Episode 28 Homes Under the Hammer

Hello there. Is it a good time to invest?

Property prices are reaching all-time highs

in parts of the country.

But be aware, because your cash might not go as far as it used to.

Yes, getting a good deal is a priority.

And one way you can do that is by visiting your local auction.

So, do you fancy nipping along to your local auction room

and finding out what's on offer?

That's exactly what today's buyers did.

Let's see what they came away with.

In Stoke, a two-bed semi has plenty of options for a layout change.

What there is, it just works.

Well, it will when you fiddle about with it a bit.

Get the sledgehammer in Willesden Green.

Plenty of possibilities in this London flat.

I'd like to see that come down.

And you know what I'm going to say - open the space up.

And in Dudley, you're spoilt for choice in this mid-terrace.

Two bathrooms for a two-bedroom house. Decisions to be made.

All these properties were bought at auction.

We'll find out who got them and how much they paid,

when these homes went under the hammer.

You bought it, sir.

Just on the outskirts of Stoke is the suburb of Meir.

And the estate is built on the site of a former RAF aerodrome

that closed in 1973.

But with lots of amenities and good housing stock,

it's plain to see why this is a great place to live.

When it comes to choosing a house, it's not just about the property,

it's about the outlook, the surroundings.

This is a really great start.

Because right opposite the property I'm here to see is this

lovely open space. The house itself? It sounds pretty good.

£50,000 plus was the guide price for this. Semidetached, two beds.

Let's have a look.

Ooh. Not a very good start, is it?

It is a modern-ish door

but it doesn't seem to be in very good condition. Hmm.

That's not brilliant either.

I feel like I'm going to come out and come in again!

A bit of damp, the moment you come through the front door there.

So, not the most auspicious of beginnings. But...

you get to this part and, actually, it's OK.

It's a nice-sized front living room. It's very dated.

I mean, the whole place is just saying, "Bring me up to date!"

Storage radiator here.

Obviously, you haven't got central heating, so that's something

you're going to have to factor into your budget.

Erm, through here?

Oh, right. Understairs cupboard.

That's a very grand door for an understairs cupboard, isn't it?

Onwards and through. OK. Through here, kitchen. Which is all right.

A downstairs loo, which is quite useful.

The kitchen itself is not a bad size, actually.

Clearly, units need replacing.

You might even want to open up that window, drop it down,

you'd lose a lot of space, in terms of where you could put units.

But maybe... I think that's a rubbish idea, actually.

This is what happens when you are thinking about properties.

You design as you go along.

You get first impressions, then you go, "That's rubbish."

The important thing is to recognise they're rubbish.

That was a rubbish idea I just gave you. Keep it as it is.

Cos you need the space for work surfaces.

This is a kitchen, for goodness' sake. So, yeah, what could you do?

Yes. Replace the units, really nice. I mean, there isn't a lot,

but what there is, it just works.

Well, it will when you fiddle about with it a bit.

A little idea light bulb went on in my mind and then the power went off.

Never mind. Let's see if I can cast more light on things as we go.

So, upstairs. Halfway up the stairs.

-HE LAUGHS

-One of the original windows.

Sash window. Look at that. It's quite sweet.

I wonder if you could renovate it. Maybe.

Really large double bedroom at the front, which is lovely. The master.

And, of course, it benefits from those views out across the green.

You've got a bathroom. It's not bad. Size.

You've got a bath in there, as you might expect.

But it's a reasonable size family bathroom, which is good.

The second bedroom, there are only two, is...

is at the back of the property here, and some lovely fitted units.

Reminds me of a caravan, in some ways.

Probably want to get rid of them though, wouldn't you?

And once you've got rid of them,

you'll realise how much space is really up here.

Between the two bedrooms,

I think there's actually space for a third with a few layout changes.

And, if you follow me outside,

I'll show you another way to create space.

So, out through a little side door of the property.

You get to see this nice driveway here, which is good news.

It leads to a garage, which, unfortunately,

isn't good news at all.

I reckon that's partly asbestos,

so that needs to be got rid of very carefully by a specialist company.

But at the back of the house, more good news.

A decent-sized garden, which is nice.

Then this space here, which I think is perfect for an extension.

In fact, what next door have done. Stick a big extension on here.

Maybe one storey, maybe two storeys, that would really add to

what is already, potentially, a really nice family home.

Yes, it does need modernisation.

But with or without extension, there's enough room for you,

the other half and some little ones running around.

What can a local estate agent tell us

about the area and the property?

In the local area, the rental market is the strongest.

If this was my property, I would have gas central heating fitted

and also redecorate through to bring it up to a more modern standard

and I'd be replacing the kitchen and the bathroom.

Then look at putting it on the rental market.

The agent thinks the rental market is best for this property.

It doesn't sound like an extension would be her favoured route.

So how much would it cost to get this up to rental standard?

My estimate for refurbishing the property would be

in the region of £10,000-£15,000.

The breakdown of them costs would be somewhere in the region

of £5,000 for having the gas central heating fitted,

then in the region of £5,000-£10,000

for redecoration and replacing the kitchen and bathroom.

So, £10,000-£15,000 on top of that £50,000 guide price

could mean a total cost of around £65,000.

Do the values make the investment worthwhile?

Once the work's completed, I'd place this property

on the rental market in the region of £400-£425 per calendar month.

For resale value, somewhere in the region of £70,000-£75,000.

Those figures could mean around an 8% yield.

If you wanted to rent this property out,

there could be a profit it in it, but it's not a great sales market

and you would need to be very careful not to overspend.

Well, clearly, it needed some modernisation, this one.

Once done, this could be a really lovely family home

with all that space around the back. It's got a lovely feel to it.

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

Lot 21. Guide price on this has been reduced down to £40,000.

We do want to sell it. 35,000, can I say to start?

Who will give me 35 to start with? 35 bid there. At £35,000.

Going once, 36 back left.

At 36,000. 37? 37,000.

38?

39?

No?

At 39,000, to my right. Looking for 40 now.

40,000 bid on the internet.

At £40,000? 41 anywhere else?

41 in the room. 42 on the net.

42?

43? 44 on the net.

45? 46 on the net. 47? 48 on the net.

49, sir?

49. 50 on the net?

51? 51. 52 on the net?

53, sir?

Shaking his head. 52,000, the bid's on the internet. At £52,000.

I'm selling it on the internet. He's back in. 53.

I think you're out now, aren't you?

Out on the net, so it's in the room at £53,000.

Another one anywhere else? £53,000 once then. £53,000 twice.

Third and final time, at £53,000.

You bought it, sir. Well done.

So, despite the guide price being drastically reduced,

the dated house did go for near the original guide, and it was

bought by John - who's just obscured from our view - for £53,000.

He has 40 years of property development experience behind him.

So I was keen to find out what he had planned for this two-bed semi.

-John, great to meet you.

-And you.

-Congratulations.

Tell me why you wanted to buy this house.

Because, as I'm getting towards retirement,

I've stopped doing country estates

and large houses that take a year or two years,

and I'm now doing three or four of these houses a year,

which will be a lot more fun. The men who do the work for me,

I don't employ anybody, but all the subcontractors,

are looking forward to coming in and out

of a house like this in three months.

So, sorry, country estates? What were you doing in country estates?

Buying a country estate,

a lot of country estates had derelict buildings,

-I would do them up and sell them.

-Wow! Forgive me,

but quite a few people would go from this to that,

rather than from that to this.

This is exciting because the recession has been

-a really awful time in the country house market.

-Has it?

It took me two years to sell the house I was in.

You know, which is a wonderful house.

MUSIC: Country House by Blur

John has decided to change his strategy in the property game,

having sold his portfolio and moved to cheaper, less stressful,

and less time-consuming projects.

He seems pretty adaptable to the economics of the property business.

Starting out converting barns 40 years ago,

he reckons he was one of the first to see their potential.

And the proceeds paid for his medical school tuition.

But, in the end, he decided to doctor property, rather than people.

And here we are.

So, from barns to semis, what did he see in this lot?

Very solidly built. In need of updating.

It's a two-bedroom house, huge bedrooms.

It'll finish up three bedrooms, one with an en-suite bathroom,

so it's going to be two bathrooms, three bedrooms.

There's a conservatory going off the kitchen.

I'm opening up the wall behind me.

So you come in from the front and you'd come into this living room,

you'd turn right and you'd have a wonderful view right through

the conservatory and into the garden.

I try to aim for certain standards.

Because the builder who does a lot of work for me said,

"Why don't you just tart it up and sell it and make a quick 10,000?"

It just so happens, yesterday, nearby, a chap offered me

-110,000 for this house completed.

-Wow.

-So, a substantial sum of money.

He's offered you that based on what you were planning?

Absolutely, I showed him the plans and he loved it.

So, he's now got first refusal.

I didn't say yes, because I just don't know what the final price...

I'd be delighted to take 110, or even 105. But, anyway...

It's not just to do with the profit. It's the fun of doing them.

John has got fantastic plans for this, for sure,

and I love his enthusiasm and obvious passion for property.

No matter its price.

John is planning to bring country estate specs to this house.

The new conservatory will flow into

the renovated kitchen and living room.

And he'll be adding a utility room by reducing

the size of the downstairs toilet.

Upstairs, he'll reduce the bathroom size to gain a third bedroom

and add an en-suite in another bedroom.

All that in three months.

But he's making a generous saving in the budget.

All of my local suppliers, whom I've been dealing with for years,

are going to supply all the materials at absolute cost.

Which is a wonderful thank you from them.

So, the budget will be between 23 and 25.

It'll be very well finished. So, it'll be an upmarket spec

for a medium market house.

Now, there is always a danger with that that there is going to

be a ceiling price on properties in the area.

If you build it to such high specs, you might not get your money back.

It may be the case, but I've set standards all my life.

I've been told that fact for years.

And so far, we've normally achieved the price that we set out for.

But even if I have less of a profit, that doesn't matter.

I want to finish the house to the best spec

and to the specs that I've been dealing in all my adult life.

Congratulations. Good luck with it.

-Look forward to seeing how you get on.

-Thank you very much.

Well, John is certainly a man with a plan and a pretty impressive

one it is too, totally transforming this semidetached.

How will it look? I can't wait to see.

You can find out later in the show.

Willesden Green used to be an area beloved of Aussie and Kiwi

and South African backpackers.

Now, the delis and the cafes are moving in

and attracting a much more professional clientele.

So, this is an area definitely on the up.

People moving into this area will undoubtedly appreciate

the transport links to the capital.

The nearby North Circular Road, the Tube, or even Shanks's pony.

One of the most important rules when buying property in London

is to try and buy within a short walk of the train station.

Now, the property I'm here to see definitely ticks that box,

with just a few minutes' walk from Willesden Green tube.

So, the location really is fantastic.

But what about the property?

Here it is, it's a two-bed flat

up on the second floor of this mid-terraced house.

And it went to auction with a guide price of £325,000 plus.

I'm going in.

MUSIC: Take It To The Top by Kool & The Gang

This communal area presents a bit of an obstacle course.

It's all feeling a little bit tired. A bit like me!

Oh, a couple of flights of stairs later and, well, we reach the flat.

The decor's a little bit basic.

Brown carpets, magnolia walls everywhere. A bit beigey.

But the entrance hall is light,

thanks to that big old window up there.

On this level, you've got a small bathroom through here

and then into the first of two bedrooms. Now, it's a small double.

You've got some sloping ceilings over here

and they do eat into the space a bit,

but everything is in good condition. So, so far, so good.

I actually really like this flat.

Despite the fact it has a downstairs bathroom,

but it is conveniently next-door to bedroom one

with gas central heating.

Slight minus points for the view of the neighbours at the back,

but at least, we're in a bedroom where curtains are

normally closed when it's occupied.

And renovating this room looks like it should be just a superficial job.

MUSIC: The Attic by Paul Weller

Up a few more stairs and there are a few more rooms.

So, you got the kitchen through here, a bedroom, potentially,

through here and through here, well, a bedroom or a lounge.

I actually think a lounge would work so much better.

Although, the room is very eaved.

You can tell you're right up in the loft.

Now, the other side of this wall is a kitchen.

There's a partition wall there. I'd like to see that come down.

And, you know what I'm going to say - open the space up!

Because it is quite cramped in here

and to have the flow of the kitchen

into this room, I think, would work really well.

Don't forget that you have to get

the freeholder's permission to do that,

but then you could have a bedroom, a nice kitchen

through into a great lounge

where you could have an eating area by the window.

That would really work well.

So, I mentioned the freeholder. Let's talk about that lease.

The good news is, there's 125 years left on that. So, no worries.

But does this flat offer a good opportunity?

What does the local estate agent think its pros and cons are?

Firstly, the cons.

The external parts could do with some work, the main facade.

Internally, I think it's a good flat. It has two good-sized bedrooms,

a fair sized reception. So I think it would do well.

Now, as I've said, this area

is moving away from its backpacker past.

What kind of rentals could a buyer be hoping to attract?

This is a good rental area.

Round the corner from Willesden Green Station.

For that reason, you'd have young professionals, or older professionals.

City workers wanting to live in this location, in particular.

So, what rent could a commuting professional be expecting to pay

for a refurbished flat like this?

I think you're looking in the region of £1,500-£1,600 per calendar month.

Given the guide price is £325,000,

what would it list for on the open market?

I would say that this property is worth £450,000 at a maximum,

once refurbished.

Which leaves £125,000 - full refurbishment, profit

and the usual taxes and expenses.

To achieve the figure of £450,000,

I'd say you'd need to do a pretty high-end job.

Pay attention to the colour scheme and small details,

like what doors you have, skirtings, covings if you have them as well.

Even with a high-spec kitchen and chrome-plated taps,

there must be room for some profit.

This two-bed flat needs a bit of a cosmetic refurb to get it

looking its best. A new kitchen? Yep. A new bathroom? Yep.

And, overall, redecoration will transform the place.

So, who was willing to bid for this Willesden Green property?

Let's head to auction and find out.

Second-floor flat, two bedrooms, in the same ownership for 27 years.

Start me at 300, please. Opening bid of 300.

It's all gone very quiet all of a sudden. 300,000?

I say, 300 there on my left.

Thank you. Lady's bid. 300. On the aisle.

300 here. Somebody else? 305? On the aisle?

Oh! Standing. I was looking for somebody sitting down.

Thank you very much. 305, may I say? 305. 305. And ten?

310. And 15? 15. And 20? And 20.

And 25? And 25.

And 30? No. 325 then.

330 anywhere else? First time at 325.

Second time at 325.

Lady's bid, standing in the back.

For the last time at £325,000. All done?

Sold. Well done, madam. 325.

A successful bid of £325,000, bang on the guide price,

came from Kelly at the auction with her dad David.

It's not Kelly's first time on Homes Under The Hammer.

We met way back in 2007,

when she bought a garden flat, also in Willesden.

Then she was looking for an addition to her daytime job

as an events manager in the music industry.

-So how long have you been doing this for?

-Eight months.

And is this your first property you've bought?

No, I... It's the first one in auction. I've bought and sold one,

and one is on the market, hopefully, waiting for it to sell,

and I'm doing two other ones up as well.

To have turned around five properties in just eight months,

I'd call Kelly a go-getter, and she sold the garden flat

and made a profit without doing any refurbishment.

Now, Kelly's in business with sister Julie,

and I met them at their new flat to find out their plans.

MUSIC: Hey, Soul Sister by Train

# Hey, soul sister

# Ain't that Mr Mister on the radio, stereo?

# The way you move ain't fair, you know... #

Kelly and Julie, congratulations.

Now, Kelly, you've been buying and selling

since I met you seven years ago.

We have, we've bought and sold, we've bought and kept, which is nice,

and now we're onto this one.

Now, you were quite a busy young lady,

-I remember you were in the music industry.

-I was.

Are you still doing that?

-I'm a freelance event manager for music and sport events.

-Yeah.

So, yes, I'm still in music and doing a bit of sport events as well,

freelancing, so makes sure we have time

for property...at the same time.

So, Julie, how did she rope you into this? Come on, tell me.

We just did one project together.

I worked as a set designer originally, and then

I sort of ended up doing interior design, and then, on a project,

we just decided it made sense for me to do the interior for Kelly.

We actually make a really good combination.

We've realised that we can never live together,

but we can work together, so I'm more of the project manager,

and do that side of things, and Julie comes in on the design. And we...

Yeah, we get on very well, working together. It sort of seems to...

-Because you don't live together?

-Yes.

-Yeah, exactly.

-Who's the older sister?

-I'm the older one.

-Older sister.

-Yeah.

-And who is the one that's a little bit more in control,

and will be in charge of what is going on and what's happening?

-Erm, it...

-It depends on what we're talking about.

-Yeah.

I'm good with budgets and keeping the costs down,

and that sort of thing, and Julie is more...

-She'll be more sort of strict on design and how it looks.

-Yeah.

The sisters have been working together for the last two years,

after they decided their skills and experience

made a great working partnership in property.

As they both have jobs that are freelance, and by nature,

a bit sporadic, property makes a great fit for both of them.

So what's the plan?

We're going to refurbish the whole flat, so we're going to put

a new kitchen in, new bathroom, and we're going to create...

a hole between the lounge and the kitchen, so there's a hatch.

So there's a breakfast bar there. New, you know, wooden flooring,

so just give the whole thing a bit of a lift,

and then we would like to rent it out afterwards.

So what about the kitchen? Now, you mentioned a hatch.

I was just a bit concerned that still might cut it off a little bit.

I think we wanted something just a bit different,

and that way, you get the best of both worlds, so it's, you know,

it's adjoining, you can talk to people in both rooms.

It gives that light.

The lounge will get the light from the kitchen, but at the same time,

it also creates a breakfast bar, and we think that's quite a nice touch.

Is there anything that you're going to put into this

property that will sort of, like, make it stand apart?

Yeah, I mean, it's, we always try to strike a balance

between making sure that it's going to be

to most people's taste, but at the same time,

not going for that

-generic developer's, boring sort of look.

-New, new, new.

-Magnolia, Magnolia.

-Yeah, which just feels a bit uninspired.

Exactly, so it's just striking that balance with a few little...

We're doing a banquette in the living room,

and maybe having an interesting fabric on that.

So you can sit on it and you can also use it as storage,

-I'm guessing.

-Yeah, underneath.

-Yeah, exactly.

We'll have probably lift-up seats

so that you can have storage underneath.

So just little touches like that, which make it a bit different.

We like to be a bit quirky.

That's kind of maybe our style,

but like Julie was saying, we don't like to go overboard with that,

because it's not going to help sell and rent out.

What about the bathroom?

Oh, so, the bathroom, we found lovely, old,

like, old Victorian-style tiles.

We've decided to go for brass taps and shower.

I think that'll be... It'll give it a good look.

We did find this amazing flamingo, sort of, artwork

for by the bath, but we're just working out budgets...

if it works with our budget or not. It's quite expensive.

And also, will that be to everybody's taste?

-That's what you've got to remember.

-Maybe not.

-Yeah.

Maybe you two are going to love that, but somebody else

that's buying the property or renting it might not like that.

I know. White tiles sound boring to us, but it will...

It will look lovely.

The girls have a materials budget of £18,000,

and their builder has quoted a further £17,000 for labour

and expects to finish in a month's time.

Girls, I'm really excited for you both.

Good luck with this project and I can't wait to see the magic touch.

-Thank you.

-Thank you. Thanks so much.

-Congratulations.

-Thanks.

It's been a good few years since we last saw Kelly on the show,

and she is still buying and doing up property.

This time round, though, she has sister Julie lending a helping hand,

so will those sisters be able to transform this flat

from shabby to chic in a month?

You can find out how Kelly and Julie, the sisters,

get on, later on in the programme.

Coming up, the family theme continues,

as two cousins come together as duo developers in Dudley.

He's dragged you in, hasn't he?

He's dragged you away from your normal job.

I'm loving it, to be honest.

And in Willesden Green, London,

are sisters Kelly and Julie still enjoying working together?

It's fun, working with my sister.

We're heading back now to Stoke-on-Trent, where I looked at

a brick-built, two-bedroom semi, bought at auction for £53,000

by John, who turned out to be

more at home on a different kind of estate.

Country estates? What were you doing in country estates?

Buying a country estate, which...

A lot of country estates had derelict buildings.

I would do them up and sell them.

Wow. Forgive me, but quite a few people would go from this to that,

-rather than from that to this.

-This is exciting,

because the recession has been a really awful time.

A property developer for over 40 years,

John sold most of his portfolio to move to smaller properties

like these, so what were his plans here?

It'll finish up, three bedrooms, one with an en-suite bathroom,

so there's going to be two bathrooms, three bedrooms.

There's a conservatory going off the kitchen.

I'm opening up the wall behind me, so when you come in from the front,

-you have a wonderful view right through.

-Wow.

Now, there is always a danger with that, that you're sort of...

-There is going to be a ceiling price on properties in the area.

-Yeah.

And if you build it to such high spec,

-you might not get your money back.

-It may be the case.

It's not just to do with the profit. It's the fun of doing them.

Profit or fun, three-and-a-half months later,

we're back to find out

if John's changes will help him to resell.

Let's start with the kitchen wall.

MUSIC: I Wouldn't Normally Do This Kind Of Thing by The Pet Shop Boys

A much brighter arrangement.

Now, what about those dull old kitchen units?

# Ask me why

# I'll say it's most unusual

# How can I even try to explain?

# Why today, I feel like dancing

# And singing like lovers sing

# When I wouldn't normally do this kind of thing... #

But the biggest change is this permanent conservatory.

The back door and downstairs loo area has been

rearranged into a small utility, and shorter but brighter downstairs loo.

# Wouldn't normally do

# Wouldn't normally do this kind of

# This kind of thing... #

Now, with daylight coming from both ends, the lounge is much brighter.

The once huge bathroom is now smaller,

to allow reconfiguration of the upstairs.

# Wouldn't normally do this kind of thing... #

There are now three bedrooms and all of them

have built-in wardrobe space.

Much is unrecognisable,

but the master bedroom once looked like this.

# This kind of thing... #

Now look at it!

It has the most wardrobe space, and en-suite facilities too.

So, how has John found the experience,

working on a much smaller urban house than those he's more used to?

# This kind of thing. #

This is a mini country house, with its en-suite,

and its conservatory, and its fitted kitchen

and a utility, downstairs cloakroom, landscaped gardens.

It's... It's been a joy to do.

How did John turn it from a two-bedroom to a three-bedroom?

A quarter of the bathroom was unusable

because of all the unnecessary boxing

in the days when they had massive water tanks and cylinders.

And so, by stripping that out, it made a good third bedroom.

The main bedroom was so huge that I was able to make it

still into a double bedroom but with fitted wardrobes and so it was very

easy to make it into a three-bedroomed house,

which makes a huge difference.

John has a trusted team of contractors, so what was his role?

I did all the organising of materials, I wouldn't let

anybody go off-site to go and pick things up, that was my job.

And just...and monitor it.

And, you know, I had a programme of work, and although they never

actually work properly, it meant that we've got to this stage.

Three-and-a-half months, I think is quite acceptable for

the total stripping out of the house, redesigning it in total,

taking all the plaster off and going back to bare walls.

It's been a big exercise, really, but a very enjoyable one.

Ah, yes. That raises the fun versus profit argument.

John initially budgeted £25,000 for the work,

but has his quest for high spec taken its toll on that figure?

I've actually spent 27,000, to the nearest hundred pounds,

and I... For what we've done, I think that's an amazing budget.

We called in two local property experts to find out

if it's all been worthwhile.

First up, the one who saw the property before renovation began.

I think he's made some fantastic changes to the property

since I last saw it.

My favourite part that he's added is the extension to the rear.

It opens up the property and it's very light and bright throughout.

The property has been finished above standard for the area.

It looks like it's been re-plastered,

new central heating, and decorated neutral all through.

It really will appeal to quite a few different types of people.

Will going above and beyond what is generally expected

in this area adversely affect John's position?

Let's get the rental values and see

if we can sway John away from his intention to sell.

For rental, he could ask for £525 per calendar month.

If this property was to be placed on the rental market,

I would look somewhere in the region of £495 per calendar month.

Taking the average,

that would equate to an 8% yield on John's £80,000 investment.

Tempting?

I'm going to sell this one.

Basically, after eight years of really difficult times in

the property market, I'm going to build up

my capital base for my retirement.

Fair enough, John. Let's see how much the agents feel that

your capital base could swell by.

I would value this property at £110,000.

I'd recommend an asking price

somewhere in the region of £100-£105,000.

That's about right for this area, but what amazes me,

and especially people who might be watching this in London and

the major cities -

three bedrooms, two bathrooms, fitted kitchens and so on -

they just will not believe that you can get a house of this calibre,

this quality, for that money.

But, yes, I accept that that is the value around here.

In fact, after filming,

John actually sold the property for £120,000,

adding to his capital base to the tune of £40,000,

minus the usual taxes and expenses.

And as to his future investments...

I love auctions.

You know, it's a wonderful way to buy properties, and what I'm

always looking out for is something that's derelict or semi-derelict.

That's my ideal purchase.

I get the feeling that now goes for urban properties

as well as the ones in the country.

There's no more arresting sight than the West Midlands town of Dudley

bathed in sunshine.

Dudley Castle sits over the town as a reminder of more turbulent times,

but the town is fighting a modern-day battle against economic decline,

but the good news is that a major redevelopment is planned

including a brand-new £7 million market.

The property I'm here to see is just on the outskirts of Dudley

and I'm pretty sure Lenny Henry came from round these parts.

It is on a noisy, busy main road,

and here it is. It's a two-bed, mid-terrace house

with a guide price of £58-62,000. Let's take a look.

Despite the traffic, this is quite an attractive property

with some lovely terracotta details on the front.

Nice and bright. I do like that in a hallway.

Lovely high ceilings as well, so a nice feeling of space.

First reception room is here,

which is an OK size.

It has got double glazed windows as well,

but you can still hear that traffic slightly.

Old-fashioned fireplace.

Again, ceilings are lovely.

Has got a feeling of late '80s, early '90s.

Let's have an explore.

MUSIC: Acceptable in the 80's by Calvin Harris

And, although the house is Victorian, I do mean 1980s.

The decor isn't that old.

To the back of the house, there's a second reception room.

Again, it could do with some redecoration

but I like those French doors that lead out to the back yard.

Through into the kitchen, which is an OK size.

It's in reasonable condition as well, so decent in here.

Through into a wet room, which is quite typical,

to have a downstairs bathroom, as such, in this era of house.

Now, you could actually put a bath in here and a separate shower

but not everybody likes a downstairs bathroom.

Let's see what we can find upstairs.

Upstairs, there are two good-sized bedrooms,

one to the front of the house with two windows letting in lots of light,

and one in the middle.

But, right at the back, there's something of a surprise.

So, down this very long corridor

and you find another bathroom upstairs, which I'm pleased to say,

but it gives you two bathrooms for a two-bedroom house.

Decisions to be made.

Do you change it into a bedroom? Have the bathroom downstairs? Not for me.

I always like to have my bathroom upstairs, next to the bedrooms.

MUSIC: Should I Stay Or Should I Go by The Clash

If you think purely in business terms,

then converting the upstairs bathroom into a third bedroom

makes a lot of sense.

Higher rental and higher sales,

but, if you are buying this for your home,

would you be tempted to keep it upstairs?

Should it stay or should it go?

Let's get some facts and figures from a local property expert

and see what he thinks is the best option.

Swings and roundabouts.

What you lose with one hand, you gain on the other.

Overall, my preference would be to have the third bedroom upstairs

as opposed to a bathroom upstairs.

You'll have more people interested in having three bedrooms than two.

And is there any other refurbishment work he'd recommend?

I'd be looking to replace all the window units to the rear

to double-glazed units.

Possibly replace the front door

and, obviously, a general refurbishment

in terms of painting and carpets.

So what difference would having that third bedroom

make in terms of rental income?

As a two-bed, I'd look to market this property

at around £475-495 per calendar month.

As a three-bed, It would be slightly higher at £525 per calendar month.

And the sales values?

Sales, as a two-bed,

I'd probably be looking to put this on the market around £85,000.

As a three-bed, again, slightly higher at £95,000.

This is a pretty traditional two-bed terrace.

It does need a bit of work doing to it but you do get a lot of space.

If you get it for anywhere near the guide price,

you've got yourself a bit of a steal.

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

Two-bedroom, mid-terrace freehold house.

Start me, if you will.

70,000 anywhere?

This lot came up at the end of a busy day and fatigue had obviously set in

as nobody in the room was willing to raise their hand.

£60,000.

The auctioneer dropped the opening price by £20,000,

and we rejoin with the asking price at 50 grand.

At 50,000 anywhere?

Start me if you will. What a buy this will be, sir. Thank you.

At 50,000 I'm bid. Is it 60 now?

At 50,000. Is it 60? 60, sir?

55, thank you. At 55.

At 55, I'm bid.

At 55,000 then, are we all done?

Sir, do you want one? Do you want 56?

56. Thank you, sir.

57. 58, sir?

At 58. Thank you, sir. At 58. At 58. And 59?

It's still a fantastic buy at 59, sir.

Are you sure?

59. 59.

60, sir? No?

At £59,000 on my left.

At £59,000 for the first time.

£59,000 for the second time.

Third and last time.

That's yours, sir. You came in with the one bid which was enough.

That final bid of £59,000 was made by local property developer Jawad.

I met Jawad back at the property along with his cousin Zahid,

who runs a construction company, to hear what their plans were.

-Zahid, nice to meet you.

-Likewise.

Jawad, nice to meet you. Congratulations.

-Thank you.

-Let's start at the auction.

How was it? What was it like?

I wasn't expecting to start the bid at this price.

I was just relaxed and sit back,

until he just stopped at 59. I just waved my hand and that's it.

And did you get it at the price you wanted it? Were you happy?

Yes, I'm very pleased with it, to be honest,

because I got it, I think, 6K cheaper

than what our budget price was, so...

Do you take different roles?

Does Jawad take one role and you take another role or do you mix it up?

Well, Jawad does all the searching, running round,

looking for the properties. I go down and view them

and then I leave him to it.

So, you do all the work, really, Jawad. That's what I'm getting.

Initially! Initially, but, then, once... If we do get the property,

then I'll do all the building works, organise all the labour,

plant, materials, whatever's required.

Zahid, tell me a bit about yourself before you got, you know,

right into the property world.

Well, I'm a civil engineer by profession.

I left the construction industry about four years ago

to set up my own construction company.

Been doing properties and renovating them

for the last five, six, probably a bit longer.

-Tell us why you got into property, Jawad.

-Yeah, I was working in a bank,

to be honest, as a full-time employee

and Zahid was in this trade, anyway, before for me,

so, I mean, after having a chat with him

and due to my family circumstances, as well,

I wanted a job which is more flexible,

where I can manage my own time,

so property development was one of the choices

and, so far, I'm really pleased with it.

He's dragged you in, hasn't he?

-Dragged you away from your normal job.

-Yes.

-Are you enjoying it?

I'm loving it, to be honest. It's brilliant.

Yes, it is different, it's exciting,

especially when you get what you want under the price

and you meet your targets.

It's brilliant.

On paper, this looks like an ideal partnership.

Plenty of enthusiasm from Jawad

backed up with years of construction experience from Zahid,

but, in property, as with football,

the game ain't won on paper.

And both will have to play to their strengths

to get this ready for rental.

-Tell us what you're going to do with it.

-Right, we want to convert it

into a three-bed, so we want to get rid of the bathroom upstairs.

Basically, just have a look at the central heating, the gas boiler,

the electrics. A few minor little things.

A couple of windows need changing and I think that's about it.

I think nothing major.

And, downstairs, the bathroom, wet room downstairs,

are you going to change it or...

At the moment, there's no plans.

-It's well built. It's very clean. So we're going to...

-Ready to go?

-Ready to go, at the moment.

-And tell us what that budget is.

What budget have you put aside to turn it round?

Well, initially, it was £10,000,

but I think we're going to... Looking at it now,

I don't think we're going to use half of that,

-so probably about 5,000.

-He's saved you a few quid, as well.

-He has.

He has saved me a few quid, yeah. So it's working.

So he's doing his job, so good.

How long is your timescale to get it all finished?

Right, timescale is a bit difficult to put together

-because we've got about three, four jobs running at the moment.

-Ah, OK.

So depends on how much priority we give to this house.

So I think we will prioritise this one

because this hasn't got much work to do

and I think we can do it within four weeks.

-Amazing if you could get it finished that quick.

-Yeah.

I think you can be done even quicker than that.

See, that's the builder in you talking now, isn't it?

-Absolutely. Yeah.

-Good balance. You've got a good balance.

You've got what you do and Jawad leaves you to do that

and, Zahid, you leave him to do the finances, going to the auctions.

-Are you going to allow him to come with you next time?

-Well, I doubt it.

Well, if he keeps getting properties like this at this price,

-I don't need to go, do I? I'll just...

-Leave him on his own!

-Leave him on his own, yeah.

-Zahid, nice to meet you and good luck.

-Thank you very much.

-Jawad, keep going to those auctions on your own.

-Thank you.

-Save yourself six grand every time. You'll be minted.

-We will be.

-Good luck to you.

-Thanks.

So it's very much a family affair.

Jawad has his role to play

and Zahid will look after all the building work.

There's not a lot to be done in this property and I'm pretty sure,

with all the bases covered, they'll be fine.

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

We've seen what's happened to one property,

but how did the others get on?

Will there be big major changes or a few minor improvements?

Let's go back and find out.

It's back to Willesden Green, in London now,

where I met sisters Julie, on the left, and Kelly, on the right.

They had purchased this two-bed flat

bang on the auction guide price of £325,000.

-And then it's got lights for this ceiling, as well.

-Oh, great.

The sisters were hatching plans for a new look in the lounge.

A hole between the lounge and the kitchen so there's a hatch.

There's a breakfast bar there.

If the budget would stretch to it,

they were hoping for some long-legged avian action

in the bathroom.

We did find this amazing flamingo sort of artwork for by the bath.

Is the flat ready to rent out two months later? Let's find out.

I am delighted the girls jettisoned the hatch idea.

The removal of the dividing wall has been the metamorphosis

of this now kitchen/living/dining space.

The antique wood flooring is from a reclamation yard

and it contrasts well with the white walls.

The girls' penchant for mashing up old with new

makes for a unique stand-out style.

Which is why I like the idea of her little banquette.

That's an upholstered fixed bench to you and me.

However, in its place, is this sofa

that suits the space very well indeed.

The upstairs bedroom used to be a masterclass in magnolia.

Now, the fixtures of monochromatic shades form the perfect backdrop

to these splashes of colour,

a touch to impress potential renters.

The classy black-and-white theme continues on the stairwells,

where paintwork emphasises the sharp lines.

In the bathroom, I like the lack of flamingo adornments

and the girls' signature style might not be to everyone's taste,

but you can hardly call it bland.

Julie's designer touch also cured

the waste of space in the second bedroom.

The girls only started working together two years ago

when they realised they had complimentary skills

and because Kelly didn't like working on her own.

Well, the girls are here today to let us in on the siblings secrets

of how they did it.

We were quite strict with ourselves.

We made a lot of decisions at the beginning

and we had the sort of mood boards and the images.

Keeping it simple but really paying attention to the detail,

really thinking about switches and sockets

and then adding a few small touches

like the tiles on the bathroom floor.

I really love... My favourite feature in there is the wall lights

on either side of the mirror.

I think they just make the whole bathroom

look so elegant and stylish.

We spent exactly bang on what we thought we were going to spend

for the builders and we've come in at approximately six grand under

for all the purchases and all the stuff inside the flat,

so we've come in under budget which we're really happy about.

But there was one feature I was never quite sure would work.

We experimented with the hatch for a day

and we came in and it just looked awful. It didn't work at all.

There wasn't enough space between the door and the hatch itself

so you wouldn't be able to sit there like the breakfast bar we wanted.

Called the builder straightaway and said, "We're going to have to just

"take the whole wall down."

They had spent a day creating the hatch,

so they weren't that happy and we had to pay a bit extra for that.

Obviously, it was about half a day's work,

but it was a really good decision on our part, so they got over it.

And they finished the work in six weeks,

within their intended timescale, so has it all been worth it?

I'm really happy with the way the flat's turned out.

It's definitely... We had a vision

and I feel like we have achieved that.

It's really light, it's just clean and looks stylish

and it's just a really liveable flat.

I would happily live here.

But the point of the exercise is to get someone else to live here

and pay good money for the privilege,

so we called in two local estate agents

to see how Kelly and Julie's flat compares with its rivals,

and one of the agents saw the flat before the work started.

They've done really well with the fixtures and fittings

and they've mixed it all is to bring together a unique property.

The decoration throughout the whole property is to a very good standard

and I love the exposed floorboards.

The sisters don't want to sell just yet

but let's find out if the listing valuation is good news.

The girls have spent £36,000 in refurbishment and fees.

Added to the purchase price, well, that means anything above 361,000

is a potential profit, minus taxes and expenses.

I'd market this property for £475,000

and I think that we could actually achieve that, also.

I feel this property would sell for somewhere in the region

of £450,000-475,000.

- 475 is what we had really hoped for.

450 we thought we could achieve,

but the 475 figure would be the desirable value so that's brilliant.

If Julie and Kelly were to achieve that desired top figure,

it would mean a profit of 121,000

before deductions for legal fees, stamp duty and other expenses.

Not bad for a six-week job, girls.

OK, how about those rental values, now?

I feel this property would rent for around £1,650 per calendar month.

I would say that this flat would rent for £1,700 per calendar month.

That would give the girls a yield on their investment of just over 5.5%.

Yeah, that's great. That's what we were hoping for.

We'd spoken to some agents in the area

and that was kind of what our aim was, so I'm really happy with that.

So do they still enjoy working together or is it sisterly strife?

I think me and Julie make a great team.

Julie's got her skills, which she's great at, and I've got my skills

and they just seem to work really well, really good balance.

We're both bringing two different things to the table, so...

And it's fun working with my sister.

We're back in the West Midlands where, earlier, I paid a visit

to this two-bed terraced house in Dudley.

What was on offer for the guide price of £58-62,000?

Well, the house needed modernising but, with two reception rooms,

two bedrooms and two bathrooms, there was plenty of space available

to turn it into a great family home.

It was bought by Jawad for £59,000

and it's not very often that properties sell

under the guide price on this show.

Jawad's cousin Zahid ran a construction company

and he was going to give him a hand with the renovation plans.

Yes, I'm very pleased with everything, to be honest,

because I got it, I think 6K cheaper

than what our budget price was, so...

Planning to refurbish and then rent out the house,

they were clear that only one bathroom would survive.

We want to convert it into a three-bed

so we want to get rid of the bathroom upstairs.

And, with his expert eye, Zahid thought he might be able

to save even more than that six grand they saved at auction.

What budget have you put aside to turn it round?

Well, initially, it was £10,000,

but I think we're going to...

Looking at it now, I don't think we're going to use half of that.

I do admire your confidence, Zahid.

I just hope it isn't misplaced.

Five months later,

we return to see if that tiny budget has been stretched or snapped.

This is looking like a tidy job, chaps.

A back reception room wall has been removed

creating a spacious kitchen/diner.

The front room has been skimmed and decorated ready for furniture.

The wet room, which was in pretty good order before, remains unchanged.

Upstairs, the plan was to convert the bathroom to an extra bedroom.

Our original plan was to convert the bathroom

but then we decided to split the front bedroom into two.

Then there was also an idea of,

why not convert it into a four-bedroom house?

But, finally, decided no,

we need a bathroom upstairs and that's what we stayed with.

So, three bedrooms and an upstairs bathroom on a budget of £5,000.

Come on, guys. Did you manage it?

Well, originally, when I bought this property,

my budget was about £15,000

but, on the day, when we came into the property with Zahid,

we saw it briefly, we thought we can get away with 10,000.

Well, Zahid even said 5,000.

-Well, I wish that was the case.

-But that was a different spec.

So far, we have spent about 12,000.

I think that there's another 500 to go to finish off the jobs

but we are still within our budget so I'm quite pleased with that.

The higher spec has pushed up their budget,

but as well as finding extra cash, they've also had to find extra space.

Because our scope changed,

that we want to convert the front master bedroom into two bedrooms,

we needed extra space and the only way we could gain that

was to take the chimney out,

so that meant taking the upstairs and downstairs chimney out

at the front. Then, we decided to open up the kitchen

into a kitchen-diner.

That meant taking the other chimney breast out.

So, in total, we took out four chimney breasts.

Four chimney breasts equal a lot of bricks and mortar.

Did all this extra work impact on their timescale?

Our timescale for this project was four to five weeks.

It's taken us approximately four weeks so far

to get it up to this level.

We've got a couple more days left to finish off

and the only other problem we had was the start date,

which was delayed because of other ongoing projects

which were more of a priority at that stage.

We had to get them finished before starting this one.

Jawad and Zahid really added value to this house.

The question is - how much value?

We asked along two local estate agents to give us their opinions.

I think the buyers have done a great job

in the changes they've made to the property.

Changing the upstairs to have three bedrooms instead of two

is a huge bonus and the open-plan kitchen/diner is a massive bonus

in a property such as this.

It's been done to a reasonable standard throughout.

Particularly like the kitchen and the bathroom.

There's certain bits that I would recommend that he would do

a bit more to, but as it stands, it's very good.

I think that this property would be extremely popular

on the rental market.

So a quality rental property in a good location

should deliver a decent return for Jawad and Zahid,

who have spent a total of 71.5 grand

on this purchase and renovation.

What values do the estate agents put on this house?

On the rental market, I would expect this property

to achieve £550-575 per calendar month

and, on the sales, £95-100,000.

On the rental market, I'd expect to achieve a price

of £550 per calendar month.

On the sales market, I would look to achieve a price of £85,000-90,000.

A sale at £100,000 would net the boys a tidy profit of 28.5 grand,

minus taxes and fees.

But they are more interested in the rental income,

which, at £550 per calendar month,

would represent a return on investment of 9%.

I was just thinking 450 for two bedrooms

but adding a third bedroom, I think that we have done well.

At 550, I'm quite happy with it.

Brilliant.

And it seems clear that dismantling four chimney breasts

hasn't dampened Jawad's enthusiasm for property development.

I would love to do this again and again, to be honest.

I'm really loving it. It's absolutely amazing.

Definitely going to look for another property, similar sort.

I've got a next auction to go to

where I've got a few properties lined up

and I'm just going to see if I'm lucky enough

to get another bargain like this.

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

We'll have more action from the auction rooms for you next time.

Yep, we look forward to seeing you then

-for more Homes Under The Hammer.

-We'll see you all soon. ALL:

-Goodbye.