Episode 36 Homes Under the Hammer

Hello and welcome to the show. If you're thinking about investing

in property, then buying at the right time is a really good way

-to get off to a flying start.

-It is, but how do you keep up to date with all

the changes like price and demand?

Lucy, why don't we head to the auction house

and see what's happening there?

If you want to bag yourself a property bargain, then buying

under the hammer may get you more bricks and mortar for your money.

Be prepared to roll your sleeves up because whatever you buy,

it'll probably need some work.

So who was ready to get their hands dirty on today's programme?

On today's show, in Porth, South Wales, this house is a

forgotten gem, while the back garden has just been plain forgotten.

That's not going to happen, is it?

In Totton,

there's an unfinished three-bed semi with access problems of its own.

I'm going to have to go round the back.

And in East Ham, this flat has a low guide price,

but high living with its balcony access.

And somewhere to look out at the view, that is a bonus for me.

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.

-BANGS GAVEL

-Well done.

If you work in Cardiff, but are looking for a quiet

semi-rural lifestyle, the town of Porth might be ideal.

With good rail links to the Welsh capital, it's popular with

commuters, but also popular with astronomers,

as a crater on Mars was named after the town in 1976.

But back on Earth, I'm here to see today's starring property.

# Now why do you wanna go and put stars in their eyes? #

Well, I don't know how many rows of terraced houses I've seen in the

valleys of Wales over the years,

but this one has something special about it. Look at it.

All the houses have got individual names

and they're all slightly different colours. It makes it really attractive.

And it was one of these that was up for auction, in fact the one on the end.

£42,000 was the guide price. Looks all right, doesn't it?

In fact, it looks great. Let's have a look.

Look left and right, not just for traffic

but to take in this lovely terrace again.

Remember, the setting around the property itself can really add value.

So, straight inside and straight away you get that feeling

that in its day, this would have been a really prestigious house.

A good feel to it. And things like the banister here, look at that.

Amazing bit of carving.

And I bet... Oh, yeah. Look at the steps there.

Fantastic, that hasn't been painted over the years.

Have that stripped back, how beautiful would that be?

So, then, through into your main sort of living area here.

Originally, this might have been two rooms and at the moment it's

one and I think it works really well like that.

Dominated by this huge great bay window and that box seat there.

Absolutely gorgeous. Get that renovated.

Shutters on the windows perhaps, do you think?

That would really fit in well.

A few things are missing. It's missing a fire surround on there.

That is obviously going to be a focal point of the room, so your

choice would be endless, in terms of what you put on there,

but something that would definitely fit the grandeur of the house.

Something else that's missing, unfortunately... Radiators?

Looks like they've been taken out, so central heating is

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

But overall, what a great start. I've only seen one room.

So, what else is there? A little corridor there.

Useful storage area under the stairs.

And then, joy of joys, into the kitchen.

Door out to some kind of outdoor area there.

The kitchen area though is really great news. A good size.

It's a kitchen living area. Loads of space for a kitchen table here.

So it will definitely be a family room.

Obviously, it needs a bit of work. Needs some new units.

But it's a good size, which is good. And then a bit of a bonus.

A sort of utility area out the back and yet another bonus,

a downstairs loo.

I don't need to see upstairs. I'm already sold!

I love this house! There's plenty of space, lots of character and charm.

And after renovation, the property could be as it was in its heyday.

Well, of course, I couldn't resist having a look upstairs really

and I'm delighted I did cos it continues to impress.

A corridor down to a bedroom at the end.

Looks like there's some damp there.

That needs to be sorted out, but it seems to be a reasonable size.

Really huge bathroom in the middle there.

Needs refurbishment, but loads of space, which is wonderful.

Second bedroom here, not massive, but it's OK.

I saved the best bit till last. How about this

for a master bedroom? Love the floorboards, love the size.

It's fantastic.

I mean, I suppose with a bit of internal playing around,

you could maybe put a door in there,

possibly a sub-partition here to create a fourth bedroom.

I guess it depends on your personal circumstances.

I would love to keep it like this.

It's such a fantastic feature to have in the property and, yeah,

looks like somebody's had a dartboard at some time in the past.

Shame they weren't a better shot, but I tell you what, when it comes

to picking properties, if you picked this one, you got the bull's-eye.

# Hit me with your best shot

# Why don't you hit me with your best shot? #

Yes, an absolute nine dart house, this one, with an option to

add a fourth bedroom if you split this master bedroom.

But what about the garden and outside area?

Walk down the side of the property, down this little lane,

and you get a real impression of how big it is.

Look at that. Amazing.

What you also get to see is that there's actually a basement.

It's through here. Now, you could contemplate accessing that from inside the house,

almost adding an entire floor, which would be kind of interesting.

I was hoping to explore a little bit more, but that's not going to happen, is it?

Can't even get through there. I can see through that gap though, there is

some kind of a little garden, which is a nice additional thing to have.

Just needs a couple of hours' work to sort that one out.

# Did you know your garden's overgrown? #

Well, a few hours with an industrial-sized lawnmower, that is. But then, you get to the basement,

more space for a house that already has everything.

Does a local estate agent love this house as much as I do?

What are his thoughts on the property?

I think if you come to this house first, your thoughts might be -

there's a lot of work to do here. But it's just the basics.

I would probably put kitchen, bathrooms in, new flooring,

a lot of the walls need redoing.

There's a bit of damp in places, so I'd check if it had a DPC course.

And apart from that, I think double glazing would help and it'd be a nice family home.

And what would this house, guided at £42,000, be worth for resale?

Once the work is completed, I would put this on the market for £100,000.

Sounds like there's room here for a decent profit,

if you were selling it on.

As an alternative, what about the rental?

On this street, a three-bedroom property with a large

bathroom upstairs would achieve £500 per calendar month.

Well, this is one of those houses that you get the impression,

it's just so worth putting energy in to sort it out, isn't it?

It was a lovely property back in its day and it's just crying

out for somebody to turn it back into that magical place. A lot of house for the money too.

Close to the train station, what more could you want?

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

An end-of-terrace house, guided at £42,000. Will you start me...?

Start me somewhere near £40,000. Can we see? 35, then, if you like.

Wave a hand at 35. Thank you. 35, I've got you there.

At 35. Now 36, can I see?

I've got 35. 36. 37.

37, back to you.

37. 38. 38. 39.

39. 40. 40. 41.

41. 42. 43. 44.

45. 44 I've got on the right here.

45, thank you. 45. 46.

46? 46. 47. It's £46,000 then for the first time.

At 47, new bidder. Thank you. 47. 48. Back to you.

48, no. Half if you like.

No. At £47,000, right at the back.

47,500, thank you. 48. 48. And a half.

48,500.

Otherwise it's £48,000. Right at the back then.

For the first time, 48,500. 49.

49. And a half.

No? At £49,000 then for the first time.

Second time.

Third and last time, at £49,000.

-BANGS HAMMER

-Your number, please?

Jay and Kevin were hidden away at the back

when they clinched the deal for £49,000.

Jay, in the light green jacket, is a fireman,

and his friend Kevin is a full-time developer and they met me

back at their purchase to tell me more about their plans for this grand old dame of a house.

-Jay, Kevin, great to meet you both.

-You all right?

-Congratulations.

I think you've done really well here. I like this house a lot.

-Why did you want to buy it?

-We just wanted to renovate a property.

We thought the best way to do it is to go in to auction.

-So that's what we did.

-It seemed a bargain as well.

-We know the area.

-For sure. Is it something you've done before?

I've done a few. Jay wanted to get involved and wanted to do one,

so we thought we'd do a joint venture.

So, how do you two know each other?

-Our sons are in school together.

-Oh, right.

-So, basically, on the school run.

-Really? So, met at the school gates sort of thing.

-Yeah.

-Really?

-Yeah.

-And how did you broach

the subject of sort of going into a property development together?

Well, I do a bit of plastering on my days off,

so I've done a bit for Kev and that's how we sort of came up

-with the idea of going together really.

-How did you learn how to plaster?

Just paid for a course and then just did bits and bobs for family

-and friends.

-Are you good?

-Yeah, I'm very good.

LAUGHTER

-And the ceilings?

-Yeah, ceilings as well.

-Really?

-A big set of stilts.

-Really?

-Yeah.

-I'll be mixing for you, won't I?

-Kev'll be mixing.

-Wow.

It's a skill though, isn't it?

Yeah, it took me a good year to master it and just doing bits and bobs round the house.

# School's out for summer. #

Well, this is one school run that could end up being profitable,

so what made them choose this house?

It's got a lot of character, outside and in.

-And it's everything we can do together really.

-Yeah, for sure.

-It's a nice-looking house as well.

-It is.

In its day, it would have been a very grand house, wouldn't it?

-Mm.

-It's got a really nice feel to it.

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

New kitchen, new bathroom, new electrics, skim every wall,

new boiler, new heating.

-Just gutting.

-Start again. Everything.

So, what about the sort of basement area underneath the house?

Until we get rid of the shrubbery and bushes,

we don't really know what's under there.

We've had a peek in there and it looks pretty sound.

So hopefully, that'll just be a little storage room then.

-Yeah.

-All good. So, what's the budget for the work?

-21,000?

-21.

That's precise.

-We've been busy!

-LAUGHTER

-We've done a couple before as well so...

-OK.

We know the general cost of it.

And the reason for the precision is Kevin used to work in finance,

so these two have an ideal skill set and some handy mates in the trade.

They plan to add real value to this property by giving it a high-spec

finish over a three-month timescale and then rent it out.

Any nervousness about working together, or do you think it's all going to go swimmingly?

No, it's gone swimmingly so far, for about a week or so!

It's gone swimmingly so far.

-Hopefully, we'll be friends in three months' time as well.

-Yeah.

What do your respective partners think of all this?

-They're happy, like.

-They seem supportive.

-And your children?

Are they quite excited that their dads are working together?

-They get to spend more time together.

-Yeah.

Fantastic. Well, listen, congratulations.

-Thank you very much.

-Good luck with it.

-Brilliant.

-Look forward to seeing how you get on.

-Thank you very much.

Well, Jay and Kevin wanted a house they could add value to and do lots of work to.

Well, they've certainly got it with this place and a fine choice it was too.

It will be beautiful, I'm sure, when they finish.

Have they got the expertise to take it on?

Well, it's still early on in their careers, but I'm sure the plasterwork's going to be good.

You can find out how it all turns out later in the show.

The town of Totton in Hampshire has good rail links to nearby

Southampton, or London's Waterloo.

There's also great road links to the New Forest

and the surrounding areas,

but that isn't always a good thing for the residents and that's

certainly true at my property, a couple of miles from the town centre.

MUSIC: (I'm A) Road Runner by Junior Walker

First thing you notice is this road here is incredibly well used

and a noisy road behind the property as well.

But what I'm here to see is a three-bed semidetached with a guide

price of £150,000 plus.

Now, the first thing I've noticed walking up to the property is

this huge gap.

Kind of worrying signs before I even get inside, but let's take a look.

I'm going to have to go round the back.

As you walk towards the back of the property,

that noise of traffic does get louder.

There is an unfinished soil stack there as well.

And as I walk through here, I can see again there's unfinished guttering

that should go to the top and across, just doesn't seem to be there.

Worrying signs so far. Let's have a look inside.

And a door that opens!

# One door closes, another door opens wide

# It's hard to believe all of these locked doors I've tried. #

This looks a little bit better.

Then the outside, nice flooring, nice, big kitchen. A good start.

In through to the lounge, which, again, is another big space.

It might look bad, but sometimes it can be a blessing in disguise.

When it's been stripped back for you, you can

actually see things you wouldn't be able to see beforehand.

There's a bit of leakage up there, and I wouldn't have

seen that if it hadn't been stripped back for me.

On the positive side, there's a lovely fireplace there,

and this could be a nice living/ lounge area.

And you might think it is a good thing that someone has started

to build a rear extension,

but don't be fooled, because it might mean all sorts of unknowns crop up.

For example, is the extension sound?

And upstairs, on the first-floor landing,

there's a staircase intended, I think, to be a fourth bedroom.

But with the eaves as low as they are,

I've got no chance of standing up in there.

I doubt it would pass building regulations,

and judging by the state of the en-suite facilities,

the house appears to be in a slightly half-finished state.

Unpicking all this might prove more costly than if it had never

been started.

# Yes, it's true

# What they say

# It's better the devil you know. #

Coming across the landing here, small bedroom there.

Into the family bathroom just here...

which is...which is quite small.

Um. I'm over here.

I know you weren't expecting that, there's a hole in the bathroom wall.

Not the most private facilities then.

Leaving the excessively ventilated bathroom behind,

and into the rear extension. The third bedroom has skylights installed.

But to what standard? And what's behind the new plaster?

Pipework? Cables?

Have they been installed correctly?

The leak up here is different to the one I spotted downstairs.

# Come on, baby, finish what you started

# I'm incomplete... #

It suggests not all is right with this house.

But what is right is the name of the estate agent who has

come along to look at the semi-finished semi. Chloe House,

welcome to this house. Sorry, just couldn't resist that.

Once renovated, I think

the selling feature of the property would be the downstairs space.

You've got a good amount of space down there,

and it overlooks a garden.

The fourth bedroom would normally add value,

but here I think a lot of work would be needed to make

it into a livable space that would pass building regulations.

Does the agent agree?

With the loft room, I would keep it as a storage space

due to the actual lack of head height.

I would keep it more to a storage space or playroom.

So bearing in mind that £150,000 plus guide price, and forgetting

the attic room, what's the property worth in its current configuration?

As a three-bed, and once renovated,

the property could resell between £220,000 and £230,000.

So this property is not without its issues.

And upstairs in the bathroom. But if you were to put those right,

there could be a tidy profit to be made.

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

This is a large, three-bedroom semidetached house,

does require upgrading and improvement.

Start the bidding for me, opening bid of 145.

145, here in the front.

145 I've got. 147, at 147 on the left.

Two bids, here in the room.

149. 151. Thank you.

155.

Six.

Do the six. 156, he wants the one. And 59.

159. 160.

No, shake of the head. It is 160 here. Half.

Do the half. 161. 161.5.

162. 162. Shake of the head.

£162,000, then, I have for the first time...

162,000 for the second, the 500 is still on offer.

£162,000 here, front row, going third, final time.

Well done, 162, 5057.

The successful bid of £162,000 came from John, who

works in IT, and his wife, Stephanie, who used to be a book-keeper.

They've been developing property for the last two years

and intend to renovate and sell this property on.

I met up with them to find out more.

John, Stephanie, nice to meet you.

-Congratulations.

-Thank you.

-Firstly, tell me about the auction experience.

-How was it for you?

-We both went. We go quite often.

Steph does a lot of the research behind it.

Steph, what kind of research do you have to do

when you're looking for this kind of property?

Well, I am looking for area. We like

to stick to fairly local areas.

Obviously price, condition of the property, and we usually buy

to sell on, so obviously what sort of profit we can make on it.

How does this fall within what you've had already?

Does this fall as one of the hardest ones to renovate, or is it

-an easy one?

-Um... It is probably up there as the most difficult.

-That you've had so far?

-Yes.

-It's not frightening you at all?

No, not really. There is nothing that difficult on it.

I mean, the structure is sound, maybe a rebuilding of the bay,

if it needs it, but that's nothing to worry about.

So, John is all over that front window issue.

He thinks there's been movement caused by drains underneath.

But it is just one more thing to add to their to-do list,

along with the lows to undo. It is not an easy renovation.

However, it appears that John is very cool, calm and collected,

and that's because he's got a team.

We tend to use tradesmen that we've used before.

Obviously just depends on availability,

sometimes you have to pick up a new person.

So, yes, hopefully we will have the regulars in that we use.

OK, and what about the loft space area?

It will be sad to sort of undo the work,

but it will probably be a necessity to do it.

But at least we can then revamp the landing and open that area up,

so we are losing one place but we should gain another.

And the kitchen area, it is a nice, big kitchen you've got. What are your plans for that?

-Are you going to have it as a kitchen-diner, just a kitchen on its own?

-It will be a kitchen-diner.

We plan to separate out the back area

and that will turn into a lobby, so there will be a separate

entrance through the back door and then into the kitchen.

There's a fair bit of work to do on the outside of the kitchen

extension, too.

And the nearer you get to that noisy road at the back, the more

intrusive it becomes. Triple glazing and soundproofing is costly.

You've set yourself a high budget, low budget?

Um, er, we hope a realistic one.

It is not our first property, we have done a few.

And when we go to the auction, we already know roughly what we've got

to spend because we've had a quick look and we do some figures.

That sets the price that we are going to pay.

So we've got around...a figure of around 25,000, maybe up to 30.

So, we like to be a bit generous because we do like to do quite good improvements.

We are particularly interested in putting in energy-efficiency measures.

Really good windows, cavity wall, loft insulation, new heating.

-Bring it up to good spec.

-Wow.

-So, yes,

-I'm sort of quite into the eco bit.

-Good.

I really like that. Not just for the green aspect,

but because it can really make a tenant more comfortable

if the house is well insulated and if it is cheaper to run.

Anyone renting would be glad of that,

and of course buyers equally like cheap living costs.

However, those kind of extras can add money

and of course time to your renovation plan.

Timescales, John, on how long this is going to take.

I always underestimate, so I will say something like four months.

But it is probably going to be between four and six months.

Who's got the power?

THEY LAUGH

-Yes.

-I do, don't I?

-Um...

-Yes, dear.

-It is split between us.

We agree a schedule and when we are going to do it,

and then I get nagged until I get it done.

I tend to moan at him when it runs over.

I mean, there's always little snags that come up.

But, yeah, by and large, we tend to work it together,

so if there's building and stuff,

that generally falls to me, or for me to get people in to do it.

And then obviously when there's all the cleaning up and stuff to do...

-That falls to me.

-That falls to you.

So tell me how you started in the property world.

-It was actually Steph.

-It was your fault, then?

I was made redundant at the end of 2012

and we had some money which we were thinking about investing,

so I thought, "Well, let's give the property market a try."

-Give him a prod.

-So, um...

You know, we are trying to sort of invest so that we can

help our children, so that they can get on the property ladder.

And they get involved in the work as well.

That's a common story nowadays,

helping the kids onto the property ladder.

But John works in his IT job while dealing with property as well.

This is the sixth property they've done up, but they've held on to two.

So is there an end goal in mind?

We've got some long-term plans. As we've mentioned, we'd like to help the kids out,

get started on properties. And Steph, in particular, would love...

To have a little place in the south of France.

We'd like to find something that we could renovate.

A nice derelict ruin. And...

-Not too derelict.

-Not too derelict.

-THEY LAUGH

As you can see, our ambitions are slowly going upwards.

And then we will... From what we learn here,

-we will get a team in to renovate that while we sun ourselves on the beach.

-That will be amazing.

Somewhere we can have a swim.

Just somewhere nice to relax, and then no doubt we will have lots of visitors.

I could be one of those visitors, John, actually.

-Judging by the sounds of it.

-Homes Under The Hammer Abroad.

Yes, that would be nice. With all the team. John and Stephanie, good luck.

-Hope everything works out for you.

-Thank you.

-Thank you.

So John and Stephanie both have their individual roles to play

when it comes to business.

But this could be their most challenging project to date.

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

Coming up in East Ham, two friends who seem a little unsure.

-Two weeks?

-Is that unrealistic?

-I like the way you keep asking me.

And in Totton, is Stephanie still sure she's enjoying working

with her husband, John?

He's quite, um, demanding at times.

Earlier in the show, I was in Porth, South Wales,

where I met Kevin, on the left, and his friend Jay.

They had paid £49,000 at auction for this three-bed end terrace,

and if you look beyond the damp and damage of disuse, there was

a house of huge charm and character.

And these two friends felt it would make an ideal first project together.

-So how do you two know each other?

-Our sons are in school together.

-Oh!

-We met on the school run.

-Really?

-So you met at the school gates?

-Yeah.

-Really?

I do a bit of plastering on my days off,

so I've done a bid for Kev and that's how we sort of came up

-with the idea of going together, really.

-How did you learn to plaster?

Just paid for a course and then did bits and bobs for family and friends.

-Are you good?

-Yes, I'm very good.

THEY LAUGH

Ha! Mr Modesty Jay and Kevin would be calling on additional help from

mates in the trade to achieve a high-spec finish

on a £21,000 budget.

But four months on, how have they got on?

# There's no place I'd rather be

# N-n-n-no, no, no place I'd rather be

# N-n-n-no, no, no place I'd rather be. #

I am really liking this. No bland magnolia here.

They have added characterful colour to this lovely old house,

and for a first project, this was a good 'un. Over to you, Jay and Kevin.

-So we started, first thing we did was...

-Totally gut the house.

-..ripped everything out. There were a few skip runs, wasn't there?

-Yes.

-After that, I think the plumber started.

-Electrician.

And then there was the case of plastering.

-Any ceilings and bits we had to pull down.

-Rip them down.

-Obviously damp patches.

We went right back to the brickwork. So then a full rewire.

-Tiling, flooring. And then finally painting.

-Bathroom.

We got the colour scheme from a magazine, I think.

I think everything in this house is basically out of a book,

-some sort of book, isn't it?

-You shouldn't be saying we plagiarised.

Ah, but talent borrows and genius steals, gentlemen.

And Jay thought he was a whizz with the plastering.

It's hard to argue with the results, though.

So the plan was for me to come in and plaster everything in the house.

So we literally did that, plastered every wall, every ceiling,

so everything in the house has been freshly plastered.

Yeah, the stairway was the biggest job. Thought of that now just gives me goose bumps.

We had to go right from the bottom to the top. It was really quite long.

I've been plastering for a couple of years,

so I'm still learning. But a lot has been done and I've learned a lot.

But it has gone really well.

Some very fine plastering work,

but all the work is excellent throughout.

Kevin and Jay's mates in the trade have helped out,

but do our two purchasers have any personal favourite rooms?

Favourite room for me is definitely the bathroom.

It was such a big space, we tried to fill it.

We got the biggest shower tray we could in there.

-And it just looks stunning.

-I agree.

It's a beautiful change to a spacious bathroom.

And outside, well, originally it was in a sorry old state.

Not that we could see it, but now it has been transformed.

Got a new door fitted. Changed the window. Chipping the garden.

And broke the trees down, and pretty much that's all we done to the back.

But how about the budget and timescale?

Originally, the plan was to finish the project within three months.

We went slightly over, due to school holidays

and we went away with our two boys for their rugby tour.

The original budget was 21,000.

We spent just under 23,000, but the main problem with that was there was

no copper in the house whatsoever.

So the missing copper piping all had to be replaced,

which added a fair bit to their budgeted time and finances.

That unforeseen blip aside, all has gone well

and it sounds as though their choice of lovely paint colours has paid off.

Instantly got the locals talking and sort of coming

and knocking on the door and asking how the work was going.

Interest sparked from that moment on, really.

And we've actually rented out and someone is moving in tomorrow.

What are we always saying about the power of kerb appeal?

But before that new tenant comes in,

we've asked along two local estate agents to have a look.

Will they be as impressed as I am?

I think the property is absolutely lovely.

They've done a really good job throughout.

The main selling points of the house are the original

features of the house are still present, the high ceilings

and very spacious, three double bedrooms.

I was really surprised when coming into the property.

They have done it to a fantastic standard. Really spacious.

Would suit various different types of people.

Jay and Kevin have spent a total of £72,000 buying and renovating.

They want to rent, and the first agent thought the property could

attract a top figure of £525 per calendar month,

while the other agent estimated it would fetch around £575 per

calendar month, due to the high standard of finish.

That top figure could net them nearly 9% in yield.

Does that match with their own estimates?

-Around 500, 525, is what we were expecting. So...

-Yeah.

Happy with that.

But will sales valuations tempt them away from rental?

On the sales market I think this property would generate

a sale of something in the region of £105,000.

I believe in the resale market this property would sell for £105,000.

Paid £49,000 for it. Spent about £23,000.

We are looking at just sort of over £30,000 profit.

-Not bad, for three months' work.

-No.

A £32,000 pre-tax profit to be exact, chaps.

But Kevin and Jay plan to hold on for the long term.

This was the first project for the new mates.

-Still on speaking terms, lads?

-Project went well.

I think we're still mates. Just. By a thread.

So, yeah, we will have a couple of pints, celebrate, and then...

Relax and chill out before the next one.

This is London's East Ham. It is hard to believe now

but it was once an area dominated by agriculture.

However, the opening of East Ham Railway in 1859 prompted

the beginning of increased urbanisation.

And so it became the built-up area it is today.

So I am on a residential street, just tucked away from the main road.

But one negative, the nearest tube station is over a mile away,

which will be too far for some London commuters.

Still, the guide price for a three-bedroom flat in this

purpose-built block here is £110,000.

Now, for London, that is cheap.

It is even below stamp duty, which is not often the case these days.

Now, this is an ex-council block.

The flat has 99 years on the lease

and there will of course be a service charge.

It is also worth knowing that some lenders won't offer mortgages

on blocks over six or seven storeys high,

and floor seven is where I am headed.

Thank goodness there is a lift.

# We'll get up and start again

# We could be lifted

# Lifted

# Lifted

# We could be lifted from the shadows... #

Here is our flat here.

But before I head inside there is something I need to show you.

Have a look over here. Wow! Look at those views.

Yes, there is a big cemetery to look over.

But if you can see past that, look, you have got the Shard,

the Gherkin, amazing.

No more getting distracted. I'm going in.

-# I'm going in

-Put your, put your hands up

-# I'm going in

-Put your, put your hands up... #

Now straight away I know this flat is going to be functional.

It is a bit of a beige laminate fest at the moment,

so there is a lot you can do to upgrade it.

Really good-size kitchen there, cooker has definitely seen better

days, and through here, now, I am not quite sure...

Somebody has put a partition down the middle of one big room to

create two smaller spaces. But weirdly, it does work.

And whoever buys this, if they are thinking of renting it out,

that could be, actually, quite a good option for them.

Something I will say about these purpose-built blocks,

look at the amount of storage. Wow! We have got two huge cupboards.

You don't get that any more with new-builds,

so that is a really big bonus.

Now Martin is always banging on about

how local authority property

can make a really good buy. And he is so right.

OK, the bathroom does need some TLC, but at least the suite is white,

and as we all know, you can have any bathroom suite colour,

as long as it is white, nowadays.

Well, it is always good to have a bedroom

that you can fit a double bed in,

a wardrobe, maybe a chair, so a big positive in that respect.

A big negative is what's down here.

Now, next door is the bathroom,

and I think the bath is in line with this line here.

And it's quite obvious, I think there has been a huge water spillage

and it has been going on for some time,

because this is worrying signs of damp, it smells, it is dry,

there is flaky wallpaper, so whoever takes this on at auction,

I would get that looked at straight away,

because that is one big negative.

And right at the end of the property you have got the lounge.

Now it is so incredibly bright in here,

you have got a little balcony, great for a cyclist,

maybe somebody who wants to come and store their bike out there,

great for somebody who likes a bit of outdoor space as well,

but to have a balcony, and somewhere to look out with a view,

that is a bonus, for me.

Let's go out there.

'Provided you can get out there, that is!

'By the way, the nets are to keep the pigeons from flying in.

'And to find out whether this flat will fly off the property market

'we asked a local agent along to tell us

'what he thinks of this lot, guided at £110,000.'

I think the low guide price is a bit of an indication

that it is an ex-local authority block.

Unfortunately we are on quite a high floor which can be

a little bit of an issue sometimes in terms of mortgage-ability

because it is a high-risk property, to them.

But there are one or two lenders that will lend on the property.

It just makes it a little bit more difficult

when you go into market to sell the property.

And what about the partitioning of the biggest bedroom?

If I was going to sell the property

I would sell it as a two-bedroom property and take the partition out.

If I was renting it as a three bed, I'd keep the partition wall there.

It is going to show up on the deeds that it is a two-bedroom property

as well, so for sale purposes,

I think it would be best to do it as a two-bedroom.

There is logic there.

Three-bed rental income will be higher,

and potential renters probably won't mind the bedroom size compromise.

So what values could be achieved

after refurbishing this £110,000-guided property?

As a three-bedroom property the property would realise

a price for sale of around £220,000 to £230,000.

On the rental market it would rent for round about £1,250 to £1,300

per calendar month.

Yes, it does need modernisation,

and these purpose-built blocks won't be for everybody.

But what they lack in character

they certainly make up for in space, and rental potential too.

Let's not forget that guide price as well,

rather modest for London, I think you will agree.

So, who felt this flat was a good one to go for?

Let's head to the auction and find out.

Who would like to give me a start on this? Lot 133.

130, anywhere?

You bidding? Thank you. 120, I have got.

Bidding is brisk once it kicks off, and we rejoin at £145,000.

Yes, 146, 147, 148, 149, 150.

It is £150,000 against the two gentlemen

here in the middle on my right.

Anybody else? For Lot 133.

If not, 150 for the first... For the second...

150, for the third and final time, all done?

Sold, 150, well bought.

And the successful bidder was speech and language therapist Olwyn.

I met her and her joint purchaser and friend, Dawn, who could not

be at the auction because of her work as an audiologist.

Olwyn and Dawn, congratulations.

What I want to know is, why are we here in East Ham today?

-Whose idea was this?

-Both of us.

-Yes. Mainly Olwyn's.

She is blaming you already. You haven't even done anything wrong!

-No!

-It was all her fault!

-Do you think you have done well here?

-I do, I do.

-Absolutely.

We really like the view, we like the location, we like the flat.

-What is the plan, and why did you want to buy this?

-Just investment.

It is investment, as I said, for our future.

-We are going to rent it out, do it up and rent it out.

-Long-term.

And so it is likely that we will have it

for the next five to ten years at least, I suppose.

It is an investment for pension and for, you know,

when it is time to retire, unfortunately.

Equally, I am also leaving the country

to go and do some research down in South Africa,

so it is important to, you know, if I'm going to be a student now,

it is important to have some income.

Olwyn and Dawn have been friends for over 20 years

and while Olwyn has bought and sold previous homes,

this is their first foray into property

as a profit-making enterprise.

And how are you going to get on working together?

-We have been friends for long enough to know what our foibles are.

-Her quirks!

And we have also recently been doing

a bit of painting together at Dawn's house.

-So we know what that looks like.

-Yes!

-We can be pretty chilled.

-What does that look like?

-Yes, it is lovely!

It is lovely, we have done a great job!

Excuse me, you're not convincing me!

No, she loves it, it is really fantastic. High quality.

We will get the builders in later!

You are saying it is high-quality, and you are not convinced!

It is fine, we are a good team.

We will see when you have done this flat, I will be the judge of that!

Yes, let's see, it will be somebody else's job then!

These two certainly look like they can have a laugh together,

which may be no bad thing, because this place is going to need

a bit more than a paintbrush to turn it around.

So what are your plans for doing the property up, Dawn, tell me?

Well, basically getting it up to scratch, sorting out the bathroom,

kitchen, refurbishing both and probably ripping all that out.

-Definitely get a kitchen, to start off with.

-Get rid of that cooker!

-Please, get it out!

-It has seen better days!

So obviously units, and we will definitely put in

all the white goods, so that we're not having people

fiddling around with plumbing, and what have you.

And, you know, same with the bathroom,

because the bath has obviously leaked onto that wall

and done some major damage.

So we want to make sure that it is made good.

I think with this flat in particular,

the rule is, just keep it simple.

-Absolutely, yes.

-The functional.

Yes. And looking quite pretty, you know.

The ladies are keeping any structural work simple, too.

They are going for the most rental income by keeping

the three-bedroom layout, two smaller bedrooms and one large.

# Give me the simple life... #

So what sort of budget are you looking at?

-We have been saying sort of £3,500 to £4,000, we think.

-OK.

Certainly in the time that we want it done, we want it done quickly,

so we will maybe need to get some really good guys in to do it.

I think that you will be lucky to come in on budget

around that sort of price,

but you never know, if you work hard for it.

And if you know somebody that can help you do the work

-then therefore that is an advantage.

-And we can do a lot of...

-We're quite handy.

-You can do a lot of what?

-Painting.

And filling in of holes.

Uh-oh. Olwyn is volunteering her painting skills.

I am not sure that is the best way to go.

Fortunately they do have a contingency fund, an extra £5,000.

And they will get an agent to manage the property for them

once they rent it out.

-So, ladies, what is your turnaround time?

-Two weeks.

-Two weeks?!

-Is that unrealistic?

-Much to the horror of our builder.

I like the way you keep asking me! "Is that OK?

"Is that enough money? Is that enough time?"

I would say that two weeks and four grand is pushing it,

but I like your energy and your positivity,

so I will keep my fingers crossed.

We are aiming for the very best.

-Ladies, good luck with this project, well done.

-Thank you so much.

So the ladies asked me, what do I think?

Well, with a four-grand budget and a two-week timescale... Urgh!

A little bit ambitious maybe.

And another issue, will Dawn let Olwyn loose with a paintbrush?

Good job they are old friends.

You can join me later in the programme to see how they get on.

So that is how one of the properties today has panned out.

But what about the others?

Yes, let's head back to our two other auction purchases,

and find out how they got on.

I can't wait, so why don't we find out?

Back to Totton near Southampton

where earlier I saw a three-bed semi guided at £150,000 plus.

However the obvious downside was a lot of jobs had been started

but remained unfinished.

I can see again there's unfinished guttering

which should go to the top and across.

And inside I found the unfinished style continued throughout.

The whole house had been left midway through renovation.

# Like a promise I had you repeat

# But you left me undone and incomplete.

# Come back and finish what you started

# Don't leave me hanging on and on... #

Erm... I'm over here.

Funny how open-plan bathrooms have never caught on.

And there was no guarantees

that any of the work completed was actually safe,

meaning this was a "strip it all out and start again" job.

Luckily John and Stephanie were experienced developers.

But was this £162,000 purchase too much, even for them?

Was this one of the hardest ones to renovate, or was it an easy one?

-It is probably up there as the most difficult.

-That you have had so far?

-Yes.

-That does not frighten you at all?

-No, not really.

There's nothing THAT difficult on it.

Eight months on we are back to find out if they have

undone the work and put things right.

On the outside the answer has to be yes.

Roof repairs, new windows throughout,

and that bothersome bay window fixed.

And at the back, there's new rendering,

and that pesky guttering has been replaced.

The back garden has also been landscaped and looks fabulous.

And inside...

It doesn't just look amazing, they have also tackled the layout.

Yes, we added a new lobby at the back of the house.

We put in this wall and a nice diagonal door into the kitchen.

We replaced the back door

and we built a downstairs cloakroom here to give us added facilities.

We built this lobby area by taking the wall off the back of the lounge.

It closed off the stairs,

created this nice, bright lobby, and we are very pleased with the result.

All the work has taken eight months,

well over their four-to-six-month timescale.

But John did say he always underestimates

and always knew this would be a tough challenge for them both.

Going upstairs we remodelled the main bathroom, moved the wall a bit

to give a bit of space,

and also to pick up space in the back bedroom.

The mid-bedroom we have done not too much with

apart from a bit of refurbishment and painting.

And the main bedroom we moved the wardrobes around, and again,

carpeted, painted, redecorated.

John and Stephanie have also renovated the en-suite bathroom.

Unfortunately the loft did not meet building regulations

and the couple have wisely opted to convert it into storage space.

Similarly, the extension had passed building regulations

for foundations and brickwork, but not for anything else.

So John and Stephanie took it back to brick, rewired, and replumbed.

And all that quality building work

is complemented by clean, modern decor throughout.

We decided to keep it a neutral colour scheme,

we just decided to go for the grey, gloss kitchen.

We thought that looked really modern,

with the wood-effect worktops.

We did have a nice black slate floor

but unfortunately it had been quite badly damaged

so reluctantly we decided to cover it over with laminate wood flooring.

The good news is that despite having to redo all the work

John and Stephanie only went £5,000 over budget,

spending £35,000.

So how was working together over the eight-month-long renovation?

We make a good team, but there are arguments along the way,

differences of opinion, I should say. As you get tired sometimes it

gets a bit stressful, but of course, that is life.

We always discuss what we are going to do

then I get the envious task of organising all the work to be done,

or doing it, and then Steph comes in at the end,

and really helps along with the painting and finishing and

the cleaning up, sweeping up, and making the tea.

Her cups of tea are excellent as always!

But there are two sides to every story.

How is working with John, really, Stephanie?

No pressure to say nice things, he is only stood by the side of you!

Yes, he is quite demanding at times!

He expects a lot out of people who work for him.

But obviously we want to achieve a good finish.

And it is all worthwhile in the end.

It is time to find out what two local estate agents

think of the renovation.

Does the layout and finish suit their target market?

I think they have done an excellent job.

One of the things this area has

is a lot of properties have downstairs bathrooms,

because they were built in Victorian times.

But the fact there's an upstairs bathroom

makes this property very sellable,

it has an en-suite as well, which is a massive bonus,

and off-road parking, which in this area is quite important.

I like the layout of the property.

Previously it had a really large open-plan living room/dining room.

But having put this lobby in here

they have managed to squeeze in another toilet.

I don't think you can have too many toilets,

I think they have got three here, I really like the scheme.

John and Stephanie are keen to sell,

but can they make a profit on their £197,000 investment?

I think this house could currently sell for £245,000

and rent for around £900 per calendar month.

I think this property would sell for £245,000 to £250,000.

As regards rental, I think you are looking at

around about £850 per calendar month to £900 per calendar month.

They are very good, that is in the range we were expecting,

and in actual fact we have just had an offer for £249,950,

which we have accepted.

And that offer they accepted is right at the top of the agents' estimates

and given them a pre-tax profit of just under 53 grand.

Thanks to their hard work they can enjoy

one of Stephanie's legendary brews,

in the knowledge that their most ambitious project

has been a very profitable one.

When you start out you can't really see what the end is going to be!

But it has worked out really well.

We head back to East Ham in London now where I saw a three-bed flat

guided at a low - for London - £110,000.

But the flat itself was up high with views to die for over the capital.

Inside it seemed that it was a two-bed impersonating a three-bed.

Somebody has put a partition down the middle of one big room

to create two smaller spaces, but weirdly, it does work,

and whoever buys this, if they are thinking of renting out,

that could be, actually, quite a good option for them.

But a big negative is what is down here.

Now, next door is the bathroom

and I think the bath is in line with this line here

and it is quite obvious, I think,

there has been a huge water spillage,

this is worrying signs of damp, so whoever takes this on auction,

I would get that looked at straight away,

because that is one big negative.

Fixing the damp and tuning up this flat fell to friends

Olwyn and Dawn, who paid £150,000 at auction.

And while both are successful in respective medical fields,

the ladies seemed a little unsure about the property world.

-So, ladies, what is your turnaround time?

-Two weeks.

-Two weeks?!

-Is that unrealistic?

-Much to the horror of our builder!

-I like the way you keep asking me! "Is that OK?"

-I have no idea!

-"Is that enough money? Is that enough time?"

-I have no idea!

Oh, dear. And they wanted all the work done for £4,000,

hoping their handiness with a paintbrush would stretch the budget.

So how have they got on, two months later?

They've certainly lifted the spirits of this tired-looking flat.

And with Olwyn away on research leave in South Africa,

Dawn has come to tell us about all the changes.

We've put a new kitchen in.

We've put a new bathroom in next door.

The rest of the stuff we've just painted and refloored.

-TOOLS BUZZ AND WHIR

-So the main works have been done in the kitchen and bathroom.

Thankfully, that sawing you could hear in the background

is not the builders still frantically trying to meet

Olwyn and Dawn's ambitious two-week timescale.

In the end, it all took two months.

The timescale was impacted a little bit by the fiddly-ness.

The builders, probably commitments to other projects,

so sometimes they could dedicate three days,

but then they would be finishing off a project somewhere else.

So that is always a little bit push and pull from either side.

Better to take your time and do it right.

Damp always takes longer than you think to fix,

even if it is less problematic than expected.

Case in point, right here.

So, the damp in the end bedroom

that the wall was next to the bathroom

was because the tenant was not here any more,

and using the facilities, the wall was dried out.

So it was not a particular problem.

It was just purely when anybody had a shower it would leak through.

Basically it just needed to be sanded down

and a barrier put up just to make sure no damp reappeared through it.

It all looks quite nice in there now.

And after fixing the remedial work,

attention turned to the plan of making the property high spec.

Or did it?

Basically, with the spec we decided to bring it down a little bit,

because of the cost implications.

We just wanted to get it on the rental market as quick as possible.

So it was that tight turnaround time we were aiming for, basically.

And what impact did that have on their £4,000 budget?

So Lucy was a little bit concerned about the smallness of it,

considering what we had to have done, and of course

we always had a contingency, but I think it came in about £8,500.

-I think we got enough stuff, for that.

-I agree, Dawn.

But was some money saved by absent Olwyn,

and her skills with a paintbrush?

So Olwyn and painting, she is very good,

so she did actually do the majority of the painting.

Obviously to keep the cost down.

So the builders would do all the tiling and the fitting out.

And usually you would find her in tracky bottoms

and covered in paint from head to toe,

because she had been doing it all herself.

The time that she had to do it, because I wasn't involved,

it is hard, and she had other things to do,

but she really knuckled down,

and I think she has come through quite well. Yeah.

And they'll both have come through well

if they get a good rental yield.

So time to call in two local estate agents.

What do they think of the finish,

and would it suit their target market?

The finish they have gone with is fairly basic.

But for rental it would be ideal.

I think if you were selling the flat on

you would possibly look at maybe a better grade of kitchen and bathroom

but I think for rental it works just fine.

I like the fact that the kitchen has been changed,

the units and appliances.

Also, the bathroom furniture as well has been changed.

So it is a flat with potential on rentals, and to sell it.

But what are the potential prices,

and how do they stack up against Dawn and Olwyn's £158,000 spend?

You can either sell the property,

the price ranging between £210,000 and £215,000,

or there is a possibility to let it out at a price range

in between £1,100 per calendar month,

to £1,200 per calendar month.

As a three-bedroom property it could sell for £210,000,

or for rental, £1,200 per calendar month.

A potential pre-tax sales profit of £56,500 is great.

But a rental yield of 9% is what Dawn will be keen to hear,

as the plan was for a long-term let.

We have already spoken with our letting agents

and I think we are going for the £1,200, maybe £1,300.

So that sounds very similar, very similar. Quite pleased.

This was the ladies' first project together,

so has Dawn enjoyed the experience, and will we see more from the duo?

Olwyn was probably the driver behind this project.

I love property development

and I would love to take that forward also.

Yeah, definitely, it is a very good option, so, go Olwyn!

Well, as you have seen, investing in property

can have its highs and lows, its ups and downs.

It can be a real learning curve. And usually is.

So make sure you join us next time for more tips and advice

here on Homes Under The Hammer.

-Goodbye.

-Goodbye.

-Goodbye.