Episode 39 Homes Under the Hammer

Hello, and welcome to the show.

Now, when you're buying property

there are often delays and complications.

Words like "best and final offer", "gazumped", and, urgh,

the dreaded "chain" will fill you with dread.

But if time is of the essence,

why not pop down to your local property auction?

Yes, the keys could be in your hands in just four weeks.

So, do you fancy buying under the hammer?

Well, I always like to find out stories behind the auction buys.

Why did they want to buy, and what are they going to do?

Well, I think it's time to find out, don't you?

Here are the properties on today's show.

First up in Bury, Lancashire,

the auction room can be a tough test.

It's, erm, quite frightening.

But at the same time exciting.

Whilst in Grove Park, London,

Slava breaks the hammer rules.

Now, did you have a chance to glance through the legal pack

-prior to the auction?

-No.

-You didn't read it?

-No!

And in the picturesque village of Butetown, Rhymney,

I get off to a good start.

What am I going to find?

Ooh...

it's nice!

All these properties have been sold at auction.

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

when they went under the hammer.

Yours, madam. Well done.

We go now to Bury in Lancashire, a popular commuter town

for those working in nearby Manchester.

But Bury is also popular for its well-known market.

In particular, the Bury black pudding, which is sold right here.

Just a 10-minute drive away from Bury's busy town centre

is a property I'm here to see.

It's a two bed extended semidetached property

with a guide price of £75,000.

Now, that seems quite reasonable to me.

Am I going to feel the same way after I've had a look around?

Let's see what you get for your money, then.

You've got your stairs off a very small hallway

going up to the bedrooms.

Straight into a lounge living area, which is an OK size.

Laminate flooring, which I'm not a massive fan of.

I do like a nice snuggly carpet underfoot in the lounge living area.

Fireplace there, which seems OK.

Warm up those cold evenings. Not too bad.

Through into the kitchen, which is quite dark.

A long galley kitchen here.

Not a massive job in the kitchen at all, I'm quite surprised, actually.

Through into the extension here,

which is quite cold.

I can feel it, as soon as you come in, you can feel that it's cold.

Probably single lined walls.

On all sides of this sort of makeshift lean-to.

And it just doesn't work, doesn't work at all.

So, I'd be inclined to, I'll have a look outside as well,

of course, but I'd be inclined to get rid of this.

It's just...

It's not in keeping with the house at all.

Bit disjointed.

# You'd better do better than that. #

Down here is obviously a little bit tatty all over.

And I'm not at all keen on this extension.

With the lack of insulation in here, it seems like a job half done to me,

and an opportunity missed.

But let's see what's in store for us upstairs.

OK, upstairs you have got the two bedrooms,

bathroom there, which somebody's started decorating,

sort of a beach hut look just there.

But neat enough.

Bedroom there at the back of the property, which is,

it's a bit of a mess, but an OK size.

You'll get a single bed in there, or a double.

Into the main bedroom over here,

but my eye's straight drawn to this horrible piece of damp.

And it's actually still quite damp to touch.

This must have been happening for some time

because it's completely rotted away.

So, it must have been seeping through for quite a long time

to make it look as bad as this and feel as bad as this as well.

So, this whole area isn't in good condition whatsoever.

And I think somebody's tried a bit of, not DIY,

I think this is dodgy DIY.

So, that would be DDIY, then?

And not recommended.

Investigate the roof and the guttering thoroughly, though,

and hopefully this damp can be dealt with.

Patching over the damage just won't do.

Time to head outside.

OK, outside to the back garden.

There is a bit of space out here, a bit of grass as well.

As you can see, you'd need to put some new fencing up

along the side of there and at the back.

Just generally tidy it up.

I'd be inclined to get rid of that shed, it's a bit of a mess.

But I do like to look back at the property

cos you can see some things that you can't see from the front.

Now, the point is not great at all,

and I can see a crack above the back window as well.

Apart from that, guttering seems fine.

This could be a nice outside area, nice garden space,

table and chairs, nice cup of tea, beautiful Sunday afternoon.

Before the kettle goes on, though,

there's a fair bit of work to do here inside and out.

Like I said, I would take another look at that extension if it were me.

But it does have a healthy guide price of £75,000.

Let's hear the opinions of a local property expert.

First impressions of the property,

it needs a little bit of TLC.

It needs some renovation, some decoration,

and I think there are a few little bit and pieces to be dealt with

with regards to the property to improve it.

As I thought, some work to be done and some decisions to be made.

But once it's refurbished, what kind of valuation are we talking?

This property, when renovated,

would probably achieve between 95 and £100,000.

And what about rental?

Once renovated, this property would achieve on the rental market

between 500 and £550 per calendar month.

This property seems to be in reasonably good condition.

You can turn it round with a bit of TLC.

Small renovation job,

and you could make a few quid if you put it up to rent.

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

Anybody here? Extended two bedroom semidetached.

Let's get it started at £65,000.

Anyone?

65 here.

I've 65 on bid here now. In ones.

66. 67.

That's 67 I'm bid now.

68.

Just beat you to it, sir. 68. 69?

Can I? 69, I'm bid.

70?

You're out.

70 I've got.

In a very quiet auction room,

the property's mustering up some interest.

We rejoin the bidding at £78,000.

78.

79.

80. Shake of the head.

Here at £79,000, stood to the rear.

For the first time, then, with you sir, it's 79.

Second time it's 79.

If you're all done...

79 and a half, I'll take it. 80.

Can you? 80 I've got. Half?

You're out. With you now, sir. Against you, and against you.

At £80,000, here to sell.

First-time, second time.

Are you all done?

Then at £80,000, I'm selling this.

-GAVEL STRIKES

-Well done, sir. Stood to the rear.

Paddle number...

The successful bid of £80,000 goes to retired science teacher, Paul.

# Teacher, teacher

# There's so much I'm longing to know. #

Property novice Paul used to live and work in Bury.

But now lives up on the west coast of Scotland.

I met up with Paul to hear what scientific methods

he was going to apply to his new purchase.

-Hi, Paul. Nice to meet you.

-And you.

-Congratulations.

-Thank you very much.

Tell us about the auction, first and foremost.

How was it, cos this is your first big venture?

-My heart was really pounding. I thought...

-With excitement, maybe?

-Yeah, it was, but also, I mean, it's first-time.

-Of course.

First time I've been to auction, bought a house,

-and suddenly it dawns on you. Goodness!

-This is mine!

-I've got this house!

-I've got to do something with it now.

So, erm, yeah, it's quite frightening.

-But at the same time exciting.

-Good for you.

Well, you've got it now. It's yours.

What are you going to do with it? Have you got any ideas?

Are you looking for ideas from your family, or wife, or?

-There are no major concerns.

-Uh-huh.

-Obviously, a bit of work needs doing on it.

-Yeah, of course.

-I'll get a roofer in to check that over.

-For the damp?

-The back bedroom.

-Yeah.

I think that's probably the gutter.

I've got a couple of guys lined up who are, sort of, professionals.

-One being a roofer, and a plumber.

-Yes, yes.

-So it's all new, this is all new to you, Paul?

-It is.

I mean, those sort of skills I haven't got.

-So I'm going to get the professionals in.

-OK.

Get the heating sorted out, get the roof sorted out.

Then the rest of it, I'm going to do.

What about that little addition just to your right shoulder, there?

-You mean here?

-Yes, little thing here. Correct!

-It looks a little bit of an eyesore from the outside.

-Will you keep it?

-I will.

-OK.

-I will.

One of my sons, he loves it.

He thinks it's really quirky.

And he loves the wood panelling on the outside.

Yeah, I will work on it and improve it.

But I think it's quite useful addition.

Yeah, if you get it right and you get it insulated.

-Properly insulated, new French doors on.

-Yep.

And, erm, it should hopefully be a nice little extra room.

Kitchen seems fine.

-Yeah, it needs, obviously, a good clean.

-Of course.

-But it's big enough, isn't it?

-It is, yeah.

Yeah, I'm quite impressed with the kitchen.

I mean I had thought about putting a white kitchen in here

-to create a bit more light.

-Yeah.

But I've got to, as my two boys keep telling me,

you're doing it up to make a little profit, hopefully.

-I've got to keep a tight control on the budget.

-Yeah.

So, I'm just going to decorate and brighten it up.

So, what is, you mentioned a tight grip on the budget.

What is your budget going to be like for this for this overhaul?

-Hopefully about £5,000.

-OK.

-To do everything?

-To do everything.

-Wow.

I mean, the boiler. I've looked at boilers, £650. So...

-Big chunk, isn't it?

-It is.

-Big chunk of the budget.

-And the roof, I'm hoping probably £1,200.

-OK.

Just overhaul the roof, guttering.

# Money's too tight to mention

# I can't get an unemployment extension. #

Well, that is a tight budget

considering the work that's needed here.

Paul hopes to get that work done in 10 to 12 weeks

with the help of three of his four sons,

two of whom owe him a favour.

I retired two and a half years ago.

About that time, both boys bought a house around my distance

and they needed decorating from top to bottom.

-So, I give them a hand.

-Ah.

Or did you do it all?

Oh, no! No, they both, obviously, they were working.

So their time was limited. Weekends.

But I was there seven days a week, so,

I did the bulk of it, I think.

But they both got their hands dirty and got involved.

So, I think they both owe me.

-They'll come back, and, erm...

-They've got no choice.

-They can take one of the bedrooms on and do that for me. So...

-That's it.

Give them a bedroom each and they can sort it out, can't they?

-Yeah, I can be the boss. I can be the foreman.

-Exactly.

Well, Paul, I wish you all the best.

I'm sure your sons will hope you achieve what you want to achieve

-in that head of yours.

-I hope so.

-Good luck.

-Thank you very much.

I hope it all works out for you.

Paul, the retired science teacher, is taking on a new type of experiment,

this time in the property world.

Will he stay within that £5,000 budget,

and will he keep this wooden structure?

It's not for me.

You can find out how he gets on later on in the programme.

This is Grove Park in south-east London,

with its excellent rail links in to the city,

Grove Park is becoming increasingly popular with young professionals and families.

It's said that Edith Nesbit, author of The Railway Children,

found inspiration for her famous book after living in the area

from 1894 to 1899.

Now, I love a bit of local history.

But it's time to get back on track and find out about today's property.

When buyers are priced out of Blackheath and Dulwich,

they turn to this area for more affordable alternatives,

as you get more for your money around here.

So, what was the guide price for a two-bedroom ground floor flat

along this, admittedly, rather busy road?

£125,000 plus?

Sounds like it could be good value to me.

£125,000 might not sound cheap to everyone.

But don't forget, this is the London property market.

The most expensive place to buy in the UK.

Well, it's all a bit angular entering the flat.

A little bit, sort of, difficult to get in.

And a really long corridor.

And I mean really long!

Gosh, all of the rooms lead off here.

So, we've got the lounge through there, which is a fantastic space.

Got a little bit of storage there.

Really nice high ceilings.

Another bedroom, perhaps, through there.

And then it becomes really condensed.

Look at that, it's like a very squashed space through here.

Now, in here is the kitchen.

And it's just feels like it's been slotted in

along this really long corridor.

But once you're in, again, you've got these nice high ceilings.

So, it feels quite spacious when you're in here.

And I'm quite happy to say that I think you could leave the kitchen as it is.

Get rid of all the surface debris.

Maybe put down some new flooring,

because this lino has definitely seen better days.

But not bad at all.

A bit of a clean, get the old rubber gloves on,

and, er, what have we got out here?

Well, this is a rather small lean-to.

I'd usually say knock these down,

but actually it does serve a purpose.

You could store your boots and your shoes

and your little bits and pieces for your garden.

Now, when I say garden, that's because the good news is

with this ground floor flat, you get some outside space.

And it's fantastic outside space. I mean, look.

You've got pretty shrubs, you've got outside area.

You could grow vegetables.

There's table and chairs over there for the summer months.

And you do have to share this with the flat above.

But what's not to like?

It's a great space for London.

# Better than nothing

# I can't deny

# Better than nothing

# Poke in the eye... #

Yes, outside space is much sought-after in London,

and not to be sniffed at.

Stepping back inside, there's a tiny bathroom in need of

freshening up and another double bedroom

which is in need of a total makeover.

And it looks like the electrics might need to be updated too.

It all feels rather dark and higgledy-piggledy in this flat.

But it's still a great property for that guide price.

So far, so good, not much work to do in the flat.

But this is something I always say - if something's sold at auction,

well, there must be a reason why,

and usually that translates into an issue of some description.

So...maybe there's something you can't physically see

with the property?

Yes, I'm afraid so, one of the reasons that this flat

went to auction was probably because it has

a very short lease of only 56 years.

Not good news, and a costly problem to sort out.

# Too good to be true

# Too good to be true... #

You would need to contact the freeholder to discuss

the lease extension, which could take time

and will undoubtedly amount to thousands of pounds to sort out.

Unfortunately though, with such a short lease, well,

it'll be very difficult to get a mortgage on this flat.

Cash buyers only, and I hope that whoever bought this flat

stuck to Hammer's golden rule - read the legal pack.

We invited a local estate agent along to discuss the highs

and lows of this ground-floor property, guided at £125,000 plus.

The flat would need a total overhaul in terms of kitchen,

bathroom and a general decorate.

For resale value, having a short lease,

it becomes very difficult, cos it is for cash buyers only.

Which does limit yourself on the resale value.

From experience, extending the lease

could range from anything around £3-4,000 up to £30,000.

Wow, so it really could be a massive expense on top of

the purchase price and renovation costs.

You just don't know what the freeholder will ask for.

Quite the gamble, but is it worth it? Let's hear those valuations.

I believe this property could sell with a new lease

in the region of around £225,000.

With a short lease, once renovated, in the region of around £165,000.

So, a big, big difference.

Fingers crossed, that lease won't be too expensive to renew.

Let's hear the rental figures, which won't be affected by the lease.

Once renovated, I believe this flat would achieve

in the region of £1,200 per-calendar-month.

So, a decent flat for an affordable price in this part of London,

but its end value will always be limited until that short lease

is extended. Who wanted to take it on?

Let's find out, when it went under the hammer.

Resold self-contained ground-floor flat, with a garden,

start me at 110.

Thank you, at the back, 110 I'm bid. 115...

10 I have. Thank you, 15. 20...

20. 25? Might take a thousand.

21. 22?

-No. £121,000 then...

-After a cagey start, the bidding picks up,

and we return at £135,000.

For the first... 36, 37...

37... 38.

Ah, your friend says yes. 138. 39?

39, make it 140.

At £139,000... At the back on the left.

First time...

second time...

140. 41?

41. 42?

Think they meant it this time, think you've got it, sir.

141 then, for the first...

second...

third and final time, at £141,000...

HE STRIKES HAMMER

Sold to you, sir, at 141.

And that successful bid of £141,000 belonged to

bespoke furniture maker Slava.

He was bidding on behalf of himself and business partner Macin.

They're both originally from the Ukraine,

but have been living and working in the UK for ten years.

They renovated properties back in the Ukraine,

but this will be their first foray into the UK market.

I met Slava back at the flat to find out their plans.

-Slava, congratulations!

-Thank you.

So, are you happy with the price you paid on auction day?

Eh, you know, what can you say?

I'm happy, yeah, because I've started with something,

but always could be less.

OK, so this is your first ever auction purchase.

Yeah, and the property as well.

To be fair, there's not a lot you can

buy in London for under £150,000 with a garden.

That's right, yeah.

So what is it that you liked about this property

and did you view it beforehand?

It was a quick view, about 15 minutes.

What I like is the condition is not that bad,

so not much to spend on it to get it even better.

And the garden, as you said,

and also it's quite convenient for me as I work nearby.

I know that you are a furniture maker.

Are you hoping to tie the two,

property developing and making things, into one job?

Yes, that is the main idea, because quite often we work

for someone who is developing a property,

and we've seen them doing it, and we're working for someone else,

me and my partner thought we were going to do it for ourselves.

And what sort of furniture do you make?

What do you think you could put in here that would really lift it up?

Everything - new kitchen, new wardrobes for the bedrooms,

and we'll see what to have in your lounge as well,

some alcove units.

Now, did you have a chance to glance through the legal pack

-at the auction?

-No.

-You didn't read it?

-No.

Why did you not do that? Did you know about the legal pack?

No, honestly, it was all too quick, and I just thought, "Go for it."

-So you were happy to take a bit of a chance?

-Yes, that's right.

What about the lease issues?

It said in the catalogue it had a short lease,

how much did you look into that?

I called to the solicitor, and they said there is a chance

we could extend it after the property is registered in your name.

There is a chance they can refuse it,

but I always think of the positive side.

So you said, "I'm not listening to that, I want to buy this flat."

-So you still don't know any more information about the lease?

-Yeah.

-It could be anything at all.

-It could be.

# Don't worry

# Be happy

# Don't worry, be happy now... #

Despite the unknown cost of removing the lease, Slava is

cool as a cucumber and sees this as more

of an experience-building project rather than a money-making one.

I just hope he doesn't end up out of pocket.

What are you going to be doing?

Renovate it, put some furniture in there, freshen it up

as much as we can, with the budget as low as we can as well.

OK, so what is your budget?

The budget, I would think around 10,000, something like that.

-That is pretty low.

-Wow, £10,000!

Maybe more, we have all this extra cash if we need some,

but this is the ideal.

OK, so £10,000 budget, you're going to change the kitchen,

-the bathrooms, you're going to put furniture in.

-Yes.

How long have you got to do the work here?

I can't wait to see what you're going to do.

-Optimistically, we've got one month.

-One month!

Wow, it's going to take you that to get all the woodchip wallpaper off.

Yeah, we don't have that time,

so we just going to crack on straightaway.

And you are looking to sell this on?

I don't know yet, maybe keep it and put it for the land,

-and after just look for the next one.

-OK.

If the lease won't turn out, because we won't be able to sell it,

so we're going to keep it to rent out and look for something else.

Listen, congratulations, your first property buy, a success.

-You need to get the lease sorted.

-Yep.

And I can't wait to see what the interior is going to

-look like by the time you have finished with it.

-Thank you.

-Well done, congratulations.

-Thank you.

-Thank you.

So, Slava seems very laid-back about what could be

a very costly issue - that lease.

But I think he has got himself a good rental flat,

and I am so looking forward to seeing the bespoke furniture.

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

Still to come - in Butetown, Rhymney, there's a pricey problem.

You could be waving goodbye to thousands

and thousands of quid just to sort that out.

In London's Grove Park,

not everything has gone quite to plan for Slava.

There was lots of surprises here,

the flooring was one of the biggest ones.

Back now to Bury in Lancashire, which was home to this two-bed property.

It boasted a small, rather chilly side extension,

and had a guide price of £75,000.

It was tired, but well-proportioned.

However, there where a few signs of damp upstairs

that would need some attention.

Despite that, it did prove pretty popular on the auction day,

eventually selling for £80,000.

Well done, sir.

That successful bidder was Paul, a retired science teacher and

a novice renovator who had a small case of property developing jitters.

-My heart was really pounding.

-With excitement, maybe?

Yeah, it was, but also, first time, first time I've been to auction,

bought a house, and it suddenly dawns on you, "Goodness..."

-"This is mine."

-"I've got this house."

"I've got to do something with it now."

Yeah, it's quite frightening. But at the same time, exciting.

# Well, I'm nervous and I'm shaking all over... #

Helping him get over his nerves was the assistance

of three of his four sons.

However, with a long list of jobs to do, his £5,000 budget

had me biting my nails.

Paul had also planned a 10-12 week timescale,

at the end of which he hoped to sell the property for a healthy profit

to kick-start his property renovation prospects.

It is now five months later, and we've returned to see

if Paul has been able to teach this property a lesson or two.

What a great improvement on the ground floor,

with the extension going straight to the top of the class.

New French doors and total redecoration

make it far more appealing.

And both the kitchen and living room had been neutrally decorated to

a really high standard, with some care and attention

paid to the fireplace, making it a lovely focal point.

Let's see if the improvements continue upstairs.

The damp that ran through the upstairs bedrooms has been

given detention, and replaced with

nice, clean lines and tasteful decoration.

The bathroom has been cleaned up and refreshed.

And I'm happy to say that the back garden has been fenced in

and tidied up, and thanks to Paul's green-fingered son Andrew,

the flowers are very much in bloom.

So, having completed his very first project,

I'm dying to find out how it has gone for Paul.

Seven days a week, sort of 12 hours a day.

For about 16 weeks.

So it's been a long, hard slog.

But I've enjoyed it, I've enjoyed it.

When I started the work, it went pretty well,

and when I got towards the end of the kitchen, I discovered

damp in the corner where there had been a washing machine.

On further investigation,

I realised that the skirting board was rotten,

there were three or four bits of floorboard that were rotten,

and then underneath there were three sections of joists that had

also been affected by the rot.

So I was absolutely gutted on discovering that.

But the bits of joist have been cut out and replaced,

and the floorboards are being replaced.

But it was a disappointment and a big blow,

and it took a couple of days to get over that.

# Whoa-whoa, it is not easy... #

Property developing certainly can be a cruel and fickle business.

And for Paul, it's been a fairly steep learning curve.

However, he rolled with the punches and got the floor fixed,

along with a completely new central heating system, new guttering

and some roof work to fix the damp.

But I doubt there is much of that £5,000 budget left.

From £5,000, I spent just over £10,000,

and restored the house to its former glories, I hope to think.

I was very fortunate that, during the project, my son JP gave me

a hand with the electrical work, and Andrew, my youngest son, gave me

a hand tidying up the garden and getting that looking a lot better.

Although there was a fair bit of extra work

that Paul hadn't accounted for,

he still managed - with the help of his sons

and a good team of tradesmen - to get it all done in 18 weeks.

Well, with his first venture under his belt

and a total investment including the purchase price of

just over £90,000, Paul will be eager to hear the thoughts

and valuations of two local estate agents.

Well, first impression, first visit to the property, is good.

Come in, it's bright, it's neutral, still leaves the buyer

or the tenant the ability to put their own stamp on the property.

Yeah, very good impression.

I've had a look around, the standard of finish on this property

is really good, I think it's a good selling point, I think

it's been finished off excellent, to a good standard.

They're impressed,

but will ex-schoolteacher Paul's work get top marks?

Let's hear rental figures first.

I think this property could achieve

£550 per-calendar-month on the rental market.

I think in the rental market today,

the property would be worth between £600 and £650 per-calendar-month.

That's very pleasing really.

I hadn't thought about renting it out,

but if I were to consider that, yeah,

they're both encouraging, particularly the second one.

Well, if Paul did achieve that top rental value of £650

per-calendar-month, that would mean a yield of over 8.5%.

But Paul has always wanted to sell.

I'd look to achieve £110-115,000 on the sales market for this property.

If I was putting this property on the sales market,

I would value it at around £120,000.

If we take the middle number of £115,000,

that would mean a pre-tax profit of 25 grand.

Which, for a first attempt at property renovation,

is really pretty good going, and leaves Paul all smiles.

If I get 110 or 115, I'll be absolutely delighted with it.

# What a beautiful day, hey-hey

# A beautiful day

# Nothing is impossible in my all-powerful mind... #

This is Butetown in Caerphilly, southeast Wales,

just four miles west through Tredegar

and about a mile north of Rhymney.

Well, Butetown was a model village built

in the early part of the 19th century

to house workers for the local ironworks.

And it really is adorable.

Built to a very high standard, with its own shops, school,

church - what a great place to live.

The Caerphilly countryside is just stunning, and Butetown, which was

built in around 1830, centres around three rows of houses,

all built using locally quarried stone.

Well, quite a lot of the original properties survive,

especially in the conservation area, and they really are rather lovely.

This one came up for auction,

a three-bed mid-terrace at a guide price of £59,000.

Looks lovely, let's take a look inside.

The anticipation is always so high with these kind of properties.

What am I going to find?

Ooh, it's nice.

The first thing that greets you

when you come through the door is this amazing fireplace.

This whole natural stone thing can be a bit too much occasionally.

This just feels authentic, with this old beam here,

wood-burning stove there, it just creates exactly

what you'd hope for when you walk through the door,

a real characterful feel. It's not a bad-sized room.

Two small windows, but it's dual aspect, so it doesn't feel dark.

Not a massive head height, but you wouldn't expect that. And... Yeah.

Few signs of damp on this wall here, so that needs to be sorted out.

But then you go through here to the kitchen,

and obviously some kind of extension on the back,

probably only single-storey, but it's not in bad condition.

Long and thin, sort of galley-style.

You could live with that. All in all, a very good start.

# A cottage for sale... #

I certainly wasn't expecting it to be as bright as it is

in here, but will the sun keep shining on the next floor up?

Up here on the first floor, it does feel a little bit

more constricted, the head height is pretty, erm, non-existent.

And a few signs of damp in the bedroom there,

and then into the bathroom, it's a good size, you got a bath

and a shower, it's kind of cute, but this is where

the whole cottagey thing starts to come in,

because we've got some serious sloping going on.

Handy piece of tape, let's put that there.

As you can see...It's MAJORLY sloping that way.

Whether that's historic, whether that's recent settlement,

whether it's a problem with the floorboards over there,

the joists, I don't know, it needs investigating.

And it's one of those things, once you start poking about,

you don't know quite what you're going to find.

But one thing you will find for sure in this property is a lot of room.

Up another flight of stairs and you've got two more bedrooms.

A smaller one at the back and a larger one to the front.

This front bedroom has the added bonus

of an en-suite loo - very handy.

And believe it or not, there's more.

Up some very steep steps that won't be appropriate for everyone,

there's an attic room.

Perfect for storing away all that clutter

that comes with modern living.

Well, here at the back of the property,

there's some good news and some very bad news. The good news?

You've actually got quite a nice little garden,

and also rear access, so you can bring your car in there.

So that's good, what's bad is up there on the roof.

You can see, the chimney stack is covered in, well,

plastic and some kind of reinforcing thingmyjob.

What happened was, the chimney became dangerous

and the council had to step in to do the work to repair it.

It says in the legal pack that whoever buys this has to

repay the council the money for those repairs.

But when the repaired it, they didn't repair it fully,

so you're going to have to do a proper renovation job

on that chimney stack.

"So what?", you might say.

Well, remember, this is a Grade II-listed property,

and therefore that has to be done to Grade II-listed standards.

It's a time-consuming, specialist and therefore very expensive job.

You could be waving be goodbye to...

phew, thousands and thousands of quid just to sort that out.

# La-la-la

# If you want to do something now

# Do it right... #

Well, no-one said taking on a Grade II-listed property

in a conservation area would be easy.

And it looks like you'll have to evict a couple of

feathered squatters too.

So, at a guide price of £59,000,

is it worth the hassle?

We asked a local estate agent for her opinion.

I've had a look around this property and I love it.

It's exactly what I expected it to be.

Traditional Welsh village type cottage.

The person who buys this property is going to want

that traditional...history.

This is fabulous, I love it.

Well, the estate agent is enthused, but what about that chimney?

As far as the chimney is concerned, yes, it's a big job,

but it's not that big, I don't think it's going to put anybody off,

it certainly wouldn't put me off.

With that in mind, what kind of sales figures are we looking at?

If this property was done up to a decent standard,

then I would be looking to put this on the open market for £110,000.

-And rental?

-We'd be looking at £450 per-calendar-month.

Well, this really is a charming little property

in a lovely location, a rare auction find indeed.

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

Three-bedroom Grade II-listed mid-terrace cottage,

make it £50,000, start me. Got to be 50.

Make it 45 then, if you like, I'm in your hands,

you start me where you want.

£45,000, wave your hand. Thank you, 45, I got you.

At 45 there, 45,000, and six now can I see?

At 45, 46 now I'm looking for.

46 - 47, sir. 48?

48, 49, give you all a chance. And 50.

With the bids flying in, we leave the auction and rejoin at 64,000.

64,500? Thank you.

64,500, now to you at 65 if you like? No.

At £64,500, at £64,500 then, for the first time...

second time...

third and last time, 64... 65.

65, 65,500...

No. 65 then to you, or half to you if you like.

No. At £65,000 then, for the first time...

second time...third and last time, at £65,000...

-HE BANGS HAMMER

-Well done, sir, your number, please.

After quite a battle, the successful bid goes to Ron.

Ron, who's an optometrist,

has developed a couple of properties before, one of which

he lives in and is just a stone's throw away from this one -

quite literally.

-Ron, good to meet you.

-Hi there.

-Congratulations!

-Thanks very much.

Well, no, you deserve it. Tell me why you wanted to buy this place?

-Well, I just live over the road.

-Oh.

And I thought, "It's nice and easy, just over the road,

"I'll just buy it."

-So that's what happened.

-Are you a property developer then?

Erm, the one I live in over the road,

I did actually buy up as an old museum,

and then I changed it into two houses

and ended up living in one house.

-So it was a previously a museum?

-It was.

-Ah.

So what do you know about this little development?

-Cos it's really cute.

-Very lovely, isn't it?

It was built in 1827 for ironworkers, and they had

a foundry, and then they worked and made the iron and everything here.

-They ran it for about ten years, and then stopped.

-Right.

That's why it's just a few houses, not very many houses.

So was the idea to create almost a model community?

Yeah, it is a model community, it's got a church, a school, a pub...

It's really lovely.

Ron, who's originally from nearby Monmouth, obviously loves

the area, and felt compelled to buy the property

when it came up at auction, although he did get

a slight case of auction fever

and paid a little more than he'd planned.

-Are you happy, in retrospect?

-I am actually. I thought, you know...

It's quite nicely done up,

I've got a major problem with the chimney,

the chimney has got to be taken out and these things called

chimney trays have got to be put in and put back up.

So that's a really major expense.

But apart from that, the house itself is in good nick.

It just needs painting really and a new bathroom,

or maybe the kitchen doing or what have you,

but it's generally, yes, I'm really pleased actually.

-And then obviously we're listed.

-Yes.

So what do you know about Grade II-listed properties?

Well, I have had - because I did the museum over the way -

I have had a lot of interaction with the conservation officer.

And she says, "Yeah, you'll need listed buildings approval,

"but we probably can do it because it's an emergency,

"it's causing a big problem inside the building itself",

so she seemed fairly positive about it.

How much is it going to cost to get that sorted?

I don't know, I'd think six, eight thousand, might be a bit more,

-I'm not sure.

-So what's the timescale?

About six months. Hopefully...

about six months.

At this stage, Ron isn't sure

whether he will rent or sell the property,

but he has identified a budget of £25,000,

including the chimney cost,

with professionals doing the bulk of the work.

And Ron doesn't want to stop at this property.

Buying more in the street or...?

Yeah, I was just thinking, if I kept the other one,

I'd actually probably be able to buy a hotel or build a hotel soon,

so I'd have those two.

There's another one that's a bit derelict,

and they do come up, and I do like them.

Because I know the buildings, I can deal with them

more straightforwardly rather than doing stuff I don't know about.

-Good. Listen, congratulations.

-Thanks very much.

-Well done.

-Thank you.

-And I look forward to seeing how you get on.

Thanks very much.

THEY CHUCKLE

There you go, Ron the optometrist,

not being at all short-sighted,

showing clear vision buying this place,

and the only potential hiccup could be the problems with that chimney.

Hopefully that won't make a SPECTACLE of him. Ooh...

You can find out how he gets on later in the show.

Well, how much work somebody does to a property

really depends on what they are going to use it for.

If it's somewhere to live, well,

that would be different to if somewhere they're going to rent out.

Yeah, so far we've seen one outcome, but what about the other two?

Let's find out.

Back now to south-east London, and the area of Grove Park,

which was home to this two-bed ground-floor flat

with a shared garden.

It had, for London, a low guide price

of just £125,000 plus.

It was a bit of a model property that needed a fair bit of work,

but it appeared to be structurally sound and, as I said,

it had that golden ticket of a shared garden.

However, after a little research,

I soon discovered it had a nasty little secret.

One of the reasons that this flat went to auction was

probably because it has a very short lease of only 56 years.

Not good news, and a costly problem to sort out.

# I don't know what this world is coming to

# I just can't rely on you

# Just can't rely on you... #

The short lease means that you could struggle to get a mortgage, which,

in turn, means the value of the property is significantly affected.

Plus, you're reliant on negotiations with the freeholder

when it comes to renewing said lease.

However, the bidders were not put off on auction day,

with the property selling for 141,000.

Sold to you, sir, at 141.

The successful bidder was Slava, a local furniture maker who had

bought this property with business partner Macin.

This would be Slava's first venture into

property renovation in the UK, and I'm afraid he leapt in feet-first.

Did you have a chance to glance through the legal pack

-at the auction?

-No.

-So you didn't read it?

-No.

Why did you not do that? Did you know about the legal pack?

No, honestly, it was just all too quick, and I thought,

-"Just go for it."

-So you were happy to take a bit of a chance?

Yes, that's right.

Slava was very laid-back

and didn't seem too concerned about that short lease.

He had plans to incorporate his bespoke furniture-making skills

into the project to save on the budget,

which he'd set at just £10,000, with a timescale of only a month.

It's now four-and-a-half months later,

and thanks to work on a neighbouring flat,

Slava's property is somewhat hidden under the scaffolding.

However, stepping in,

we'll find that not everything has gone to plan.

Now, clearly this remains a work in progress,

but what we can see are the beginnings

of a very impressive layout change.

The wall between the kitchen and the former front bedroom has been

removed to create what is going to be a very attractive kitchen/diner.

What was once the living room has now been turned into

a front bedroom, as Slava explains.

So, if you remember, it used to be a living room,

now it's a totally new bedroom with a new flooring, replastered,

new wardrobes to be done, need to hang some doors on it, to finish.

As you can see, new lighting and everything else.

Throughout the property, Slava and Macin have used

their furniture-making skills to great effect,

creating what will be a unique and attractive property.

The bathroom is also yet to be completed, as is the back bedroom.

For the time being, Slava has left the back garden

as it is, preferring to concentrate on the interior.

It's fair to say that this has been a tricky first project for Slava,

with one or two bumps in the road.

There was lots of surprises here,

the flooring was one of the biggest ones.

All of the joists were rotten,

so we had to take them off and put the new ones in,

put the level in and put the new flooring,

so it's new flooring here, everything is new.

All the furniture here is bespoke, everything made by us.

We thought we could re-use some of the old ones,

but we decided to use everything new.

And the kitchen, bathroom units, the wardrobes to be done,

and some units here, all of the shelves, everything pretty much.

Thanks to builders' schedules, and the issues Slava has

already mentioned, the timeframe has gone from

one to four-and-a-half months.

Plus, thanks to the layout change and floor issues, as it stands now

his budget has doubled from £10,000 to around £20,000!

But what I'm dying to know is -

has he been able to extend that lease?

We tried to contact the landlords, we didn't have any luck so far.

Hopefully it's going to change in the next few weeks.

Fingers crossed. If we can extend the lease, we can easily sell it.

It's going to be more chilled for other people.

But if we won't be able to extend it, we can rent it out.

At this point, Slava doesn't seem too concerned

and is forging on with the renovation.

But without that lease extension, does it make financial sense?

As it stands now, including the purchase price,

Slava has invested £161,000.

What did two local estate agents think of this work in progress

and its potential?

The look of the property is excellent, I think

it's exactly what people would want.

It's probably a bit above what people would want in

this area actually, I think it would rent incredibly well,

being this sort of standard, and also sell very well.

The changes made to the property is very, very good.

Different, very modern and very desirable.

Having a short lease on the property is going to have

a detrimental effect to its value, so it's probably going to affect

the value somewhere in the region of £25-30,000.

Wow, that's a very big chunk.

Fingers crossed Slava will be able to track down the landlord

and get that lease extended for a reasonable amount.

Let's hear what the valuations are with and without that extension.

With the current lease as it is, I feel the property is worth

in the region of around £175,000.

With an extended lease,

I believe the property could achieve in the region of around £235,000.

This property valued with a short lease would be

approximately £195,000.

With the lease extended to possibly 125 years, it would

be approximately £230,000, maybe £235,000.

As I thought, a big difference between the valuations,

meaning to make a big profit on his first project,

Slava will need to get that lease extended.

Till then though, he is prepared to rent.

The property would achieve in the region of around £12-13,000

per-calendar-month.

The rental for this property would be approximately

£1,300 per-calendar-month.

That figure of £1,300 per calendar month means Slava's

current investment could create a yield

of just over 9%, but of course,

the property isn't finished just yet, so this may change.

But no doubt it will still be a healthy yield.

So, with Slava nearly done with his first property,

and I'm happy to say, keen to do another one,

what advice would he give any other prospective property developers?

You have to spend more time researching. Preparation, homework.

We head back now to south-east Wales,

and the former model village of Butetown.

Sat within this conservation area

was this three-bed Grade II-listed building.

A beautiful, character-filled house, that was in need of some TLC,

especially when you cast your eyes skywards.

You can see the chimney stack is covered in, well,

plastic and some kind of reinforcing thingymyjob going round it.

What happened was, the chimney became dangerous

and the council had to step in to do the work to repair it.

It says in the legal pack that whoever buys us

has to repay the council the money for those repairs.

But, when they repaired it, they didn't repair it fully,

so you are going to have to do a proper renovation job

on that chimney stack.

Thanks to this being a listed building,

fixing the chimney would not be a straightforward task.

There are all sorts of guidelines

and regulations you must adhere to, and never mind the cost of it!

Despite the chimney problems, plenty of people where interested

on auction day, with a successful bid of £65,000

going to optometrist Ron.

# Oh, if you find the time, please come and stay a while

# In my beautiful neighbourhood

# My neighbourhood, my-my-my-my

# Beautiful neighbourhood. #

To say Ron was a local would be an understatement.

He actually lives across the road.

He was confident of fixing the chimney,

and had plans for a simple renovation scheme

for the rest of the property, with a budget of £25,000

and a timescale of six months.

Well, we've returned eight months later, and the first thing

I notice is that the chimney is still looking

a little worse for wear.

But before we get onto that, let's step inside.

The brand-new kitchen is less cluttered

and well-decorated, with new laminate flooring.

The living room is neutrally decorated,

giving central focus to that charming old fireplace.

Upstairs, and that sloping floor

in the bathroom has been straightened out.

And the bedroom next door no longer shows signs of damp.

Time to see what transformations have occurred on the next floor up.

Where there were once two bedrooms and steep stairs

to a dilapidated attic space,

now stands a lovely double bedroom with en suite.

Ron explains further.

So, as you can see here, it's totally different from before.

We had some stairs here and two rooms here,

the main room here and the other here.

And underneath the stairs was a funny little toilet.

So we got rid of all of that and we got this nice, open space,

ready for people to live in,

and it's got a lovely en suite here, bed would be here,

walk into the thing, have a lovely shower in the beautiful new shower.

It's unusual to reduce a property's bedrooms,

but in this case, Ron felt a bigger bedroom with a good finish

and a lovely en suite was better than two smaller bedrooms.

Plus, creating a hatch leading to storage space in the loft

is a good bit of rejigging.

Outside, the garden has been fenced off and tidied up,

with the back here being given a lick of paint.

But what about that chimney?

I was going to do that, but it was very expensive, about £10,000,

and it has been repaired by putting a tarpaulin over it,

which looks awful, but there is going to be a grant,

I hope, in this area for these lovely houses to be redone

in Welsh slate and all the chimneys will be repaired.

Because all of them suffer from this leaking problem.

My house also has the problem,

so I knew about it and I also knew that there was this grant

coming up, so we're all keeping our fingers crossed that it will occur.

Whether it does, I don't know.

Contrary to what he originally planned,

Ron did a lot of the work himself,

including creating secondary glazing on the sash windows.

But, due to some delays in getting tradesman in

for the more skilled jobs,

his timescale went from six months to over eight.

However, has his DIY-ing

and delay on chimney repairs kept down his original budget of 25,000?

It cost about 18 grand without the chimney.

So taking the ten grand out for the chimney, which was how much

I got estimates for, I'm over, and that's not including the legal fees.

Ron also had to repay the council for the work they did on

the chimney, which amounted to £1,200,

making the total spend here 84,200.

Will two local estate agents think it's a wise investment?

I think it's a lovely property.

They've done a good level of work here, kept it in keeping,

it's all fairly straightforward, the classic sort of blank canvas.

I particularly like the addition of an en-suite, I think

that's very desirable, especially as it's going to aim towards

a young couple, that's the sort of thing they'd be looking for.

I also think the renovation is very sympathetic

and it's been done to a very high standard.

With the agents impressed and Ron renting at least until

the chimney is fixed, it will be interesting

to hear their valuations. Rental first.

I'd be looking to market this at about £500 per-calendar-month.

It would rent for about £500 per-calendar-month.

When we first came to the property around eight months ago,

the agent then predicted a rental income of around

£450 per-calendar-month, which was for

the original configuration of a three-bed house.

So, reducing it to a two-bed property hasn't actually

lowered the rental income.

Indeed, as it stands now, Ron could command a yield of over 7%.

However, if he does have to spend £10,000 on the chimney repairs,

that yield will drop to just over 6%.

So, fingers crossed for that government grant.

That's rental, how about resale?

I would value this somewhere between

£100,000 and £110,000.

And look to achieve probably over £105,000.

I think if this property were marketed on

the open market at the moment,

it would sell for between £110,000 and £125,000.

The estate agents are divided, meaning, with his current spend,

Ron could be looking at a pre-tax profit of between

£25,000 and nearly £36,000,

if you take the top valuations.

But of course, those profits all depend

on the future of the chimney,

and the chances of the government grant being agreed.

So is he confident?

It's supposed to happen in 2016.

I suppose I am 80% confident.

If you're thinking about visiting a property auction,

hopefully we have given you food for thought.

Yes, but even if you're not, there is

a way for you to enjoy some auction action.

And that is to join us for more Homes Under the Hammer next time.

-See you then.

-Goodbye.

-Goodbye.