Episode 23 Homes Under the Hammer

Welcome to the show!

Now, it's a fast-moving property market

so when's the best time to jump aboard?

And where's the best place to start?

Yes, maybe you should consider buying your home under the hammer.

Well, it's not always easy to tell at first glance

if the property is going to make you any profit.

There's always one way to know for sure -

do as much prep as you possibly can and then make a sensible decision.

So, is that what the buyers on today's show did? Let's find out.

This one-bed London flat has a great selling point.

A real bonus,

through this door, a roof terrace.

And the buyer of this Telford flat

has a novel way of stretching his budget.

Tonight, I move me camp bed in and we'll doss here

for three nights a week.

And in Derby, I discover a Homes Under The Hammer rarity.

It's all just a bit shiny and lovely.

Do you think we've walked in on the reveal?

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.

Well done.

This is Camberwell in south London.

Bordered by East Dulwich, Peckham and Herne Hill,

it lies just three miles south of the centre of the city.

Well, Camberwell is very well located.

It's certainly got its fair share of transport links,

not to mention endless buses.

The property I'm here to see, then, starts off pretty good.

Good location.

£215,000-plus was the guide price, a two-bedroom flat through this door.

One possible downside is that the flat is above

a commercial property - and a restaurant, at that.

But it is tucked away to the rear of the building

and comes with a 125-year lease.

Well, the first thing to say is you have to travel a long way

to even get to the flat behind the road.

This corridor here, which is a communal area,

and then into another corridor which is owned by the flat itself.

At least this is reasonably bright and light.

But it does throw up the whole issue of any work you're doing here,

you're going to have to bring any materials you need in

and any rubbish out, which is definitely something to consider.

But what have we got?

When you finally get into the main body of the flat,

there's a half-decent-sized bathroom there, which is quite good.

And, then, a really lovely surprise.

Look at this. Wasn't expecting that.

A really nice-sized living area.

You've got a kitchen off it there. It's not a bad size.

It could do with some new units but apart from that, it, yeah,

it's pretty decent. Something which is a bit more serious is this.

Signs of damp. Yeah, that's going to need a bit of sorting out.

But then another little area which is just really lovely is this

bit here. It's kind of like a sort of open area.

You've got these roof windows up there throwing natural light

into this area. It's really nice, you can almost imagine

a Christmas tree, a huge one, here at Christmas, which would be great.

But it does throw up an interesting point in that you've got light

coming in from there, but there's no windows on the sides.

So, you're going to have to think very carefully about your lighting.

But apart from that...

..it's great.

I know that not everyone will like the no windows thing,

it could feel a bit claustrophobic for some.

But I think clever lighting could make this space something rather nice.

# So light up my room

# My room. #

And leading off the living area,

a staircase takes you up to the split level.

So, upstairs, here, two pretty good-sized bedrooms.

A really big one on that side and a slightly smaller one here.

But, a real bonus,

through this door out onto a little bit of a roof terrace.

Now, at the moment it's just got the kind of roofing materials.

You'd really want to put some kind of a fence around there

to make it safe and maybe some kind of a decking on there.

But, of course, outside space in London properties

is an absolute premium so the fact that you've got the option there...

Oh, and also through a door through that bedroom onto another

roof terrace, is a real big bonus.

A few words of caution, though. You would need to check the deeds.

Just because there are doors, you can't assume you have

the right to use them.

Your freeholder might have a say in it, too,

and, of course, with heights like this, you can't mess about,

so sensible safety measures have to be thought about

before you step out.

Now, my guess is that the flat's actually been built onto

an area that was probably, at some stage, just almost

like a courtyard or a rear area to the shops along the road here.

And it works, actually, quite well.

The only issue you might have is the proximity to commercial buildings

cos, basically, mortgage lenders do not like properties

that are in close proximity or adjoined to commercial properties.

So, really, just get that checked out

and make sure that the mortgage adviser or the mortgage company

knows exactly what you're intending buying and what is very close to it.

# He's much too close for comfort now. #

Any mortgage provider may well be concerned about security,

fire risk and the general marketability of your property

when it comes to selling on.

But is the flat's proximity to commercial premises

a concern to a local estate agent?

# She's much too close for comfort

# Now. #

My first thoughts with flats above shops is you've always got

to be a little bit careful,

but this has got to be one of the best ones I've seen cos,

as you come in downstairs,

you've got a reception on the ground floor, like you would a house,

then stairs up to a second floor with the two bedrooms.

Yeah, I really like it.

OK, but what would he do to maximise the flat's potential?

If this was me coming in, I mean,

other than redecorate it to my taste, not a lot.

The bathroom, the kitchen are not bad

though they could be updated a lot more, once again to taste.

I would just get the damp sorted out and then paint

and then take my time to lay out, live in the property,

get a feel for it and then decorate it appropriately.

This flat was guided at £215,000.

If the work the agent suggests was done,

what could it fetch on the open market?

Once this has been done up, I believe the sale value

would be around the £270,000 mark.

And how much could it generate on the rental market?

Rental area-wise, it's very, very good.

Per calendar month for a two-bed,

you're looking around £1,200 per calendar month.

Bit of a funny one, this, isn't it?

Cos the general location of the flat here in Camberwell is really good.

But the location of the flat itself behind these commercial

buildings could give it an issue

when it comes to getting that all-important mortgage.

It needs a bit of work and there is that damp issue.

Having said all that, it's a really nice flat with a really good feel

so I'm sure it was a popular lot when it went under the hammer.

Lot 95.

Two-bedroom split-level flat.

Well located in the centre of Camberwell. 210, anywhere?

You bidding? Thank you. 210 I've got.

How much? 211? 211, thank you.

212? 212. 213?

214? Yeah, 214, 215,

216, 217, 218.

219, new place. More competition.

220, 221,

222, 223, if you want?

224, 225,

226, 227?

228, 229,

230,000.

231? 231?

Have a think. If not, 230 for the first...

..230 for the second...

..230 for the third and final time... All done?

Sold. 230, well bought.

And, so, for £230,000,

the two-bed flat in Camberwell, south London, was bought by Will.

He's just finished a four-year degree in materials engineering

and is now working for a music promotion company

and this is his first property purchase.

-Will, good to meet you.

-Hello.

-Congratulations.

-Thank you.

-Good flat.

-Thanks.

-Yeah. Tell me why you wanted to buy it.

So, I moved home about six months ago after I graduated from uni.

And I think as soon as I moved in, my mum and dad didn't want me

to be there any more.

And so we started looking around for little places quite near

to central London. So, within cycling distance,

-just to avoid the Tubes, really, in the morning.

-OK.

And this was one of the ones that we looked at and was nice

-and within budget.

-So, you went away to university. Left home...

-Yeah, for four years.

-..finish, came back, climbed back into the nest.

Yeah.

Begged for my room back. And then, yeah, that was it.

Mum and Dad said, "Er-rr-rr?!"

"Can we get rid of you again?"

# Oh, you had better go now

# Go now, go now

# Go now... #

Aw, but don't worry, Will isn't being treated badly at all.

In fact, he's had quite a bit of help.

Will's parents have their own rental portfolio

so have given him guidance.

Plus, this purchase is being aided by the bank of Mum and Dad

so any possible mortgage problems aren't an issue for the time being.

Now that he's in charge of his own pad, what's the plan?

First thing is to sort out the heating, I think,

cos it's a bit chilly. And, hopefully,

there's quite a lot of damp, so that will get rid of some of the damp.

Change the bathroom.

Get rid of the bath cos I'm not a bath sort of guy.

So have a nice big walk-in shower.

-Get a new kitchen and just redecorate.

-OK.

Try and sort out the roof a bit to make it a bit more

of an entertaining area.

Have a few parties up there. It'll be quite nice.

-So, who's going to do the work?

-So, I play water polo in Kingston so...

-Right.

-..one of the guys there is a carpenter, so I've known him

for seven or eight years.

-His brother's an electrician and his dad's a plumber.

-Wow.

So they're all coming as a team,

so I think they'll be able to do most of it.

I think they can build a house, so I think they can decorate this one.

-So, what about budget for the work?

-So, we're hoping, obviously,

we don't know how bad the damp's going to be and how much that's going

to cost, but hoping to keep it under 15,000.

What do you think is causing the damp?

If you look outside, hopefully, it's just a gutter,

an overflowing gutter.

But, again, until we get a proper look

and someone who knows a bit more about it to

tell us about it then, yeah, we're not really sure.

-And the timescale for the work?

-Hoping to move in within a month.

-Oh, wow.

-But, again, if the damp takes a lot longer

to sort out then it could be a lot longer.

But you're keen to move in and your mum and dad are keen to get you in.

-Yeah. Keen to get me out, I think.

-Exactly!

And why not?

They bought the flat, now it's time for Will to get on with it,

shake a leg and move.

# Since you've got to go, whoa

# You had better go now... #

It's got a great feel to it, hasn't it?

Yeah, I think it'll be really fun when it's all done up,

yeah, ready to move into, I think it will be cool.

What are you most looking forward to?

Having some friends round and having a few parties, I think, will be

-pretty fun.

-In your own place.

-Yeah. Like being back at uni, I think.

-Well, listen, brilliant. Good luck with it.

-Thank you very much.

And we look forward to seeing how you get on.

Well, Will's parents are keen for him to move out

and he is keen to move in.

However, with those issues of damp, I wonder if it will only be

a month before he finally sees this as his new party pad.

You can find out later in the show.

-DION:

-We're off to Shropshire and the town of Telford,

a new town created in 1963.

It's well placed for a commute, being just 20 minutes' drive

from Shrewsbury and 45 to Birmingham.

Population-wise,

Telford is one of the fastest-growing places in the UK.

Just a ten-minute walk from the town centre is this ex-council

development and the property I'm here to see.

It's a ground-floor, one-bedroom flat with a guide price of £35,000.

It's too cold out here so I'm going in.

This area was built in the 1970s, which I think you could make

a guess at by the style.

But overall, it looks well-maintained.

Right, straight into the hallway. You've got a boxroom to my right.

Very small, could you stick a single bed in there? Possibly not.

And a good-size bedroom with central heating.

You've got your lounge with double glazing

and a door going out to an outside space and a bathroom

there which is, again, a decent size and in decent condition.

Into the kitchen area, which... It's a bit of a running theme

in the flat, everything looks dated, it just needs tidying up.

Very minimal spend, though, in here.

Maybe bring it up-to-date just a bit more.

But apart from that, very little to do

and you could turn it around quite easy.

Well, as they say, so far, so good.

Though I'm not sure what to do about that boxroom.

I mean, seriously, you'd be hard pushed to get even a desk

and chair in here.

A second bedroom this is not.

# Am I living in a box?

# Am I living in a cardboard box?

# Am I living in a box? #

Otherwise, this flat is not too bad at all.

There is some tired decor and some rather interesting decor.

Red doors, anyone?

There's also a bit of outside space to investigate,

but don't get too excited.

Now, this is the outside space and it's tiny.

It's not a reflection on the flat at all, which I think's quite

well proportioned for a one-bed. It's in a bit of a mess here.

And I don't know why,

as I look around, we've got some nicely tended-to grass out there.

They've hemmed us in with the wall,

I feel like a chicken in a pen, to be honest.

I'm not saying this one's a bad egg

but the limited space here is a bit of a drawback.

However, with that guide price of £35,000,

I reckon this does have the potential

to be a pretty good investment opportunity.

But what does a local property expert

think of this one-bed flat in Telford?

First impressions, it needs a lot of work

but it is very good for investment potential.

Work I would primarily concentrate on is complete redecoration throughout.

Certainly get rid of the red painted doors.

I'd also do something with the bathroom.

I think you need to be quite a small person to get in that bath

and I think a shower would be more appropriate.

So, how much would it cost to give this place a spruce up?

I would suggest around about £3,000-£4,000

to get it up to a decent standard.

So, if it goes for anything near that guide price of £35,000,

then the new owner's outlay would add up to a possible 39 grand.

So, how much could it sell for?

Once this is renovated to a decent standard,

I would suggest an asking price of £60,000.

There's some good profit to be made here

but what about the rental option?

What sort of return could it achieve?

I would suggest a rental income of £425 per calendar month.

If you can get this flat for near the guide price,

it certainly makes sense as a buy-to-let investment.

But the agent has a word of caution.

One thing I would take into account

if it was an investor looking to buy, is you tend to find tenants in these

sort of properties don't tend to stay here for long durations of time.

It tends to be quite a quick turnover of tenants for this sort of property.

This flat is what it is.

You may need a new bathroom, you could put a new kitchen in,

but I think minimal spend and a very quick turnaround.

Let's see who fancied it when it went to auction.

Lot 35. It's a leasehold ground-floor apartment.

Two bedrooms. So, what shall we say for lot 35?

I beg your pardon, sir? It's only one bedroom?

INDISTINCT

Is it only one bedroom?

Well, if you've seen it, it's only one bedroom.

So, what shall we say, then? Can we say 30 to start?

30, he's in. It's probably two. 30,000...

LAUGHTER

30,000, he's in. We're going once on this. At £30,000.

31.

32? 32,

33? 34.

35, 38, 39?

£38,000. 39 anywhere else?

39,

40, 41, 42...

No? At 42, still with you, sir, in the middle at £42,000.

43 anywhere else?

If not, £42,000 for the first time,

£42,000 for the second time,

third and final time, £42,000.

You bought it, well done.

The man with the facts at his fingertips was Ray.

Ray paid £42,000 for this one-bed -

yes, definitely one-bed - flat.

Ray's no stranger to Hammer, having appeared three times.

The most recent, when he purchased a two-bed flat

in Dawley on behalf of a client.

Ray has been buying and renovating properties for other people

for the last three years, but he and his business partner,

Martin, have, over the last nine years,

acquired 18 properties for their portfolio.

Ray does the project managing for the properties they own

and he came along to tell me what the plans were for this one.

But, first, I wanted to get to the bottom of that auction confusion.

-Ray, nice to see you.

-Hi.

-Welcome back to the show.

-Thank you, Dion, thank you.

-Tell us about the auction, how was it?

The auction was quite funny, really, because when we did

the viewing on this property they had it listed down as a two-bedroom flat.

And even the chap who was doing the viewings with us, with the keys,

agreed that this is only one-bedroom flat.

So, on the day of the auction, I informed the auctioneer,

during the auction, this was only a one-bedroom flat.

And he did question me on it. He did ask me, have I actually viewed it?

And I had to say, "Yes, I've viewed it."

I know it's a one-bedroom flat

because I own one two doors away, exactly the same configuration.

So, it did cause a bit of confusion at the time.

Why do you think there was the confusion at the auction house?

The only thing I can think of is you have a small boxroom,

I think they must have classed that as a second bedroom.

But I can assure you, cos we looked at it in the other property

that we've got, that it is below the minimum square meterage

for a bedroom, so it would be illegal to advertise it as a second bedroom.

-Hence the hollering from the back of the room.

-Absolutely. Absolutely.

# Shout

# Shout

# Let it all out

# These are the things I can do without

# Come on

# I'm talking to you, come on. #

Well, it definitely is a one-bedroom flat which goes to show

you can't take anything for granted.

In fact, many councils have introduced minimum room sizes

which you must conform to.

And while these mostly apply to social housing,

it's always worth checking with your planning department.

In this case, Ray's policy of viewing the flat before the auction has paid off.

But, then, he's an experienced property buyer,

having got himself a portfolio of 18 properties.

About nine years ago we started. I was originally a mortgage broker.

I stopped doing that three or four years ago.

And a friend of mine came to me, he was cash rich, time poor,

I was time rich, and we sat down and we had a discussion

and we decided property was the way to go forward.

So, ever since then, we've been doing properties.

We're not hugely prolific, two or three a year,

but over nine years that's built up a little portfolio for our pension.

So, this was alongside your job and now it's your full-time job.

Yes, when we first started it was alongside the mortgage broker.

Then the recession came in 2007, that killed the mortgage side,

so we moved into this. I wouldn't say full-time,

but I'm semi-retired which is great for me at the moment.

So, are you buying properties like this, are they all similar?

Absolute priority is rental.

It's a pension portfolio that we're trying to build up.

One of the reasons we buy this type of property

is because you can almost guarantee you're going to get a 10-11%

return on your money.

It's one of the reasons why I like the area and this type of property.

Almost all our portfolio is in Telford.

It's the closest area to where I live in the south-east,

to Buckinghamshire, that I can get to, that'll actually give me

a 10%-plus return on almost every property you buy.

-You are a way away from home, then, aren't you?

-Oh, yes!

You take a property like this, tonight I move me camp bed in,

me kettle. And we'll doss here for three nights a week.

So, Ray, you'll actually move in,

-you'll bring a camp bed in or...?

-Blow-up bed.

-Blow-up bed?

-Yeah.

-One with a built-in motor.

-OK.

-Stick it in.

-Plug it. Up it goes.

Up it goes.

Sound as a pound.

Ray is happy to sacrifice comfort in order to maximise profit.

And his blow-up bed should help avoid a blow-up budget.

Staying on-site means he'll be saving plenty on petrol

and travel time.

While he's here, Ray plans to project-manage the renovation

with his usual team of tradesmen

he uses for his rental properties here in Telford.

He's got a budget of £2,500, but for that sort of money

what exactly has he got lined up for this place?

Strip the wallpaper.

The only problem you have in some of these properties is that they

tend to wallpaper directly onto plasterboard.

So, when you rip the wallpaper off you can end up with a terrible surface.

So, we may have to give it a quick plaster skim.

So, strip the wallpaper, skim it, paint it.

New carpet, new cooker, clean up the outside patio area.

Really, that's about it. A little bit more work in the kitchen

and tidy up the bathroom a little bit but not a lot.

Very minor, isn't it?

And how long is it going to take you from this to finish?

Well, we could do this one in ten days.

We're not going to

because we have another project going on at the same time.

And the workmen will go from one project

to the other project and back again.

So, I'm in no hurry to get this one done in two weeks,

so I'll give you a six-week timescale.

And you'll get them both done at the same time?

Both done at the same time.

-With your experience, it won't be a problem, pal.

-Thank you, Dion.

-Good luck, mate.

-Thank you.

So, Ray finally got his one-bedroom flat in the end.

And, again, he's chose wisely.

This will be a quick cosmetic turnaround. With his small budget

and that six-week period, will he get it all done?

Will he be happy with the finish?

You can find out later on in the programme.

Still to come, there's a blemish in Derby.

Yes! I am glad I found something

that's not quite right with this property.

And in Telford, there's a case of homesickness for Ray.

I quite enjoy coming up here, although after about the third night

I can't wait to get home.

-MARTIN:

-It was in the south London area of Camberwell

where we first saw a rather quirky two-bedroom flat tucked away behind

and above a commercial property.

This flat was an unusual layout with a long corridor leading

to a large diner with a kitchen off it.

It had the bonus of being split level, with two bedrooms upstairs

complete with access to a potential roof terrace.

But with signs of damp and a restaurant below,

this wasn't going to be to everyone's taste.

For Will, a recently graduated materials engineer,

this was a much-needed first step onto the property ladder.

# You, babe

# Steppin' out. #

Tell me why you wanted to buy it.

So, I moved home about six months ago after I graduated from uni.

And I think as soon as I moved in, my mum and dad

didn't want me to be there any more.

And so we started looking around for little places

and this was one of the ones that we looked at that was nice.

# It's time to go now

# Oh, no. #

Will's parents had helped him to acquire his new abode by

providing the all-important funding towards his £230,000 purchase.

And with his own savings he had a £15,000 budget to sort out

and refurbish his new nest.

He and his parents were hoping he could be in

and settled in just a month.

Two months later, we're back with Will to see

if he's made it a home from home.

MUSIC: On Top Of The World by Imagine Dragons

Well, he's certainly put the wheels in motion,

with a crisp white paintwork and useful shelving.

He's even found somewhere to put his bike.

That big lounge is an eclectic mix of furniture and fittings.

Will has installed a new boiler

and has had the internal damp sorted, too.

He's hoping it all dries out by late summer

when he'll fix the roof tiles that have been part of the problem.

The kitchen has been given a whole new lease of life.

The main things that have changed,

we completely gutted it at the beginning.

Got a new boiler.

And, yeah, took all the old units out, ripped up the old tiles.

I was going to go for all white, and then my sister persuaded me

to get a bright yellow one just to get a bit of colour, I guess.

So, yeah, I'm really happy with it.

Well, if the kitchen is a lot better, how about the other

room that was in a sorry state, that bathroom back down the corridor?

So, in here what we did was we blocked up the old doorway

and we moved it just further down the hallway

so we could make space for a walk-in shower.

And we got rid of the old bath and old toilet and sink

and fitted in completely new ones. We retiled the flooring.

Nice to have a nice, big shower and it's really powerful and, yeah,

it's a good start to the day!

So, an invigorating power shower now awaits once Will has

emerged from his upstairs bedroom, of course.

MUSIC: Amsterdam by Imagine Dragons

And with the second bedroom just about finished,

internally it's ready to go.

But what about the rooftop terrace leading off from the bedrooms?

Out there we just cleaned it up a bit and we got some chairs out

there and put some plants up there just to make it look a bit nicer.

Yes, it is lovely, Will, but it's definitely not party-ready yet.

Fortunately, Will has found the freeholder is open to having

any work done that improves the property, which is good news

and Will plans to sort this out in the future.

Please do that soon, Will.

Moved in sort of last weekend but gradually, over the whole time,

been moving things in.

The furniture's being here quite a long time.

And, yeah, I've got a friend who's moving in next weekend,

so when they're in I think it will feel much more...finished.

On top of getting a new home, Will's also got a new job

in Brixton, which is just a ten-minute cycle ride away.

So, the flat really is just right for him.

But what do his parents think of their investment?

Yeah, so, I think my parents came and looked at it yesterday

and I think they're pretty happy with it.

Pretty happy with the work that has been done.

So, yeah, they're keen to get rid of me,

given me quite a lot of the furniture and stuff, so...

# So it's time to say goodbye. #

While his parents were helping with the purchase of the flat,

the budget for the work was down to him.

So, how deep did Will have to dig into his pockets?

So far, I think we've just spent just over 14,000.

There was quite a big cost of getting the new boiler

which we sort of factored in for.

And, then, yeah, got a little bit left over to sort out the damp at

the end of summer and, hopefully,

we should be just about on 15 at the end of it.

A £15,000 spend on top of the £230,000 purchase price would

take Will's total cost to £245,000.

So, has this first step onto the property ladder been the right move?

What do two local estate agents think?

Firstly, the agent who saw it last time.

Coming back to the property, the changes are fantastic.

He's transformed it. It looks really good.

I really like what he's done with the kitchen. The new units, the black worktop looks really nice,

but the yellow above, I think it gives it a bit of dimension to

a very small area and makes it really interesting. I like that. Might have to nick that idea!

I like the split level, the fact that you can go up

to your bedroom at night and it separates the living area.

The outside space, I think it's a great feature.

It does need fencing put up around it,

just to make sure it's enclosed and secure.

Does it sound like we're ganging up on you, Will?

Well, let's tell you something you will want to hear - the numbers.

Not that this is going to be rented out any time soon,

but what kind of rental potential does this place have?

Rented, you'd achieve between minimum of £1,200 per calendar

month, with a maximum of about £1,400 per calendar month.

I think this property should market for around about £1,350 per

calendar month.

And even the lower £1,200 per calendar month would give

an annual rental yield just below 6%, but more importantly,

was this a wise investment of £245,000?

If you was going to sell this, once it's completely finished,

I think you'd be asking somewhere between £270,000 and £300,000.

I think currently with this market,

it should value for around about £290,000 to £300,000.

They're really nice valuations. It's nice to know that obviously that's quite a bit more than

we paid for it, so it's nice to know that the investment has been good.

Yes, a good investment indeed, with a potential pre-tax

profit of £25,000 to £55,000, less expenses, of course.

So, now Will's finally flown the nest to set up house on his own,

is he happy with the result?

Yeah, it's really nice to have the flat and to be here.

I've really enjoyed doing it up and it's been a nice little project.

Off to Alvaston now, a large suburb in Derby.

During World War II, Alvaston Park was used as a prisoner of war camp.

And nowadays, the park is home to a top-notch national standard

BMX track.

I am literally just a stone's throw from the lovely park

and only a couple of miles from Derby city centre and I'm here to

see this, a three-bed semi, and it had a guide price of £65,000 plus.

Looks really nice from the outside.

The inside can't be as good, can it?

The kerb appeal's great out there.

And walking in to the property, it's even better!

Wow! I was not expecting this.

Shiny, new, the floor's beautiful,

the windows look great,

there's a lovely fire surround and fire that looks new.

The paint feels new. It's all just a bit shiny and lovely.

The kitchen through here, again, a fabulous space.

You could easily fit a little table in there. Units, new.

So, you know on this programme, yeah, you have a before

and an after bit, do you think we've walked in on the reveal?

Guys, what do you think? This is the first look!

There's no doubt that this is a cracking property.

It even has what looks like a brand-new boiler,

and all on our first look.

# It was my first look

# Baby, that's all it took

# Was my first look. #

Now, if I was going to be fussy, then the bathroom,

very nice though it is, is downstairs. Too fussy?

Well, perhaps,

because a downstairs bathroom isn't always a deal breaker.

And upstairs, much of the same.

Bedroom one, two, and three.

Very similar to downstairs - clean, shiny and bright.

They all look fantastic.

The carpet is even so lovely,

it's all squashy,

it's really good quality.

It's a fantastic house, this.

As far as I can see, this would be a brilliant rental machine

because you can't really add value to a place like this, so I think

anybody looking at this property will first of all be a bit

surprised because it's not a usual Homes Under The Hammer type

house but, hey, this could be an instant renter,

get the tenants in, job done.

The nit-picker in me

has to point out again that there is only one bathroom

and it is downstairs, which isn't ideal,

so would you lose a bedroom to fit a bathroom up here?

Something to consider.

Aside from that, though, the bedrooms are pretty good sizes

and the decor is perfect.

This property could put me out of a job!

Yes!

I am glad I found something that's not quite right with this property.

The grass needs cutting.

Ha!

Yes! Told you I was a nit-picker!

Well, aside from that long grass and the downstairs bathroom, this

property at a guide price of £65,000-plus represents a sound investment.

But why has a property in such good order found

itself in the auction room?

We asked the auctioneer for his opinion.

Well, there's a whole raft of reasons,

but the main reason is usually because people have tried to

sell it by private treaty and it hasn't happened, for whatever reason.

A sale may have fallen through or they may just have had no interest.

May have been overpriced.

And they're now in a situation where they need to move it on.

So, auction is the opportunity.

From a rental point of view, this has got everything going for it, really.

From an owner-occupier's point of view, I think it would be a

slightly frustrating property,

in the sense that the floor area is very restricted, you've got

one smallish living room, we're in a kitchen which is not oversized.

The main issue is that whilst you've got three bedrooms,

none of them are large.

You have got a ground-floor bathroom which is accessed off the kitchen.

You just would never build a house with that design,

that configuration, these days.

And in truth, a ground-floor bathroom located off the kitchen is not

very user-friendly. So, what do you do?

You take it upstairs, you sacrifice a bedroom, it becomes

a two-bedroom semi, consequentially, your price is affected.

What do you do about it?

The answer is, if it's renovated, you do nothing, you just rent it out.

Well, in that case, assuming the buyer does do nothing

and simply rents it out, what could they expect?

It would have a rental value, I would have thought,

of about £525 per calendar month.

Which, if it was bought for the guide price of £65,000,

would equate to a very healthy 9.5% yield.

But what if it was resold outside of the auction house?

As it stands,

I would expect it to fetch something in the order of £75,000.

This is an exceptional auction buy, in my book.

It's nearly perfect, apart from that grass, of course.

So, who will be getting their mower out after the bidding?

Let's find out.

It's a three-bedroom semidetached house,

which has just had a total scheme of renovation and improvement.

Bid me where you like, 60 will start it.

60,000, thank you. 60, I've got, here on the front row.

At £60,000. 61 is bid there.

61. 62.

62. 63.

64,000. And five.

65. 66.

With the bids flying, we leave and rejoin at £73,500.

At £73,500, you can walk away with it today. 74.

75. 500? 500.

75. 500.

76? 76.

It's worth another shot.

£76,000.

No?

At £76,000 for the first time...

76,000 for the second time... Third opportunity. All done?

Sold at £76,000. Thank you.

The successful bidder was Taj, with that bid of £76,000.

Taj is an estate agent and is no stranger to property and also, no

stranger to Homes Under The Hammer, having appeared on the show in 2012,

when he bought another property in Derby.

I met him back at his latest purchase, to find

out his plans for this one.

-Taj, congratulations. Well done.

-Thank you.

So, did you expect to get this on auction day?

When the hammer went down and it was yours, were you quite surprised?

No, I had a good feeling, actually.

You always go in with an open mind with an auction.

You've got to stick to your budget, but then on the day,

anything can happen, so obviously, this one came up and it went to plan.

Did you do much research? Did you read the legal pack?

-Did you get a survey done?

-Yeah.

Well, I did read the legal pack, but I didn't do the survey

because I had a look at the property.

I was dragged along by a friend, so I didn't make the appointment.

It turned out to be a blessing in disguise because when I came

and saw it, I thought, it's already done, nothing to do, it's a

great rental property.

You were dragged on by a friend, just to have a look.

So, you weren't planning on buying this.

-Not particularly this property, no.

-Oh.

-I was looking at others.

But obviously, I've been buying property for a number of years

now and it's not your typical auction property.

It is not and that is the big thing with this one.

It's not a typical Homes Under The Hammer scruffy,

dirty house that nobody wants to put their bags down in.

This is something that's very new and shiny and well kept.

Do you know any of the back story, the history of this?

It was on the market and the vendor didn't really achieve the price

they wanted and it ended up in the auction room.

So, what are you going to change in this house? What can you do?

-The only thing I really can do is cut the grass.

-Just cut the grass!

-Yeah.

You've just got to cut the grass. That's what I said! That's the only thing I can see wrong with it.

And what about upstairs?

Upstairs, just basically probably feature the fireplace,

make it a feature wall.

But that's it, really.

Now, you've got the typical bathroom downstairs scenario,

do you move it upstairs, do you damage

the value of the property cos then you're taking away a bedroom?

I know lots of people that would rather an upstairs bathroom

and the other half quite happy to have three bedrooms.

In terms of rental potential,

it's much better to have the three rooms upstairs.

Exactly. Yeah.

So, obviously, I know next door's a two-bedroom with an upstairs

bathroom, but this is a three-bedroom with a downstairs bathroom.

So, from a rental perspective, obviously, you're going

to get more rent, having an extra bedroom.

So, I'd leave it as it is.

And it seems that Taj's view on this seems to be correct

because he already has a tenant lined up

and has agreed a rent, which will give him a yield of 8.6%.

Unless there turns out to be some hidden horror lurking somewhere,

this must be one of the quickest stories we've ever filmed.

I'm not sure we shouldn't just go out the door

and come back in for the big reveal.

All this is a far cry from that previous property of his that

featured on the programme before.

It was a three-bedroom terraced property in the city centre

end of town.

-And we basically converted it into a multi-let property.

-Wow.

-And I bet you needed to do a whole lot more work than this one.

-Exactly, yeah.

-How different!

Very different, so we made it into a multi-let property,

brought it up to standard, spent a lot of money on it actually, but it's

very nice cos it now is fully let and we make a good return on that.

Taj, lovely to meet you. I was just about to say,

"I can't wait to see what it's like when it's finished,"

but there you go, I've just seen it, because it is finished.

-Lovely to meet you.

-You too.

-Well done.

-Thank you.

Apart from cutting the grass, I think

Taj has landed on his feet with this newly decorated property

and with over an 8% rental yield, well, it could prove to be a winner.

All sounds too good to be true to me.

Let's hope there are no nasty surprises further down the line.

Join me later on in the programme and you can see how Taj gets on.

We've seen how everything turned out for one of our buyers,

but there's more to come.

Yes, was there potential profit to be released?

I think we should take a look.

We return to Shropshire, to the town of Telford,

which, with its increasing population and business expansion,

makes an ideal place for the buy-to-let investor.

That's exactly what attracted Ray, who, along with

his business partner, bought this one-bed flat for £42,000.

And if Ray looks familiar that's

because he is no newcomer to Homes Under The Hammer, having previously

appeared on the show with properties bought in, you guessed it, Telford.

Although he hails from Buckinghamshire,

120 miles away, Ray focuses on the Telford area

because of its good rental yields.

And in order to protect that budget

you, of course, need to get the budget under control.

Ray had a plan that, well, blew me away.

-You are a way away from home, aren't you?

-Oh, yes.

You take a property like this.

Tonight, I'll move me camp bed in, me kettle.

Erm, we'll doss here for three nights a week.

So, Ray, you'll actually move in, you'll bring a camp bed in?

-Blow-up bed.

-A blow-up bed?

-Yeah, one with a built-in motor.

-OK.

-Plug it in and off it goes.

-Sound as a pound.

Ray was tackling two properties at the same time, so kipping

in this one made a lot of sense.

He thought a six-week timescale was generous as this was an easy one and

stripping the wallpaper and skimming the walls would be the hardest bit.

With a budget of two-and-a-half grand,

camping gear on standby, he was raring to go.

Six weeks later, how is it looking?

Well, exactly as Ray intended - redecorated and re-carpeted.

The flat is fresher and smarter all round.

The kitchen has had the same treatment, with some retiling

thrown in for good measure, but it looks like Ray has added

a bit more to this flat than originally intended.

The only thing that we changed our minds on on this property is

the fact that we decided to semi-furnish it.

We were actually gifted a few items, like the sofa and the chair.

Once we were gifted that, then we thought why not put in

a washing machine and fridge-freezer and a TV.

The extra rental we should get should well cover that

and it makes a change from our normal offering.

Good idea, Ray,

it does make the flat more appealing to a potential tenant.

# A little of that human touch

# Just a little of that human touch... #

And the boxroom? Well, it's still a box,

but it could make a decent enough study.

And moving on, the bathroom has had a lick of paint

and is in the pink.

The only thing that we were concerned of before we actually started

the work was what we'd find under the wallpaper

because you never know what you're going to hit.

But, fortunately, all the plaster under the wallpaper was of a good

standard, so filled in a few holes, quick rub down, paint on top,

no problem at all.

And just as Ray predicted,

sprucing up this place only took ten days.

But in fact he's been a busy boy over the past six weeks here in Telford.

I have used this property to actually stay up here two or three nights

a week because I've got two other properties at the moment that

I'm renovating and there is another one in the pipeline.

I quite enjoy coming up here for two or three nights,

although after about the third night I can't wait to get home.

The trouble is after three days of being at home,

I can't wait to get back up here to see how the work is going -

so it is not a bad compromise.

# Three nights a week

# You're gone

# Three nights a week, that's too long... #

And for Ray, his time away from home makes plain good business sense.

We buy in Telford mainly because here we can get

something in the region of 10%. Down south, you're lucky to get 5%.

Therefore, by the time you've remortgaged

the property down south, you are not actually making any income,

you're relying purely on capital growth

and that's not the way we want to work.

Of course, getting that sort of yield on your investment

depends not just on how much you spend buying the place

but also on how much it costs to do up.

Our original budget without fees was £2,500.

We came in at £3,500.

I was probably a little optimistic to begin with, as we all are,

but then we weren't expecting to semi-furnish the property,

to buy fridge-freezers, TVs, washing machines,

and items like that which helped to push us over the budget.

Added to that purchase price of £42,000,

the total outlay here is £45,500.

Time to find out what two local estate agents thought of this one-bed flat,

starting with the agent who first saw the property before its makeover.

The changes that have been carried out to

the property are generally good.

It's all been decorated and made nice and light throughout.

New carpets.

Generally, good for the market at the place that this would appeal to.

I think the property is OK.

I think the original kitchen has been retained,

so you've a good-sized kitchen/diner.

I would certainly say it is suitable for the rental market.

For the rental market, the standard of finish

and the improvements that have been carried out it is probably spot on.

It looks nice and fresh, clean as you walk in,

but absolutely fine for the rental market.

And that is exactly where it's going.

But having spent £45,500, what sort of rental return could Ray expect?

If this property was on the rental market furnished,

I would say it was worth £425 per calendar month.

Fully furnished, I would suggest an asking price of £450 per calendar month.

We have the rental on the market at around £450 a month.

I would normally expect to get between 400

and 425 for an unfurnished property,

so I'm hoping to get an extra £25-£50 a month because it is partially

furnished and I think £450 is a fair price and we will achieve it.

Ray knows his onions here and if he did manage to get that rental

income then he could expect an amazing annual yield of just under 12%.

But the agents reckon selling the house could

achieve between £55,000-£62,500, giving Ray a potential profit of up to £17,000.

Potentially a good mark-up on the resale,

but by the time you pay solicitors' costs and things

like that, it is not quite the return that most people think it is.

So, no, we will stick with this property for some time to come.

So no doubt this property will be earning Ray

and his business partner a nice little income

to add to their growing portfolio.

And surely after this project,

Ray can start to think about putting his blow-up bed into storage.

We are not particularly cash-rich and I think people think

because we're buying properties at auction that we are particularly

cash-rich. We're not.

We have to wait till we remortgage one property before we go

and buy the next. That is quite a slow process,

but at the end of the day our objective is to become both

cash-rich and time-rich.

We're off now to Alvaston in Derby, where earlier

I discovered a cracking three-bed semidetached house which didn't tick

any of the boxes usually associated with Homes Under The Hammer.

It didn't need a new kitchen, or a new bathroom,

the decoration was pretty much perfect, there was even a new boiler.

After hunting high and low, I eventually found something.

Yes, I am glad I found something that is not quite right with

this property.

The grass needs cutting. Ha!

And that was it, really.

It went to auction with the guide price of £65,000-plus

and was bought by Taj, a local estate agent, for £76,000.

When I came and saw it, I thought, "It is already done,

"nothing to do, yeah, it's a great rental property."

So top priority for Taj was to get this ready-made rental

property occupied and earning a return.

It's five months since our first visit

and we're back to see how Taj has got on.

# Well, the times, they are a-changing. #

And time is the only thing that's changed for this semidetached

house, except it looks like Taj has found a tenant for his new property.

It appears the new tenant has settled in nicely.

Two bedrooms are occupied

and the third is being used as a storage space.

So what was Taj's philosophy for this project?

So many investors want a ready-made property

they can basically, you know, let out.

They haven't got the cumbersome issues of doing the refurbishment.

Looking back at the things I've done,

I was probably getting a bit tired with a lot of refurbs

and I just wanted something effectively that we could let out,

and achieve the yield that we were looking at, really.

Taj only had two jobs on his to-do list.

First was installing a feature fireplace on this bedroom wall.

We rented the property very quickly,

so I think we didn't have the time to sort of spend money on the property.

OK, and the second thing was to cut the grass.

Come on, Taj, surely you've cut the grass?

I think when we purchased it, it was close to the winter period,

so it was very difficult to get out and actually do any gardening.

So I did suggest to the tenant that it would be very appreciative

if she could effectively try and do something with the garden

when the weather was better.

Well, this is indeed a rare occasion where a property on

Homes Under The Hammer has had absolutely no work done on it by the new owner

but everyone is happy.

The tenants have a smashing three-bed home,

Taj is getting his monthly rental

and Taj's lawnmower has one less job to do.

# If you don't let the green grass fool ya. #

Time to get two local property experts along to give us

their opinions on this, well, hassle-free project.

First impressions, it's a nice, light, airy, well-decorated

neutral property. Good space, good layout.

The layout is good.

It has a ground-floor bathroom, which can put some people off,

but it does mean that you do get the three bedrooms on the first floor.

The demand for the property should be good for both the sales market

and the rental market.

There are a lot of tenants looking to rent in this area

and it is a good area for first-time buyers.

If I bought this property at auction I wouldn't have changed a thing.

I think the current owner has done exactly the right thing,

change nothing, mow the back lawn, move the tenants straight in.

The property definitely appeals to local workers,

people who perhaps work in the city centre.

There are great links here in Alvaston to the city centre

and beyond, and also to the M1 and the airport.

Properties like this to come up auction are a rarity,

ready to go, they don't come up very often,

you do have to keep a good watch over what is coming up.

And now for the numbers.

Taj's plan is that this house will remain as part

of his rental portfolio, so he's not planning on selling.

However, it would be remiss of me

not to find out how his investment is doing on the resale market.

Remember, he spent £76,000 on the purchase

and nothing on the renovation.

The sales figure for this property on the open market

would be between £85,000 and £90,000.

I would expect to achieve approximately £85,000 for this property.

That top figure could mean a potential pre-tax profit of £19,000.

What about rental?

In the current rental market, I would expect this to rent between

£475 and £495 per calendar month.

For rent, I would expect to achieve up to about £500 per calendar month.

Well, the rental figures are...

As I always say, the proof is in the pudding.

We are achieving £550 per calendar month.

That means the yield on Taj's investment is a very respectable 8.6%.

Now, while this one appears to have been a very easy-peasy project,

it's not always like that, so Taj has a word advice.

Have a contingency.

I think a lot of developers overlook a contingency

because things never go to plan when you are doing a development.

If you have effectively done your homework,

done your due diligence, established your resale values,

then there is no reason why your project can't be a success.

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

We will be back with more properties and their owners for you next time.

We look forward to seeing you then for more Homes Under The Hammer.

-See you soon, goodbye.

-Goodbye.

-Goodbye.