't any problem.

-But this time, too much work...

-For you to do.

-..at the same time.

We had this house and another project at the same time.

That's why I get...

You got a bit tired of it.

Not tired. Time-managing.

Time-managing was the problem this time.

Two projects at one time can be tough,

but back at the current project we invited two local estate agents

to tell us what's the most profitable route for Muzzaba

and Raheema, based upon their total spend of £163,500.

The agent who saw it first can explain the effect that short lease

can have and then it's time to hear those all-important valuations.

The renewal of a lease can obviously cause a bit of a delay because it

depends upon how open the freeholders are to the negotiation process.

It could take a few months for that to happen

so it could delay timescale and could affect the prices, as well.

Without renewing the lease on the property as a two-bedroom,

you're going to be looking in the region of about £150,000.

In my opinion, with the currently lease,

the property is worth £165,000.

That is quite disappointing because we bought it for 156,500

and we have spent about 7,000.

And the legal costs and everything.

But probably he is right, he doesn't want to sell it

so if we get this price we're definitely not selling it.

At that top £165,000 valuation,

the couple could make just a £2,000 pre-tax profit.

However, the agents did say that if they do extend the lease

the flat could sell for anything up to 220,000.

So it looks like this is well worth doing if they want to re-sell.

However, Muzzaba and Raheema are more interested in the rental figures.

The rental value of this property would be £1,000 per calendar month.

For rental purposes, obviously the renewal of the lease doesn't affect it,

so they're going to be looking at somewhere in the region of £1,100 to £1,200 per calendar month.

That is actually the kind of offer we're getting from people.

We have got two or three tenants or people who are interested

and they have offered us 1,200.

£1,200 per calendar month could bring in just under a 9% yield.

So, do they still think this is a good long-term investment?

In property, over a long time, there is no loss.

I believe there is no loss.

So, we will keep it for the rent so it's not going to be a loss.

We return now to Maryport in Cumbria.

When I first visited in July 2014,

I came to see a three-storey three-bed mid-terrace guided at £35,000.

Good things come in threes but inside, triple the problems.

Layout, a long corridor that did absolutely nothing and...

Urgh! That's not good.

So, a lot of work to do on this one.

But that didn't daunt Dave on the left and his business partner Kevin.

They paid right on the guide price at £35,000

and had big plans to have this ready for rental in just 12 weeks.

Take all the chimney breasts out top to bottom. Take everything apart.

The walls will be re-skimmed where necessary.

New floorboards. New heating system. Rewire.

When we came back four months later,

they had installed a stylish bathroom,

replastered all the bedrooms

and they had used the long corridor to install a downstairs loo.

The original schedule went out of the window

when a sealed up basement was discovered.

It was a bonus to have a room no-one knew about

and suddenly there was somewhere to put a spacious kitchen.

Dave's wife, Linda, had taken charge of it.

The original room which was a lounge and a kitchen,

we were struggling to get it to look anything.

So, to find a cellar, it was brilliant.

# Take your time. #

So, nearly nine months on from when we first met the team,

have they finished and was it worth taking the extra time?

# I've been waiting patiently

# Take your time

# Don't need to rush because it only gets better

# Take your time

# Take your time Take your time

# There's no need to rush because it only gets better

# Take your time

# Take your time

# Take your time

# Oh-oh-oh-oh. #

Unrecognisable from before, but a few things left to do.

Dave and Linda can take us through

this longer-than-expected renovation.

Firstly, we were very concerned about how the layout was.

Upstairs is fine.

But where the kitchen was under the stairs in the sitting area,

that's where it was originally.

That was a concern, how best to make that a kitchen.

After that of course we found the cellar, which actually made

the house because the kitchen diner is down there now.

That has made it such a more pleasurable house.

To finish the house was the sitting room because we used

that as a workshop while we worked upstairs and downstairs.

That was the last room to get done.

After that, the carpets were laid

and just niggly little bits to finish. Snagging, they call it.

-All the decorating.

-And finish the decorating, that sort of stuff.

Snagging is what builders call the process of checking over

a project and identifying any defects and solving them.

It usually is little things

but they make all the difference to a professional finish.

But by having the kitchen down in the basement,

they now have an open plan dedicated living room.

But any ideas why the basement was sealed up?

Apparently, years and years ago, before central heating I suppose,

they were considered very draughty and very cold and very damp places.

So the sitting room floor or the ceiling to that cellar

was draughty and they covered them over and lost them.

So at some point in history it was lost

because it wasn't used or it was too cold or draughty to use.

The access to that cellar used to come off the sitting room.

We found the old staircase in place when we lifted the lounge floor.

So, it was accessible but lost some time in the past.

With an unexpected fourth floor,

and Dave and Kevin's busy schedule with other jobs,

the project overran to nine months.

What about the budget?

The total cost including costs from the auction

and whatever is around 25,000.

And is the plan still to rent?

Initially, yes.

Then we changed our minds and my son was interested in buying it.

Then I changed his mind because he's not!

It is now up for rent for let.

Time to find out if Dave was right not to sell

to his son by getting the opinions of two local estate agents,

starting with the agent from the auction house who sold it.

This is my third visit to the property.

Now that the work is completed,

it has made a complete transformation of the property.

They have made a fantastic job of all the renovations.

Unearthing the cellar was a major point to the refurbishment.

I came in while the owners were still doing some work to the property.

I think they've done a fantastic job.

It has really modernised the property.

A nice modern kitchen and refreshed everything inside nice and neutral and modern and very spacious.

It's taken them a lot longer than the 12 weeks

they first expected and all those months ago they bought this house

for £35,000 and have now spent £25,000, including some fees.

So, given they have invested £60,000 in total, what would this

house sell for now and what could they expect on the rental market?

On the open market,

I believe the property would achieve between £85,000 and £90,000.

For rental, between £450 and £475 per calendar month.

If placed on the open market,

we would expect to achieve a sale price of around £90,000.

On the rental market, with strong demand,

we would expect to get £450 per calendar month.

Selling the property for that £90,000 valuation could bring

a pre-tax profit of £30,000.

While renting at the top value of £475 per calendar month would

give them a very healthy yield of 9.5%.

So, what's their reaction to those values

and do they mean a change of plan?

-Fantastic.

-Very pleased.

-The values don't sway.

We will still rent the property out for at least two years and then

review the situation and see how our pension fund is in that time.

It might be one for the pension fund but the question is,

when are Dave, Kevin and Linda actually going to retire?

A move into redevelopment was a new career for all of them.

So, have they enjoyed their first experience?

-It has been a joy. It's been nice.

-We have enjoyed it.

Although, I haven't worked on it much!

No. I take my instructions every night!

Well, did those stories inspire you?

Have they given you pause for thought?

If so, join us next time for more of the same here on Homes Under The Hammer.

-Goodbye.

-Goodbye.

-Goodbye.