Episode 49 Homes Under the Hammer

Hello, and welcome to the show.

Now, it's hard to predict when to invest,

but property prices are on the up in certain parts of the country,

so now could be the time.

Yes, correct, Martin,

but be aware that your well-earned savings might not

stretch as far as they used to.

So if you want to get yourself a good deal,

why not buy under the hammer?

So, are you tempted to head to your local auction room

and see what might be on offer?

That's exactly what the buyers on today's show did.

I wonder what they came away with.

Let's find out.

The buyer of this Carlisle terraced house isn't letting

lack of experience get in his way.

Well, I've bought a book on plumbing,

so hopefully I'll be able to do a little bit of that.

I read up about the history of this three-bed house in Derbyshire.

£2,011 to have this house built in 1954.

With time travel not yet an option,

I head out to East London in search of a bargain.

What you do have with this property is a fantastic

blank canvas to work with.

All these properties have been sold at auction.

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

when they went under the hammer.

Well done, sir.

We head now to what's been nicknamed the Great Border City,

and is better known to you and I as Carlisle in Cumbria.

Wherever you walk in Carlisle,

you really get the sense that you're walking in the footsteps of

countless generations - medieval, workers, Roman soldiers,

Jacobite rebels and countless ordinary people

who've occupied and lived in this beautiful border city over the years.

One such former resident, albeit a reluctant one,

was Mary, Queen of Scots.

She was imprisoned here in Carlisle Castle,

which sits in the city centre, and is over 900 years old.

# Please release me,

# Let me go... #

Well, not far from the city centre,

close to the Cumberland Infirmary,

is the property I'm here to see,

but before I get into it,

good to notice that some of the neighbouring properties

are having refurbishment work done on them.

That really does give you an indication that, you know,

people round here are caring for their properties,

and that means that the whole neighbourhood can only go in

one direction and that's up.

But, this is the house.

It's a two bed mid-terrace at a guide price of £14,000-plus.

Let's have a look.

So, a fairly classic layout.

Squeaky door.

Straight off the street into your front lounge.

Erm...

A quick glance around...

It doesn't look to be in too bad a condition.

Obviously needs a bit of modernisation, but, yeah...

It looks OK. A few bits and pieces going on with the wall here.

Um...

Hmm...that's a bit strange.

Then through into the kitchen. Now, this is odd.

This is really odd, cos the kitchen is narrower...

..than the rest of the house,

so what's over there?

Don't know.

Better find out...I suppose. Hmm.

What I'm about to discover is that some people can squeeze

a bathroom into just about any space.

Well, you know...that's a first.

Halfway up the stairs to the bedrooms,

there's a little landing and then you step into the bathroom.

Wow.

I mean, in a property like this, you might have expected the bathroom

to be out the back, an extension to the kitchen or whatever...

Maybe upstairs in a part of the bedroom, but here?

Really?

No. Not at all. Bad.

# You know I'm bad, I'm bad,

# Really, really bad... #

Yes, you see a lot of strange layout choices in this job,

and this one is right up there with the best of them.

If I have my positive hat on, though,

whoever buys this could extend into the back,

where there is a nice little yard and, very handily, a car port.

Or heading upstairs to the two good-sized bedrooms,

you could take some space from up here and create a small bathroom.

The important thing, though, is to keep an eye on your budget.

If you're in it to make money, properties in this area do have a ceiling price.

We asked an agent from the auction house who sold it

for her opinion on this property, guided at £40,000 plus.

It certainly has a lot of potential.

You could either leave the layout as it is,

and just renovate throughout to a good standard,

or you could look to extend the kitchen

and take the bathroom upstairs.

And what kind of values are we looking at?

Let's start with rental.

Rental will probably vary between £400 and £450 per calendar month,

depending on what alterations were done.

And what about the sales market?

Sales value, keeping the property in its current layout,

done up to a good condition,

it could be worth in the region of £80,000.

With the property extended to include a larger kitchen

and a first-floor bathroom, you could look to achieve towards £90,000.

Well, a few things to sort out with this one -

not least the bathroom on the stairs.

But a bit of internal jiggery-pokery

and it could be a really pleasant little property.

Yeah, a good one to go for.

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

Two-bedroomed terraced house, gas central heating,

new PVC double glazing.

Where shall we start - 40?

At 40, am I bid?

35?

Start me. 35 here, back row.

At £35,000, I'm bid, then.

In ones, nice and easy.

36 here.

37 there.

Where's a bid?

37 here. 38.

39 seated. Just beat you to it.

39 - concentrating on these two at the moment.

At 39,000, back row.

40.

One.

Two. Three. Four.

Five. Six. Seven.

Eight. Nine.

Shake of the head.

With you at 48.

49. 50. One. Two.

53?

53 I'm bid. Four.

55.

55, 56, 57,

eight.

With you at £57,000.

Half I've got.

58. Half.

Shake of the head.

With you at £58,000.

Here to sell in the room.

At £58,000.

Are we done and out?

At £58,000 then, first time.

Second time at 58. Are we all done?

Selling away, then.

Are you sure?

Well done, sir.

So, after a battle amongst the bidders,

the property eventually sold for £58,000 -

£18,000 over the guide price -

to first-time buyer Stephen,

who is a joiner by trade,

and has helped friends in the past renovate properties.

But this will be his first solo venture.

I met him back at the house to find out his plans.

-Stephen, good to meet you.

-Nice to meet you.

-Congratulations.

Tell me why you wanted to buy this house.

-Mainly because it never had an extension on the back.

-OK.

So it's quite handy.

I haven't got to knock an existing one down to put the next one on.

-You bought it because it DIDN'T have an extension?

-Yes.

-Oh, right.

Some of them you see have got flat roofs and they look terrible.

Some of them are long and a stupid shape.

Not very good for a kitchen.

So I'd like to extend the kitchen out,

-and I haven't got to knock an old extension down.

-OK.

Makes perfect sense. What prompted you to do it now?

Erm... I'm at that age when I need to buy a house, you know.

Saved up for a while.

-How old are you?

-23.

OK, good.

-Starting nice and young, then.

-Yes.

And it's a house to do what with, then?

Hopefully, do up and sell, if it's worth...

-a good amount of money when I come to sell it.

-Right.

-Either that or keep it and move in. Not sure yet.

-OK.

So that's another plan. You wouldn't rent it out -

-you'd do it up or you'd live in it yourself?

-Yeah.

What about the whole bathroom-on-the-stairs thing?

-That's all getting knocked through to the kitchen.

-Oh.

It's going to be a big kitchen/diner

- almost like another living room with the kitchen.

And what's going to happen to the stairs?

That door's going to get blocked off,

and it will carry on as normal, you know?

And what are you going to do with the bathroom? Where's it going?

-Bathroom's going to go upstairs.

-How will you squeeze that in?

I've got a cupboard in one of the bedrooms,

probably fit the bath in there -

-block off part of the bedroom.

-Right.

-So...

I'm hoping that will work.

# Upside down

# Boy, you turn me

# Inside out

# And round and round. #

'Sounds like Stephen has some pretty big plans for this property.

'He will just need to make sure

'that he doesn't compromise

'those bedrooms too much.

'Plus he'll want to keep an eye on his budget,

'otherwise he could exceed what the property is worth.'

And the plans for the back, then - tell me more about that.

The back... Extension of 2.4.

Knock it through.

-Single-storey?

-Yeah. A lean-to extension.

The back garden I'm not entirely sure yet.

Depends how much damage is caused

-with all the materials being there and stuff.

-Yeah, for sure.

So how much of the work are you going to do yourself?

-As much as I can.

-What do you do?

Well, I've bought a book on plumbing,

so, hopefully, I'll be able to do a bit of that.

-You've bought a book on plumbing! Brilliant!

-Best time to try.

Do all the joinery,

a little bit of brickwork. I do brickie, as well.

-Right.

-That'll be a hand.

-I won't touch electrics.

-No.

I don't fancy that.

-Don't touch plastering, either.

-No. It's a bit of a dark art.

Are you going to do it on your own, apart from those things,

or have you got family members helping you out?

Yeah, I'll try and help other tradesmen out,

-and then they can help me out, hopefully.

-Right.

Just finding the right tradesmen who's needing a joiner.

Oh, I see, so you're going to barter your skills?

Yes, hopefully.

Good idea!

"I'll do you some joists and floorboards

-"if you come and put in my electrics."

-Yes, exactly.

-Great idea!

-Yeah.

That's a brilliant plan.

So, what is the budget?

£8,000-£10,000.

That's just materials. Not including my labour, obviously.

Right. OK. And what about timescale?

Timescale depends on the money, again.

As long as I have enough money to do it, it'll be six month-ish.

If I run out of money...obviously,

it'll take longer to get the funds together

to buy the materials to do the work.

# If you'll scratch my

# Back!

# Then I'll scratch your

# Back!

# Like two peas in a

# Pack!

# Let's get rid of our itch together...#

I'm all shook up.

Stephen's plans to call in a few favours

and to trade jobs is a great way

to keep costs down and achieve maximum potential.

He's certainly got his head screwed on.

Any idea what it might be worth to resell?

I'm hoping as long as it's worth about 80, maybe a bit more,

then I'll be happy with that. It's still a profit.

-And then move that money into the next project?

-Yeah.

I'd like a holiday.

Not had a holiday for two years.

I could do with one of them. Erm...

-So, where would you go?

-America.

-I quite fancy America.

-Oh, wow.

So you'd use the profits to travel?

-Yeah, take my girlfriend away.

-Right. Does she know?

No, not yet. She will do soon, but...

HE LAUGHS

-Well, congratulations, and good luck with it.

-Thank you very much.

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

-Thank you.

Well, I think Stephen's got himself a nice little project here

for his first property investment.

Work to be done, yes.

The extension - good idea.

Certainly, moving the bathroom.

How will he get on? You can find out later in the show.

We head now to Long Eaton...

..a thriving town that sits between its bigger neighbours

Nottingham and Derby, making it ideal

for commuters that are looking for more affordable housing.

In the catalogue, the property I'm here to see

has a guide of £135,000,

plus it's a three-bed, detached property

and in the catalogue it also says

"modern kitchen, modern bathroom, cosmetic upgrade."

Is it going to be that simple? Let's take a look.

Well, the outside looks in good shape,

plus you've got this garage and a little driveway -

so possibly room for two cars.

A detached three-bed property with a garage?

Yes, please!

Right, straight into...

Oh, really nice bright hallway area.

Just drop my catalogue there.

Stairs going up to the bedrooms,

central heating - always a good sign.

Reception room one

with an old-fashioned really chunky fireplace.

Possibly call that retro nowadays.

Through into reception room two - but there's the modern kitchen,

which looks in good condition.

But it's this flooring - in the hallway

and in the reception room one,

parquet flooring.

Can really be a feature,

just give it a bit of a polish

and it really can set off a room,

whether it's in the front room or this room.

You've got double doors going out into the back garden, as well.

So far, from what I've seen,

I'm happy with it.

# You-hoo-hoo

# Well, you're makin' me happy, baby

# So, so, so happy, baby

# Just for bein' my girl. #

What's not to like?

Yes, the gas fires won't be everyone's cup of tea,

but look at that lovely kitchen.

Plus, all that parquet flooring will really get the buyers interested.

The two reception rooms might need a bit of paint,

but, really, this place is in great shape.

Upstairs there's three bedrooms.

The first one there seems to be a decent size.

It's got built-in wardrobes and cupboards at the top.

Bathroom.

Good condition. Which is nice.

Box bedroom just through there.

And the third bedroom, here.

Again, nice and bright,

big window, lots of floor space -

you can get two singles in here, or even a double bed,

and a wardrobe - not a problem.

And this house comes with an intriguing added extra -

a folder full of information all about it.

Have a look at this.

This is a letter for a quotation

for the build of this house.

£2,011

to have this house built back in 1954.

That's incredible.

And it gets even better.

There's a letter here

to purchase the land that this house was built on

would have cost you £210

back in 1953.

I'll have two, please.

That folder had actually been

left by the previous owner for the new buyer.

A handy addition to the legal pack on auction day.

But returning to the present day,

and out the back you've got a really nice

walled garden complete with outside toilet

and a very useful shed.

Plus you've got access to the garage

which is a great size and could either serve as a carport

or maybe a workshop of some kind,

although it does unfortunately have an asbestos roof,

and sooner or later that's going to have to be dealt with

by professionals.

All in all, you're getting a lot of house

for that 135,000-plus guide price,

and it's in great condition.

Let's find out if a local estate agent

is impressed with this property, as well.

It's a nice property.

It's got great potential.

It has the key ingredients -

nice kitchen, bathroom,

gas central heating, double glazing,

it just needs a lick of paint,

cosmetic improvement, upgrading.

So the agent likes the property, too.

What kind of figures does he think

it will achieve once it's renovated?

You'd look to put this on the market

within the region of £170,000 to £180,000.

With regards to rental, once fully completed and modernised,

you're looking to rent this property within the region of £650-£700

per calendar month.

This property is what I hoped it would be when I was approaching it.

A little bit to be done on the inside,

and a little bit to be done on the outside.

To me it appears to be pretty straightforward.

Let's see who fancied an easy time turning this around

when it went under the hammer.

Three-bedroom detached house with attached garage.

Guide price on this has had to be raised to 148.

148, up from 135.

So, in this case the guide price was raised.

If the reserve price changes,

so does the guide price.

As it is usually within 10% of the reserve.

£140,000 is the opening bid.

141 somewhere else.

140 is my starter.

141. 141. 142.

The bidding was a bit slow getting going,

so we rejoin at 150,000.

150 and one.

52.

152? I'll take the half.

152 and a half. 153.

And a half. 154.

And a half.

155.

And a half.

Against you at 155.

Bid is here.

£155,000.

All done?

£155,000 once?

Twice? Third time.

-BANGS GAVEL

-Sold at 155, thank you.

The successful bid of £155,000

went to local man Chris.

Chris who lives and works as a gardener in the local college,

has had his eye on this property for some time.

He already tried to buy it in 2010,

when it came up for auction but he was priced out

when it sold for £182,500.

This time, though, he's got his green fingers on it

and I'm looking forward to finding out his plans.

# I'm the man in your garden I'm the man grows the fruit...#

Chris, nice to meet you. Congratulations.

Thank you, Dion. Thank you very much.

Tell us what you're going to do to this house.

Your story is a little bit different to most.

Well, I bought the house, erm...

in order to rent it out for a couple of years,

and then after two years I'll be retiring,

and that means I've got to leave the property I'm in

and I'll have to have somewhere to live.

So, with the house prices going up the way they are,

I've been looking for the last two or three years,

and, stupidly, I've watched them go up.

And my savings haven't actually kept up!

So, I finally looked at this one,

and I looked round it at the viewing and I thought,

"Well, I can't afford this. No way."

And the estate agent said to me,

"Give it a go."

He says, "You never know. There isn't much interest in this one."

And he was right. There wasn't a lot of interest in it.

And at 155,000,

hammer went down and I'd got it!

So the people around me, you know,

were saying, "Congratulations."

They must've seen it on me,

I was starting to get a bit fidgety by then,

and the lady comes, picks me up,

takes me from my seat to sign for it,

so I goes and sits down and I picks the pen up -

and this has never happened in my life -

I picks the pen up and I'm like that...

And I didn't even know it!

I had to concentrate to sign my name!

# And I'm trembling...

# That's right, you got me shakin'...#

Well, sign it he eventually did,

and he's clearly delighted.

Chris's job at the local college comes with an on-site house,

and he's been living happily there for 26 years.

But with retirement, comes inevitable change,

so what does Chris have planned for his new house?

Hopefully, after a couple of years, I shall leave the property

that goes with my job at the moment

and then I shall move into here.

What are you going to do to the back garden?

And what are you going to do in here for rental purposes?

For rental purposes,

this is a redecorate.

Possibly varnish the floors.

New boiler, possibly.

And I think that, really...

I mean, even the light shades have been left.

So, for here, that's really it.

Now, outside,

erm, the fruit trees - they're

looking a bit past their sell-by date.

So I will possibly fell them

and clean them out,

and, really, that's about all.

That's for the rental purposes.

OK, for yourself?

For myself, in a couple of years' time,

money permitting, it'll be block-pave the front garden,

which is about 80 square metres.

A new staircase, which I like in natural wood.

I don't know whether I shall be taking this wall down

and making a kitchen/diner.

New bathroom.

Obviously, new doors on the garage.

To complement the block paving.

So the front will look nice.

And then anything else that's necessary.

To get this property ready for rental, Chris hopes to spend

no more than £5,000,

and he's keen to get it all done

in around four to six weeks.

But, really, he's looking forward to two years' time.

You must be excited, Chris,

because a lot of the times

we actually speak to developers that do it up and rent them out,

or they do them up and sell them.

You've actually bought a property for yourself.

-It's going to be your home.

-That's right.

-In two, two-and-a-half years' time.

It is going to be a long two years, isn't it?

Waiting to get hold of it.

To actually get in a chair, in here, is going to be fantastic.

-Would it be a cup of tea, or will it be a beer?

-Erm...

This is very cruel, this is...

Beer gives me a headache, these days.

It gives most people a headache!

I used to love a drink, but I...I'll probably try one.

Yes. Yes.

I think you picked a really nice house to be a really nice home.

-Good luck, Chris.

-Thank you very much, Dion.

-Hope it goes well.

Thank you. Very good of you.

I've got a good feeling about this house,

and Chris is a really nice bloke.

Having worked so hard for so long as a gardener,

he's found a property that he wants to make his home.

How will he do?

I think he'll be bang on.

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

Still to come, I find an old friend in East Ham.

It's been about eight years.

It has been eight years, yes.

-We have aged, both of us.

-Speak for yourself!

HE LAUGHS

And in Long Eaton, Chris still can't believe his good fortune.

The whole thing, is a dream.

And it's come true.

But first, it's back to Cumbria and the border city of Carlisle.

Earlier on I took a look around this two-bed, mid-terrace property

that had a guide price of £40,000 plus.

Now, you know me, I love a mid-terrace,

but this one had me scratching my head.

Well, you know, that's a first.

Halfway up the stairs to the bedrooms,

there's a little landing

and you step into the bathroom.

Really? No.

Not at all bad(!)

Urgh!

# No, no, no, no

# Oh, no, no, I don't like it like that

# Oh, no, I don't like it like that

# It ain't like that. #

Because the bathroom had been squeezed in there,

it made the kitchen a lot smaller.

However, turning my frown upside down,

was the obvious potential in this property,

particularly for an extension into the back yard.

On auction day there were plenty of people

who saw the potential,

where it was eventually sold for £58,000

to property-novice Stephen.

Well done, sir.

Local joiner Stephen was eager

to get on the property ladder

and had a cunning plan to keep his costs down.

I'll try and help other tradesmen out and then they can help me out.

-Hopefully.

-Right.

Just finding the right tradesman, who's needing a joiner.

-Oh, so you're going to barter your skills?

-Yes. Hopefully.

Good idea.

Stephen planned to add an extension to the property at the back

and move the bathroom upstairs as well as

a total refurbishment - all within a budget of £8,000 to £10,000

and a timescale of around six months.

Well, it's now 10 months later

and we've returned to Cumbria to see

if Stephen's first property venture

has been a successful one.

Wow, wow, wow!

This property is almost unrecognisable and that kitchen -

I'm a little blown away.

So, this is the kitchen.

Still a few little things to do but behind me there was

the old kitchen and the old bathroom

with a wall between them.

I knocked the wall out,

knocked this wall out with a steel RSJ to hold up the back of the house

and a big extension to make the room a bit bigger.

What a result!

This extension looks fantastic.

He's managed to fit the bathroom upstairs

by pinching some space from the back bedroom.

This was dated and badly laid out

but Stephen has managed to create a modern and desirable property.

He's got new walls, flooring, plumbing,

electrics and it's all the more impressive

when you consider that this is his first renovation project.

Altogether I'd sum up the experience as being rather hard work,

a lot of persistence and just trying to get it finished.

Trying to find time to get it finished

was probably one of the harder parts of it.

But, yes, it's gone OK.

A lot of the work was me.

I've had help from family and friends.

My dad is a builder so he's been giving me a hand.

I'm friends with a roofer who put the roof on for me.

So I've had a lot of help from different people so it's been good.

Left to do is a bit of painting, finishing off.

A little bit of joinery work.

The kitchen still needs a few touches done.

Carpet down the stairs and the back garden needs finished as well.

Juggling his joinery work

and this renovation has meant that Stephen has gone over

his timescale of six months, with the project taking closer to 11.

But what about his £8-£10,000 budget?

I've slightly gone over budget, unfortunately.

I think it's been around £13,000-ish on materials,

just due to it needing all replastered,

re-plasterboarded, insulated and damp proofing done.

When I first came to look at the house, it looked pretty OK.

It didn't look too much of a job

and then once I started taking it to bits,

I realised there was damp and plaster falling off the walls

so maybe I will have better luck next time and I have learned more

about electrics and plumbing, which has been a rather good experience.

First-time projects are always a learning curve

but with Stephen eager to sell, it will be interesting to hear

if he has made a profit on his investment of £71,000.

Time to get those all-important valuations and of course,

opinions from two local estate agents.

Starting with the agent who saw it originally.

This is my second visit to this property and on first impressions,

I'm really impressed by the amount of work that he has achieved.

The new layout works really well.

The bathroom upstairs,

he's managed to fit a bath and a shower in such a small space.

It works really well.

The downstairs gives extra living space, dining, kitchen.

It makes it a lot different to other terraced properties on the market.

The improvements Stephen has made are a hit with the agents

but will their valuations reflect that?

Let's hear the rental potential first.

Rental figures for this property would be in the region

of £425 per calendar month.

For the rental market, I value this property

at £425 per calendar month.

That figure of £425 would produce a yield of just over 7%,

which is a healthy percentage but Stephen is keen on selling.

If I was to put this property on the market for sale,

I would value it at £85,000 to £90,000.

I would recommend an asking price in the region of £90,000 to

achieve a figure somewhere between 85 and £90,000.

I think that value is quite good, yeah. I'm happy with that.

I was hoping around the 85 mark.

So yeah, 85 to 90 seems good to me.

He has every right to be pleased.

If he did achieve 85,000,

that would mean a pre-tax profit of £14,000, which is a nice result,

considering this is his first venture into property renovation.

So, with this one all but done, will he be doing it again?

I'd buy again at auction, definitely.

I'd buy another house eventually.

Have a bit of a break, a holiday in between

would be quite nice.

The girlfriend will be coming on holiday with me.

I've promised to treat her, since she's been rather good with me

working a lot and not seeing her as much.

Welcome to East Ham in London.

A popular place for investors, thanks to its road

and rail links to Central London, not to mention you get a bit

more property for your money in these parts.

Now, an average of £250,000 might not sound all that cheap to

those of you who live outside of London,

but compared with the average property

price of the city as a whole being around £500,000,

you definitely get more for your money here in East Ham.

# More, more, more

# How do you like it? #

Well, this is a fairly standard road for East Ham.

Victorian terraced houses along a pretty tree-lined street.

Really pleasant.

Now, the guide price for the property I'm here to see was

less than the East Ham average at £140,000 plus.

So, what do you get for that?

A one bedroom first floor flat - that's what you get.

Before I see what we've got this time,

there's a nice little bonus with this property.

There's still another 180 years left on its lease.

I do feel quite confident about this property

because I like these period conversions.

Now, so far, it is a bit of a mass of magnolia and woodchip,

but I'm looking beyond that.

I mean, it really is spacious, it's got wonderful ceiling height, got a

nice big bedroom behind, a bathroom just here, this little hallway.

It just feels roomy. And I really like that. Got another...

Oh, it's a kitchen! So quite a spacious kitchen through there.

And through here, right at the front of the property is the lounge.

Now, I'm really pleased because it's spacious,

but for one of these conversions,

a bit disappointing there's no character,

so I'd probably like to put some of the character features back in.

You could start with some cornicing up there,

maybe a ceiling rose, maybe a little mantelpiece and a fire over here.

Another thing to think about, you haven't got double glazed windows,

but these are absolutely gorgeous traditional sashes

and once you've painted them, they will look fantastic.

So you can certainly add some character, but what you do

have with this property is a fantastic blank canvas to work with.

Of course, you don't have to do all those jobs, but adding character

could really make this bright and airy flat so much more appealing.

In fact, it really is so spacious, it gives me an idea.

Open-plan kitchen-lounges are often popular these days,

but would it work here?

So, you could push this wall back here to make this lounge bigger

and then you could put your kitchen units all along the back here.

It would make this lounge feel a little bit smaller,

but I think in this case, it would work.

And perhaps more importantly, this old kitchen...

Well, it could then become bedroom number two.

Now, my thinking is an extra bedroom would mean extra money,

perhaps taking you closer to that East Ham average property price.

But just remember, before you start knocking down walls,

you will need to get permission from the freeholder of the building,

but if you do, I think adding a bedroom might be quite

straightforward and I don't think there's any doubt it could

add value to both rental and sales valuations.

We've asked along a local estate agent to see what his thoughts

are on this one bed first floor flat, guided at £140,000.

I think there's plenty of renovation needs

to be done in the property, for refurbishment,

in terms of kitchen, bathroom, redecoration.

I think the option to turn it into a two bed is definitely

something that stands out for me. A big open-plan lounge at the front.

For me, I'd put the kitchen into there,

separating it off and giving a kitchen-lounge at the front.

Therefore, we'd have a second bedroom. I think it's ideal for that opportunity.

Yes, what is it they say about great minds again?

I'm eager to hear what he thinks the valuations could be,

but first, how much does he think the work here could cost?

I think in terms of cost for the renovation, you're going to be

looking somewhere in the region of around about £15,000 to

20,000 to do a fairly decent job.

Good to keep those figures in mind for the valuations.

One bed rental first.

As a rental property, we'd be looking to achieve

somewhere in the region of about £950 to £1,000 per calendar month.

And what about if it was a two bed property?

As a rental property, we'd be looking at a value

of around about £1,100 to £1,200 per calendar month.

And how do resale valuations compare?

As a one-bedroom flat, the resale value of this

property would be around about £190,000 to £200,000.

As a two bedroom property, as a resale value, we'd be

looking at somewhere in the region of around £230,000 to £250,000.

So, as far as property renovations go, on face value,

this seems like a fairly straightforward one,

but if you wanted to take it further, you could

think about changing the layout and having that second bedroom here.

So who saw this flat's potential?

Let's head to the auction and find out?

Self-contained first floor flat, nice Victorian building.

Four phone bids here.

It's a popular one, so let's get started.

Ladies and gentlemen, lot six. Do you want to start me at 140?

140 at the back. Thank you. In the blue sweater.

140, I am bid. 145 now.

140,000, I am bid then.

Right. Gentleman there with the scarf. 145.

Lady on the wall. Thank you. 150 now. 55, sir?

55. 60. 65.

After a little bit of a slow start, the bidding picks up

and we rejoin at 175,000.

75.

Raise your hand if you are bidding.

Thank you. 175. 775? 775.

80?

182,500?

182,500?

OK, have a think. 182,500, you, sir, standing there?

Behind the seats.

182,500. Anybody else?

Against you, sitting down on the left.

East Ham. For the first time at 182,500.

Second time at 182,500.

Anybody else?

Third and final time. Bid's here. East Ham.

At 182,500. Standing...

-We're done.

-BANGS GAVEL

You sir, thank you. At £182,500.

The successful bid of £182,500 belonged to a familiar face.

We first met Mohammed way back in 2008

when he bought a flat in Poplar.

He was and still is a property developer for himself

and for clients.

I was looking forward to finding out what the plans were here,

but we didn't get off to the best of starts.

Mohammed, it's great to see you again.

It's been about eight years since I last saw you.

It has been eight years, yes. We have aged, both of us.

-Speak for yourself!

-HE LAUGHS

We're not keeping that bit in!

Take two, I think!

-Mohammed, congratulations. We meet again.

-We do indeed.

It's been eight years.

-Eight years since I last interviewed you for the programme.

-Indeed.

So, what have you been doing over the last eight years?

Well, we've been continuing in the property acquisition,

refurbishment and development business.

So, have you bought this flat for yourself or on behalf of somebody else?

No, this has been bought on behalf of a client of ours.

We got the remit to purchase at auction a property that we

could add value to.

And for the client to make some money on.

So you paid a little bit over the guide price.

Where do you think you can add value in a property like this?

I think when we saw this property,

the layout is of a one bedroom accommodation,

but it is a large one bedroom and it lends itself to converting into

a two bedroom with an additional en suite in the master bedroom as well.

So, eventually, it is going to become a two bedroom,

two bathroom apartment and that's where the value will be added.

So, where are you going to be doing that? Which wall are you going to bring down?

Where are you going to add that extra bedroom?

Right. This kitchen wall, that parts the living room,

it's going to be knocked towards the kitchen.

And the room where we are standing now, which is a kitchen,

is going to become a second bedroom...

Ah.

And in the master bedroom, we are

going to create an en-suite shower room.

OK, I can totally see that this would be an ideal bedroom,

you're going to move this wall back a little bit.

Where's the en-suite bathroom going to go in the master bedroom?

Where the boiler is at the moment, that boiler is going to be

relocated into the living room, where the kitchen will be, as well.

So where the current boiler is, along the wall,

is where the en-suite shower room is going to come

and it will still allow for a double room with an en-suite.

# This is what you want

# How you want, when you want it

# The time you want it

# That's a good idea.

# It is, babe

# It's a good idea... #

Well, Mohammed might have a little bit of work to do on his charm

skills but he certainly knows his stuff

when it comes to renovating properties.

No time for a sit down, Mohammed, we've got things to discuss.

So tell me about the budget you've got to do such works?

The budget we have from the client is around 15,000.

OK, can you manage to get it all in for that amount?

Yes, I mean, that's what we've told the client and we will push

for that to do it within the £15,000 budget and I think it's doable.

And then what happens next? Do you sell it, do you put it up to rent?

Yes, the client would like to sell it on

so that they can move on to other projects.

-So you really do need to make sure you sell this at a profit?

-Yes.

-Or your client's not going to be happy.

-They won't.

-You won't have done your job properly.

-I won't be happy either.

So who comes in and does the work for you, your same team of guys you've always used?

Yes, I've got a good friend, a builder.

-Yeah.

-And he does all my building works these days.

It's going to be a good job so that

when you come back you will be purring with excitement.

-All for £15,00?

-All for 15,000.

Can I get your friend's number, please.

How long is it going to take him to do the work?

We're hoping that it can be done within six weeks

but we are allowing a further two weeks contingency.

Mohammed, it sounds like a perfect scenario, all the way round.

I'm hoping so too.

Just let me into a little secret, how much do you think it's

going to be worth once you've done all the work to it?

I've a feeling this will be worth around 240,000

when the works are completed.

Is that enough of a profit for you and your partner?

Yes, it is for six to eight weeks work, I think that is

a good return for the client.

I'm really excited to see the outcome. Congratulations, well done.

-Lovely to see you again.

-Thank you.

Well, I'm pleased to hear that all is still going well for Mohammed

since I last saw him and with ten years' property experience

under his belt, this seems like a simple renovation.

He is so relaxed and chilled about everything but will there be

enough profit to satisfy his client at the end of it all?

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

That's one property down but there's still two more to go.

How do you think the buyers have got on?

Will there be big changes or do you think the improvements will be

really hard to see?

Well, I think it's time we had a look.

Time to head back to Derbyshire now and that popular town of Long Eaton.

It was here I looked around this three-bedroomed detached property,

complete with a good-sized garage

and the lovely big, back garden with its own shed.

Now the guide price originally of £135,000 plus,

which was raised on auction day to 148,000 and no wonder.

Venturing inside, I discovered a property that, despite the need

of some modernising here and there, was in really good shape.

You've got double doors going out into the back garden as well

which are bringing lots of light in.

So far, what I've seen, I'm happy with.

# You're just too good to be true

# Can't take my eyes off of you... #

This was one of those rare occasions where there didn't seem to be

any hidden nasties for me to find.

It was bought on auction day for £155,000 by local man, Chris.

With retirement looming,

gardener Chris had been looking to find a property for himself for

almost three years

but when he found this property he didn't fancy his chances.

I looked around it at the viewing and thought,

"Well, I can't afford this. No way."

And the estate agent said to me, "Give it a go,

"you never know, there isn't much interest in this one."

I thought, well, I'll go and set it all up and go to the auction

and he was right, there wasn't a lot of interest in this one.

Chris had happily worked as a gardener at the local college

for the past 26 years where he also lived.

A house came with his job so for this property he planned to rent it

out for two years after which he'd move into it himself.

He hoped that getting a house ready for rental would be

straightforward, cost no more than £5,000

and take around four to six weeks.

We're back just over 12 weeks later and, as you can see,

a good start has been made in the front garden.

The walls have been given a lick of paint

and the parquet flooring has been cleaned,

buffed and slightly lightened.

In the second reception room, in place of the old gas fire,

is a lovely wood burner, which is a great little feature.

I never expected to see big changes here.

Chris was always planning to get the property ready for rental with

a simple makeover but the work he has done, he has done well.

It should come as no surprise that green fingered Chris's biggest

changes have actually come in the back garden.

As you can see, we've removed the conifers

and the pear tree from this end of the garden,

plus the row of apple trees at the bottom of the garden,

roots and all.

The main loss from this is the loss of birdlife in the garden

but I will replant everything to a better standard.

There speaks an experienced gardener.

Chris has done what needed to be done,

plus he's also added a new boiler.

I'm happy to report that before he'd even had time to finish, his

estate agent had found him a family wanting to move in straightaway.

I'm very relaxed about it being rented.

You know, which is a very big bonus.

The whole process right from the auction to the solicitors to

everybody that's been involved, I'd just like to say thank you

because they have all been marvellous.

The whole thing is a dream and it's come true.

Great to hear that Chris is living the dream

but are his plans the same?

Is he still moving in in two years?

Yes, the plan is this is my home.

You know, I mean, this is more than I could ever have dreamed

of owning, or moving into.

So it's not going anywhere.

# Come on over to my house, baby

# Nobody home but me... #

Chris is delighted and so he should be.

He had spent a little more than he had planned with his budget,

including taxes and fees, coming in at around £8,000.

That's despite just needing to give the bathroom a good clean

and limiting the work in the kitchen, just changing a few sockets.

However, don't forget he did get a brand-new boiler in for his tenants.

It's clear Chris has no intention of selling this property

but it will still be interesting to hear if he's added any value

and if he's reached his rental potential.

We've invited two local estate agents to tell us

their thoughts, starting with the agent who saw it originally.

This property will appeal to a second time purchaser, small

family that's upsizing but then you've also got

the investment markets, so you have the potential.

There is a strong rental demand for this kind of property.

This is the first time I've been inside.

I understand it's been redecorated and done to a neutral condition.

The flooring has been improved and that's a nice feature of the house.

The kitchen was already modernised,

I understand, and that still shows very well.

The garden, I understand, has now been cleared

and it is a very large garden which you now can appreciate.

I think the major selling feature of this property is the plot.

It's on a generous plot, with plenty of parking,

a good side garage and a large garden, great for families.

The agents are satisfied with what they've seen

but what kind of value would they place on this property,

with an investment so far including purchase price of around £163,000?

On the open market this property in its current condition will be

selling within the region of £175,000 to £185,000.

If I was going to market this property for sale,

I would list it at an asking price of £195,000.

Those values are excellent.

To say that the property still needs quite a bit of work doing,

later, the values are spot-on.

I'm quite happy with that.

Quite right too.

That top valuation of £195,000

could mean a pre-tax profit of a very nice 32 grand.

As we already know, this property is not for sale and Chris is happy

to continue renting for the next two years.

With regards to renting this property out,

you are looking within the region around £650-£700 per calendar month.

If I was going to let this property out,

I would suggest an initial rent of £795 per calendar month.

They're very good figures and I expect figures like that.

It's rented at the moment at 675 per month,

and I'm very happy with that.

Chris's £675 creates a yield of just under 5% which,

along with the value he's added to the property, makes it a big success.

So, come on, Chris, after hearing those valuations,

surely your plans have changed?

No, I'm just tempted to smile a bit more.

We head back to London now and the popular area of East Ham.

It was here that we took a look around this well-proportioned one-bedroom first-floor flat

that had a very attractive guide price of £140,000+.

This blank canvas of a property was full of potential,

and the changes needed were obvious to me.

So, you could push this wall back here to make this lounge bigger

and then you could put your kitchen units all along the back here.

It would make this lounge feel a little bit smaller

but I think, in this case, it would work.

And perhaps more importantly, this old kitchen, well,

it could then become bedroom number two.

It wasn't just me that saw the potential of this place,

with several buyers battling it out on auction day.

The successful bid of £182,500,

£42,500 over the guide price,

belonged to successful property developer Mohammed.

Buying this property for a client, Mohammed, like me, saw the potential

to add not only another bedroom but also an en-suite as well.

However, with his client keen to sell,

Mohammed was under pressure to deliver a handsome profit.

The client would like to sell it on

so that they can move on to another project.

-So you really do need to make sure you sell this at a profit?

-Yes.

-Otherwise, your client's not going to be happy at all.

-They won't.

-You won't have done your job properly!

-No. I wouldn't be happy either.

# Pressure

# Pushing down on me

# Pressing down on you

# No man ask for... #

Mohammed had plenty of experience, though,

and with the help of his regular builder friend, Saif, doing the work,

he felt his budget of 15,000

and timescale of 6-8 weeks was more than sufficient.

Two and a half months later, we've returned to East Ham to see

how Mohammed's latest project has progressed.

Wow! There's been some serious changes since we last visited.

Mohammed's builder, Saif, was on hand to explain the layout changes.

Yeah, so here used to be, before, like a master room,

a front room, living room.

And what we have done, like, there used to be a wall in here,

which we took the wall off and we moved the wall over there.

We have added this wall here.

And to support the roof and take the weight of the roof,

we have put an RSJ here.

And basically, we have added this massive kitchen in here,

which is usable for whoever wants to move in.

Originally, Mohammed had plans to create a kitchen/diner,

but after taking advice from a local estate agent,

he decided to keep the two rooms separate, which still frees up

the old kitchen to become that all-important second bedroom.

And it doesn't stop there.

They've also renovated the bathroom from top to bottom.

The master bedroom now comes complete with its own en suite.

Mohammed and builder Saif have really maximised the space here.

They've turned what was a one-bedroom first-floor flat

into a two-bedroom, two-bathroom first-floor flat.

Yeah, feel really good that it has turned out as we expected it to be.

You know, from a one-bed unit, we have turned it into a two-bed,

two-bath unit with a separate kitchen.

And the finishing has turned out as we wanted it to be.

And, yeah, myself, my client and Saif,

we're all excited that it's turned out as it has.

When he feels happy, it makes us really excited,

so we try to work hard and have a really good finish for him,

which I think we have succeeded.

The freeholder approved the alterations

and the improvements that we carried out.

We sought permission for the moving the kitchen

into the living room space and the addition of the en-suite.

All that was approved without any problem, because they realised

it is an improvement and it improves the value of the freehold as well.

You have to ask permission from the freeholder before making big changes,

plus, in this case, because of the addition of the RSJ beam,

Mohammed had to seek permission from building control,

which meant his timescale went from eight weeks to ten weeks.

But what about that budget of 15,000?

How is that holding up with all these alterations?

We went slightly over that.

We came up to around 16,200, so we went 1,200 above the budget.

But that was because of the additional work

involved as a result of the addition of the RSJ.

That means, including the purchase price,

Mohammed's client has invested just under 199,000.

And with Mohammed under instructions to sell

and make that all-important profit, it seems like the right time

to hear the thoughts and opinions of two local estate agents,

starting with the agent who saw it originally.

I think the changes they've done are really, really nice.

Fantastic finish on the property.

I like the way they've moved some of the walls around as well.

Property has a huge amount of potential now. Yeah, fantastic job.

I like the fact they've made it into a two-bedroom property,

especially for this area.

They've actually enlarged the property, which is obviously a good

thing because they've turned it from a one-bedroom into a two-bedroom.

I really like the small en suite they've done.

I like the way they've got the separate lounge and kitchen and,

all-in-all, the general feel of the property is very, very nice.

Nice, simple colours - really good property.

So the agents are impressed with what's been done,

but time to talk numbers.

Will all of Mohammed's changes mean that he's made a good-sized profit?

On the open market now, we value this flat at £260,000.

For resale value in the current market, I think

you'd be looking somewhere in the region of £255,000 to £265,000.

Wow, that is, you know,

a significant jump from the original valuation.

So, that is excellent and excellent news for my client.

By moving the flat around, Mohammed has certainly reaped rewards.

If they did achieve that top valuation of 265,000,

that would mean a pre-tax profit of £66,000,

which makes this project a great success

for both Mohammed and his client.

He'll be overjoyed.

I think he's made a significant profit, so he will be very pleased.

But only once it sells. That's when he can count his profit.

Well, there are plenty of auctions taking place all over the country.

Yes, and we'll be there, ready to record the action.

-So make sure you join us for more Homes Under The Hammer.

-See you then.

-Bye-bye.

-Bye for now.