Episode 50 Homes Under the Hammer

Hello, home is where the heart is,

whether it's a chic city pad or a peaceful country cottage.

Or maybe you've always wanted to buy a plot of land

and build your house from the ground up.

Yes, well, whatever your dream,

it could be waiting for you at the auctions.

Now bidding at auction can be a daunting task.

But the adrenaline buzz that you get when the gavel falls in your favour,

well, there is nothing quite like it.

So who came away from the auction room feeling victorious?

Let's see what was bought on today's show...

In Shropshire, is the writing on the wall for this house?

That's not good.

This is adding up to a fairly serious picture.

Whereas on a trip to Doncaster, I see a house at a knockdown price.

Maybe that's why.

And it's earmuffs at the ready for this problematic property in Strood.

No, this property will not be for everyone.

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.

It's yours.

Well, nestled in the heart of rural North Shropshire

is the little hamlet of High Hatton.

No amenities to speak of,

but if it's peace, quiet and lovely scenery you're after,

this is your spot.

This is exactly what you imagine when you say rolling countryside

and you are certainly away from it all.

The nearest big town is Shrewsbury and that's a 30-minute drive away.

So what is it going to cost to buy a home in this beautiful part of the world?

Well, maybe not as much as you might think.

£90,000 plus was the guide price for this...

A three-bedroomed semi-detached brick built ex-local authority property,

loads of land... Looks pretty good.

Well, no issue with off-road parking here.

There's loads of drive space and plenty of lawn.

A complete blank canvas for a gardener

or low maintenance for those who are just happy to use a mower.

So, as with most ex-local authority property,

we're expecting space and solid walls.

Well, we've certainly got the space

the moment you walk in through the front door - a large area here.

Stairs up to your bedrooms.

Down this little corridor, a large sort of dining area there

and then into your main living space.

Lots of light pouring into this room, it's a good size,

you've got open fires here, lots of little places where you can store stuff.

I mean, ex-local authority houses are generally really practical places to live.

So that's good. Through to the kitchen and...

Now that's interesting...

You don't normally expect to walk downhill...

er...

when you're walking around a house, but, er...

That's not good...

This floor here is much lower than that floor there.

Oh...

Oh, dear.

That's not good.

This is adding up to a fairly serious picture.

I shall come back to that very large crack.

Let's continue our exploration for the moment.

Into the kitchen.

It's actually a good size, it looks like it's been recently refurbished.

It's possibly not the highest quality cabinets,

but it's clean, it's usable,

a bit more extra space there.

I mean, it's a good house...

with one slight flaw.

No, slight is the wrong word.

One potentially massive flaw...

or uneven FLOOR.

# What can the matter be?

# Yeah

# You're fatally flawed. #

Oh, dear, and there was me saying how solid ex-local authority housing generally is.

Clearly something's very wrong and my guess is it's subsidence

because those tell-tale cracks are everywhere.

Well, upstairs, once again it's a case of good and bad.

Three really nice-sized bedrooms

and a bathroom where you would hope it would be -

at the top of the stairs - in reasonable condition.

Well, that is until you start...

well, "Until you start poking about," I was just about to say.

But you don't have to poke about very much.

Just open your eyes and you see the most humongous crack in this wall.

So the subsidence is not limited to that side of the house,

it's on this side, as well.

And look at it!

I mean, that is really serious.

Um, wow!

You can't cover that up. I mean...

wow!

# Slip sliding away

# Slip sliding away

# You know the nearer your destination

# The more you're slip sliding away. #

Such a shame because the space here is really good

with three bedrooms, two of which are good size doubles

and then a smaller single.

But it's the structure of the house that's letting the side down,

or, should I say, the side is letting the house down.

So around to the back of the property and great views,

good space, but time for a bit of detective work.

What is causing all those problems inside?

And I don't think you have to go too far to see...

the potential culprit.

We've got a slab of concrete here.

It's been filled at some point in the past

and yet another crack has developed.

This is sinking down towards this here,

which, surprise, surprise, is a drain.

And if you look at that, well,

it's all fallen to pieces.

Water's getting in there,

leaking down this little gap round the edge, there.

The actual drain itself might be giving way further down.

That is then basically saturating this bit of land,

which means that the foundations are giving way and this corner,

and, actually, unfortunately the whole of this side of the house,

is starting to sink. It is classic subsidence.

MUSIC: Bad News by Moon Martin

# Bad news. #

Course it is fixable, but normally it would require underpinning,

digging down under the foundations and then supporting it

with lots and lots of concrete.

It needs to be undertaken by experts

and can cost in excess of £10,000.

But as long as you factor it in when you buy the house,

it doesn't have to be a dealbreaker.

But if you stumble into this unaware of the issue,

you'd be in for a rather nasty shock.

What does a local estate agent make of this sinking house?

I think one of the key benefits of this property

is its lovely rural location.

That's really attractive to a wide range of buyers.

The subsidence is obviously a large issue

and something that would need to be sorted out at a very early stage

before anything else progressed.

But once that is sorted...

..and it's certified signed off, it could make a lovely home.

I agree and making a reasonable assumption that it costs,

say, £10,000 to fix the problem,

what kind of value could this house,

guided at £90,000, have on the sales market?

You'd expect a property like this to sell for between

£180,000 and £190,000.

That's encouraging.

And what about its rental potential?

We'd expect this property to let for between £650 per calendar month

and £675 per calendar month.

So it's a house in a really lovely location,

intrinsically a good property, loads of space.

Only one slight fly, or rather elephant, in the ointment,

and that is that subsidence.

But get it at the right price

and factor in the cost of putting it right

and it could still be a really good one to go for.

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

197, we move to Shropshire. It's a freehold semi-detached house

with attractive views to front and rear.

Start me at £80,000.

Upwards of £80,000, please. 80, anyone?

On my left, 80 I'm bid.

81 anywhere? 80 here, your bid.

81 anywhere? Yes?

81. 82? 82. 83?

83. 84? 84. 85?

85. 86? At 86, there. I saw you, madam. 87?

87. 88? And 89? Yes. 89.

And 90, please? 90 I'm bid. 91?

91, fresh place. 92. 92. 93, sir. 93, 94.

No. 93,000, gentleman on the aisle.

First time, then, at 93.

Second time at 93. Anybody else?

Third and last time at £93,000.

It's going to sell on the aisle, 93,000.

Sold. 93.

And so just over the guide price and for £93,000

the three-bed sinking house in Shropshire

was bought by Mohammed.

Mohammed is a taxi driver,

but has done a number of property refurbishments over the years.

And he joined me, along with his son, Arif, back at the house.

-Mohammed, Arif, good to meet you both. Congratulations.

-Thank you.

Tell me why you wanted to buy the house.

Well, it's in a good location.

It's got nice, interesting views and the guide price was quite appealing.

So, when did you come to see it?

We didn't see it before the auction.

-You didn't?

-No.

-No.

-When did you see it for the first time?

-Today.

-Today?!

-Yeah.

So, what did you think when you saw it for the first time inside?

It was all right. It was a good condition.

Not a lot of work needs to be done. It's quite modern.

Did you just say not a lot of work needs to be done?

-On the interior.

-HE LAUGHS

Structurally, a fair bit of work, I think.

Now, the subsidence would definitely cause a few people

to have sleepless nights.

I saw worse than this.

We can do it, no problem.

Well, they seem remarkably calm about buying this house blind,

and then finding it's got fairly large structural issues.

To be fair to Mohammed, though, I've seen worse. Mmm...a lot worse!

And they've already thought about tackling it with

a structural report, and getting contractors in to fix it,

so hopefully, it will turn out OK.

So, apart from sorting out the subsidence, then,

what are you planning to do to the house?

It doesn't need much work, only, like, you know...skimming

if you want to do it, or just do the paint.

So, what's the budget for what you're planning?

It's ten grand.

-To get the whole place sorted?

-Yeah, yeah, ten grand.

-No more than ten grand.

-OK.

And what about timescale?

-Probably three to six months.

-Right.

-Around that sort of time.

Oh, I don't think so...

THEY LAUGH

Not three months. Maybe six to eight weeks.

Six to eight weeks at that £10,000 budget

might be pushing it, Mohammed.

The subsidence alone might take £10,000 to fix.

It seems this might be a bit of a learning curve for them both.

Obviously, Arif, you're quite young.

-How old are you?

-16.

Are you getting involved in the family business, then, with this,

-or into the property side of things?

-Yes, he's about...

-nine or ten since he started on this interesting business.

-Oh, great.

Yeah, he's very good on it.

So, what's your job going to be in the renovation?

Probably just managing it, really.

-Oh, great.

-Yeah. Nothing too hard...on the labour side.

OK, and you enjoy it, obviously.

-Yeah, it's good fun. It gives a good return as well.

-Yeah, yeah?

-Good pocket money.

-Well, listen, congratulations!

-Thank you.

-And good luck with it!

-Thank you.

-Look forward to seeing how you get on!

-Yes, sure.

Um...it would seem that young Arif has possibly a slightly

teeny-weeny-weeny-weeny bit more grasp on the potential problems

that lie ahead, especially with that subsidence.

Thankfully, I think at the end of the day,

they will still do OK, but I don't think it's going to be

quite as straightforward as Mohammed thinks.

You can find out what happens later in the show.

Doncaster in South Yorkshire is where I'm heading today.

This is a place which has long been a stopping-off point,

with stagecoach trades from the 17th and 18th century generating

wealth that built the town centre.

Just south-west of the centre is the area of Edlington.

Once the home of Yorkshire's main colliery,

it has fallen into decline, which means there are opportunities

here to get a whole lot of house for not a whole lot of money.

The property I'm here to see is right in the heart of Edlington.

It has a guide price of £12,000-plus,

which seems pretty reasonable for a three-bed, mid-terraced house.

Maybe that's why.

MUSIC: The Sound Of Breaking Glass by Nick Lowe

# Sound of breaking glass... #

Broken glass or not, £12,000 does seem remarkably cheap

for any property, let alone a three-bed house.

It's making me really nervous about what I'm

going to find behind this front door.

OK.

The first thing you notice, as you come into the really tight, narrow

hall now, I'm not sure why this wall is on a bit of a skew.

That's a bit of a strange one.

And it's false.

You've got a door here which doesn't fit that frame,

so must swing around to this one here.

There's a room behind here,

which is very small.

And we come through into the living room area.

There's a cupboard, of sorts, just there.

A false wall, knock it through, give yourself some more space.

Another door going up to the stairs.

I haven't seen that since the '70s, when I lived in Leicester.

If you follow me through here, I'll show you the kitchen area, which is very small,

but it's usable,

although you could think about taking this wall out,

which would create a kitchen, dining, family area.

Perfect for a small house like this to create more space,

and that's what I would do.

MUSIC: The Modern Way by The Kaiser Chiefs

Now, I know open plan isn't everyone's cup of tea.

The cooking smells in the sitting room,

the clatter of dishes when you're trying to watch the footie,

assuming I'm not doing the dishes, of course,

but a lot of families do prefer a bigger space to interact in.

Small galley kitchens just don't cut it nowadays.

# This is the modern way... #

OK, upstairs, we've got three bedrooms,

and we've got a bathroom as well, upstairs. Great start.

A bedroom to the back of the property,

a smaller bedroom just here,

and in here, the first thing you see is this old, classic fireplace.

Nice high ceiling, but on the ceiling, there's polystyrene tiles.

They would have to come out.

Very classic terraced house,

which just needs a bit of TLC,

a bit of warmth brought back into it,

just bring it back to the 21st-century.

MUSIC: 21st Century Life by Sam Sparro

# 21st century life

# I got swept away

# I got 21,000 things

# That I gotta do today... #

There sure are a number of jobs to get this place up to spec.

Quite frankly, for the most part,

I'll strip everything out and start again.

New bathrooms, decor, carpets, plasterwork, electrics, the lot.

And a few panes of glass wouldn't go amiss.

Outside, it's a bit of an eyesore.

Fixing that fence will add to your to-do list,

but remember, the house was guided at only 12 grand.

MUSIC: Feel Good Inc by Gorillaz

What does a local estate agent make of it, and the area it's in?

This area's good, because a lot of them are run down,

but with the increase in employment, increase in jobs, bringing them

into the area, I think certainly demand is high,

and will continue to improve.

OK, so the area is likely to improve, but will that be

reflected in the property prices, with this house guided at just £12,000?

My gut instinct is once renovated,

you're probably going to be looking at £50,000.

So, resale values are certainly encouraging, but what about rental?

Rental, with it being a three-bed, done up nicely,

you're looking at £450 per calendar month.

What can I say? This is a total overhaul for me.

Strip it back to the bare bones and start again job.

And if you get it for anywhere near the guide price of £12,000,

I think it's money well spent.

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

Lot 15.

It's a three-bedroomed mid-townhouse

that needs a scheme of repair and improvement.

There are two property bids

and three telephone bids in on this property.

The lower of the two property bids is £15,000.

I will start the bidding, therefore, at 15,000.

15. 16, somewhere?

16, I've got.

With me at 17. 17,000. 18, sir?

18,000. 19.

At 19,000. 20.

At £20,000. 21 with me.

At 21. 22?

22 is bid. 22 and a half with me on a property bid.

23,000. 23.

The property is finished.

23,000 is on the telephone.

23,500, a seated bid.

At 23,500. 24?

24 is bid. 24,500.

24,500. 25,000.

25.

25 and a half, thank you. 25 and a half.

26.

26, I've got you.

At 26, a new bidder. 26,500?

26,500.

26 and a half. 27, sir?

£26,500.

Once.

Twice.

Third time.

Sold at 26 and a half to number one.

Thank you.

# You're number one

# In my book... #

And that number one bidder was Graham, who along with

his business colleague, James,

acquired the house for 26 and a half grand.

Perhaps not surprisingly, over double that low guide price.

Graham is a co-director of a firm that builds

and manufacturers timber buildings for gardens.

But over the years, he's done a number of property refurbishments.

Nice to meet you, Graham.

-Congratulations.

-Thank you. Nice to meet you too, Dion.

Tell me why this property in particular?

Well, we were looking to buy a few properties in the area

to go in a portfolio.

-Did you mention "we?" Is there somebody else? Have you got a business partner or...?

-Yeah.

I've done this for about ten years.

I've got properties, and commercial and domestic properties,

but a number of colleagues approached me and said,

"We want to get involved in a pension fund,"

so we threw some money at it.

There's four of us. We all work together,

and we're really doing it as, like, a ten-year plan, really,

for their pensions, and we decided to choose this area to try

and get a decent portfolio together.

Will they all be to rent, or all be to sell?

The idea is that we get a portfolio which is of a fair balance,

so some will be literally just to rent out

if we think that they're a decent price.

But this particular one is one that we want to knock about,

and that's why we've chosen the low end of the market.

MUSIC: Better Together by Jack Johnson

I like Graham's thinking.

He and his colleagues, James, Matthew and Richard

will be spreading the risk.

As well as the highs and lows of property development,

it might be much more fun than doing it on his own.

# Well, it's always better when we're together

# Yeah, it's always better when we're together... #

And this low-end property is to be part of the group's rental portfolio.

I was interested to know how much knocking about

Graham and co had planned here.

-What are you going to knock about in this?

-Everything.

DION LAUGHS

Absolutely everything, from the bathroom,

down to the kitchen, to the living room, knocking walls out.

-Get rid of this hole.

-Uh-huh.

-Block it up.

Redo the kitchen altogether,

put a new door down there.

We're going to knock through the living room into the hallway

so that's a completely open space.

Every single wall will be taken back to the brick, replastered.

-All the windows need replacing. The windows, not the actual frames...

-Yes!

..but the windowpanes.

New bathroom.

We're going to knock through where the boiler is,

and put a shower in there.

The central heating needs doing.

There's no central heating.

It needs a new combi boiler putting in,

so there's quite a substantial amount of work to be done.

-There's a little bit of work to do...

-In the garden.

-..outside as well!

-Yeah, do you think you could do me a new fence?

-Or A fence!

-Yeah.

DION LAUGHS

And how long are you hoping this will take you to get finished, Graham?

We've budgeted on five weeks, and we think it's going to cost 12, 13,000.

That's the budget.

And this extensive range of work will be contracted out to builders,

with Graham overseeing the whole project.

I was intrigued to know how the finances would work

if this house remained as a rental property.

With the value of the property that we paid for it,

and the refurb, we think we can keep it under the 40,000 mark.

That way, we should get it valued at, say, 55, 60,

-and get the 40,000 out again by remortgaging it...

-OK.

..to recycle it and roll it over into the next property.

-Listen, I wish you all the best, Graham. I hope it all works out for you.

-Thank you very much.

-Good luck to you, pal.

-All right, thank you. We'll need it.

Graham has already got lots of experience in property developing,

but this is new to him.

Working in a team, and working with his mates.

Will they be mates at the end of it?

You can find out later on in the programme.

Coming up, if you want transport links right on your doorstep,

this house in Strood might be the house for you.

The train line runs right the way across the back of the garden.

And we return to Doncaster to see if Graham and co have

cleaned up when it comes to their property purchase.

None of us have really got our hands dirty,

apart from this morning, having a quick wipe round with the cloth!

But first, we return to the small Shropshire hamlet of High Hatton.

And it was here that we came across

a large three-bed semidetached house.

Surrounded by land both back and front,

it seemed like a great rural retreat,

but while the views looking out of the house were stunning,

the views looking in were striking.

Mmm...but in a less pleasing way.

I mean, look at it. I mean, that is really serious.

# I'm falling to pieces

# I'm falling to pieces... #

Yes, this place had big issues with subsidence,

and was going to need some serious structural work to get it back on an even footing.

Not that Mohammed or his son Arif knew this because

guess when they first saw it?

-Today!

-Yeah...

So what did you think when you saw it

for the first time inside?

It was all right. It was in good condition.

Not a lot of work needs to be done, it's quite modern...

Did you just say, "Not a lot of work needs to be done"?

On the interior.

Structurally, a fair bit of work, I think.

But we can do it, no problem.

Well, despite his confidence,

this really wasn't the house you should buy unseen.

But taxi driver Mohammed had quite a lot of experience over the years

having refurbished a number of properties,

so he wasn't overly concerned about the state of the house.

With his 16-year-old son Arif designated as project manager,

he thought he could turn it around on just a £10,000 budget

and it might be possible to do in 6-8 weeks,

whereas Arif felt a timescale of 3-6 months was much more realistic.

So who was right?

Well, now over ten months later we're back and the good news is...

..the house is still standing.

And on the face of it, all seems well.

But what about those structural cracks?

You can see we've repointed all along here.

That's mainly cos we've done underpinning in this area, so it's

all had new concrete underneath, been reinforced with steel as well.

And the drainage system has all been redone because that was

the cause of the subsidence, it's had all new drains around here.

Well, it might have taken a lot of work to get this sorted,

but now it's done and this house should be set for some time to come.

-# Never been better

-Oh, oh, oh, oh

# Come on

-# Altogether

-Oh, oh, oh, oh

# I've never been better... #

And with the structural work finished they could finally

turn their attention to the interior of the house.

We've replastered, re-skimmed, painted,

all the doors have been changed,

new carpet, new concrete for the flooring.

And structural issues aside,

the house wasn't in too bad a decorative order to start with,

but by changing the flooring and fresh paint work,

the whole place has been given a lift from top to bottom,

with the three good size bedrooms again looking crisp,

clean, and most importantly, crack free.

But to get to this stage has taken considerably longer than expected,

so is Mohammed still as chilled about the challenges?

There's not big, anything, really. No challenge.

I've so far just take time to find the builders.

That was mainly because it's quite far away from where we live,

so we had to find builders in the area, we had to get surveyors out.

It took us about, I think, six weeks between each surveyor,

and we had three or four surveyors out,

so the original timescale we thought would be 3-6 months,

but in actual fact it's taken us ten months.

Structural issues and particularly underpinning is definitely

something not to rush into, so I'm not surprised the timescale slipped,

but what about their budget, did that go the same way?

The original budget was £10,000 for decorating, subsidence, everything,

but that's actually gone up to £30,000.

That's because there was more underpinning required

than we initially thought and we've also had to put in new flooring.

Oh, dear.

Three times the original budget,

that is one of the perils of buying blind.

Addt that spend to the original purchase price of 93,000

and the total comes to 123,000.

So has all the risk been worth it?

We asked the agent who saw it before to come and tell us

what he makes of the work that's been done.

Mohammed's made a really nice job of it.

It certainly looks completely different from last time I came out.

I think he's made a very nice cottage.

The standard of the finish is good

and it will appeal to the sales market.

The negatives of the property are the previous subsidence may put

some potential buyers off which is likely to come up in some surveys.

So the history of subsidence may affect the value,

but currently Mohammed and Arif are uncertain

whether to rent or sell. Maybe the figures will help.

If I was to offer this property onto the lettings market,

I'd put it up for rent at £650 per calendar month.

Rent is good. Maybe £50 short.

But even a rental return of £650 per calendar month

would generate a rental yield above 6%, so that's OK.

But what about the resale value of a house they've invested £123,000 into?

On the sales market, I'd expect this property to achieve

between 180 and £190,000.

Evaluation is relatively low.

I think it should be around 195 to 200,000, but it's OK, I guess.

Well, I think it's more than OK.

There's a potential pre-tax profit of up to £67,000.

Given it was bought blind and had subsidence,

this could have been a lot worse.

But have they decided what to do with the house?

It's better for us to sell it because if we put it on the rent,

it take a long time to recover money,

-so it's better to just move on, sell it.

-I'm not surprised.

With Mohammed and Arif being based a couple of hours away

in Bedford, it probably does make more sense to sell this on.

So what's next?

I think we'll probably head back to the auction

and see what's available on the market.

Strood in Kent seems to have a lot going for it.

Good rail and transport links, plenty of shops,

and apart from the abundance of rain we have today,

it's also not short on traffic.

So the first thing you can't help but notice,

well, this is a really busy road,

and it's not helped by the roundabout which is just there

which means cars are slowing down and speeding up

right in front of this property I'm here to see.

Urgh, not ideal.

But there is some good news because it's an end terrace

and you do get this nice, big space here

for off-road parking at the side.

So it's got two bedrooms and it's got a guide price of 95 to £100,000.

# Why does it always rain on me? #

It's good to get out of that rain

and away from that busy road noise.

So inside, well, you can see somebody's already ripped up

the carpets, and there they are, plonked on the floor.

So definitely need to think about new carpets in this house.

One real positive for me is that, well,

it looks like new double glazed windows

and it really does keep all that noise out there at bay,

although you can hear a little bit of the traffic,

so that is something to bear in mind.

Good news is, we've got electricity in here.

Somebody's going to need to plumb in this radiator because

it's hanging off the wall, so that needs to be done.

And right at the back of the property, we've got the kitchen.

Now this is a great space.

You could even think about potentially opening this space up,

but I quite like it separate.

And I would go as far as saying, I think these are fairly new units,

you've got good worktops, you could come along,

just plumb in the washing machine here, not bad at all.

You can see the sizeable garden from where I'm standing.

Bit of a negative,

I can see the train line runs right the way across

the back of the garden, so it's not the best sight I've ever seen,

but if you work with the interior space,

it's a pretty good house so far.

Yes, this property is a real mixed bag.

The inside of the house is really promising,

good sized rooms downstairs,

a kitchen that could do with a bit of upgrading,

but otherwise it's fine.

And upstairs, the two bedrooms offer plenty of room.

Though, like downstairs, missing a radiator or two.

And along with the bathroom,

you would say this is a great family home,

but its position is really what lets it down,

unless you're into cars and trains, that is.

They're not the only concerns outside.

Looking carefully, I can see a crack.

Have a look up there. It goes from there all the way down to there.

Yes. Cracks like that might not be anything to worry about,

but on the other hand, well, it could be a sign of subsidence.

I just hope whoever bought this at auction had a survey done

so they don't get any nasty surprises later on down the line.

It may be a case that all the traffic, those cars and trains

and being end of terrace, the house might have cracked under pressure.

And as we know from Mohammed and Arif's experience with their

property in Shropshire, cracks like these need to be checked by experts.

Unfortunately, that's not all the downsides there are.

There is another thing about this property that's not ideal.

It's leasehold, which means a yearly expense to factor in, as well as

permissions needed if you want to make any major changes to the place.

But there is something that makes it more appealing.

Hold on to this for another four years

and then you have the option to buy the freehold for £100 plus costs.

Make this a freehold property and you'll certainly add appeal.

Ah, at last, a bit of potential good news.

Adding appeal can also add value, so despite a few concerns

perhaps this house does actually have a lot to offer.

But whether the positives outweigh the negatives, I'm not sure.

# One part right, two parts wrong

# One part love, two parts pain

# One part sunshine, two parts rain. #

What does a local estate agent think about the house and its position?

I think for a lot of people it's going to put them off.

The noise isn't too bad

because if you get good double glazing that will get rid of

some of it, but I think if you've got young children or pets,

you're going to be really concerned about being in this location.

One thing that it does have going for it,

you've got a nice lot of room at the side,

so you've got plenty of parking and the house inside is a very

light house, so you can do something with it.

And perhaps with that guide price of 95 to £100,000,

one of the things you could do with it is make some money.

I think once this property has been renovated

we'd be looking in the region of £170,000.

If I was going to rent this property

I would be looking in the region of £895 per calendar month.

With those kind of figures,

I'm starting to like this house a whole lot more.

No, this property will not be for everyone,

but if it is just cosmetic work that needs to be done here, well,

it shouldn't take too much money to turn this place around,

just as long as that crack isn't a sign of anything more sinister.

Who was prepared to take it on?

Well, let's go to auction and find out.

It's a house refurbishment.

It's got two bedrooms and a bathroom

on the first floor. 100,000 for it.

90,000 I'll take if you like.

90,000, in the white T-shirt I have.

And 5 I want now. 95, do I see?

95. 95, sitting down.

Can I say 100? 100.

And 5. 105, if you like.

105, do I see?

I'll take 2, if you like.

102? Thank you. 102. 105.

107. 110. 112.

114. 116.

116. 116. 118.

118. 120.

120, sitting down.

120. And 2. And 4.

124. 124. And 6. 126.

And 8. 128, I've got.

130. 132.

£130,000, back to the maiden bidder for the first time.

£130,000 for the second.

Third and final time. If you're all done at 130.

All done? Well done, sir, you stuck with it.

And the bidder who stuck with it from start to finish

and bought it for 130,000 was Daniel.

Daniel works as a security guard and currently lives nearly an hour

and a half away in West London with his parents and his girlfriend Kim.

So I was intrigued to know why he was buying this house in Strood?

-Daniel, congratulations.

-Thank you.

-Well done.

-So you got this one, the hammer went down and it's yours.

-Yeah.

What did you do to prepare?

I looked around the area, but as soon as I saw this house

in the catalogue, I just sort of fell in love with it.

Why did you fall in love with it?

I mean, this is not everybody's dream.

It overlooks a roundabout, a very busy main road, a train track.

It has not put you off in the slightest?

No, to tell you the truth, it actually excites me to have such.

The garden's quite big.

You've got the whole side of the house as well,

and obviously inside it isn't too major works to be done.

It's only mainly painting and decorating,

replacing the bathroom and kitchen.

OK. Now interestingly, you're not from this part of the world.

Why did you decide to buy here?

Mainly because the price was right.

Obviously when you live in London then prices just soar through

the roof, so I couldn't afford it,

but the plan is live here for a year or two, see how it goes,

see how work goes here, and then gradually move closer to home.

OK.

It's a few years to go yet when I get back to home.

# I'm working my way back to you, babe. #

Well, I think Daniel isn't alone in finding

London prices too hot to handle,

so it really does make sense to move further away from now,

though in some ways he's gambling that he will be able to

afford to move back towards London

where prices seem to be going only one way, and that's up.

So how does he hope he will add value to the house and at

the same time make it a great new home for him and his girlfriend Kim?

We'll be refurbishing it fully, new bathroom, new kitchen,

new paint on the walls, windows will get replaced upstairs.

The garden, that's what I'm most excited about.

Why are you most excited about the outside spaces?

I like learning new things, so I've never done gardening before,

never laid grass, never done decking, never planned,

no gardening whatsoever, so it's a new thing to me,

so I'll be learning, researching and seeing what we can do.

One of the things he has already done is have that crack checked out

by a friend who is a surveyor

and they're convinced it's nothing to worry about.

He's also looked in to getting the freehold, which he can buy

for £100 in 2019, but while he might have to wait till then

to get that sorted I'm hoping the house will be done a little quicker.

So how long do you think it's going to take you to do the work?

We've planned two weeks.

-What?!

-Yeah.

-Hold on. How are you going to do that?

I happen to know you are a very busy security guard,

and how many hours a week do you work?

-On average, about 72.

-72 hours a week?!

How on earth are you going to manage to put any time into this?

Well, I'll work around work, do it on my days off.

My dad has got holidays already booked,

so he'll be here most of the time.

Tell me about your dad. Is your dad a builder?

Yeah, he's a coach driver now,

but he'd done building for a good 30 years.

But he does everything, building, plumbing, plastering, everything.

-He is the man to know.

-He is, yeah.

He'll be teaching me and showing me a few things along the way.

Daniel is lucky to have such a skilled dad at hand

because with a 72-hour week his time for the renovation is limited.

I've got a feeling Dad is going to be doing most of the work here.

Hope you're prepared, Ted,

unless Daniel could manage working around the clock, that is.

# All day and all of the night. #

Tell me what this house is going to look like when you've done it?

What colour walls, what's the furnishings,

what's the feel of the house going to be?

I don't know. Kim knows all of that.

So Kim's the designer, she'll be choosing the colour,

-you'll just be putting the paint on the walls?

-Exactly,

cos knowing me I'll end up choosing colours that clash and don't go

and stripes with spots and, yeah.

It's best to leave me out of it.

-It's been brilliant meeting you today.

-Thank you very much.

I'm really excited to see the outcome and to see what you

and Kim and your dad make of this property.

-Yeah, we'll see.

-Good luck.

-Thank you very much.

-Thank you.

So Daniel has only given himself two weeks to do all the work here.

He's going to be one busy man

and that is without working his 72-hour week.

Will this be a happy home for him

and girlfriend Kim and will they smash it?

Join me later in the programme and you can find out how they get on.

Well, we've seen property number one.

How's the journey been at the other two properties?

Has it been a smooth ride or a bit of a bumpy journey?

It's time to find out.

It was just outside the South Yorkshire town of Doncaster

in Eglinton that we first came across this three bedroom terraced house.

It was dilapidated, run down, neglected,

with boarded up and broken windows.

This house was in a pretty sorry state,

but that's nothing extraordinary for an auction property.

However, there was one unusual thing about the house

and that was the guide price of just £12,000.

It was that potential buying price that attracted local businessman

Graeme, who snapped it up for what still seems like a bargain of £26,500.

For Graeme, this house represented something different

from previous property purchases.

I've done this for about ten years.

I've got properties, and commercial and domestic properties,

but a number of colleagues approached me and said,

"We want to get involved in a pension fund,"

so we threw some money at it, there's four of us,

we all work together and we're doing it like a ten-year plan, really,

for their pensions,

but this particular one is one that we want to knock about

and that's why we've chosen the low end of the market.

Knock about, indeed.

They had plans to take down walls, move doors along,

along with essential jobs such as plastering, new boiler, electrics,

a fence in the garden, and some glass in the windows would be nice.

Graeme and co had set themselves a budget of 12 to £13,000

to contract out the refurbishment work.

They'd hoped to get it completed in just five weeks,

but now just over three months later we're back.

Well, look at that.

It's no longer looking a little grey, it's clean and cream

and looks loved with new double glazing.

They have bricked up one of the windows though, I wonder why?

Ah, that's why.

They've removed the corridor,

opening up the front reception room which brings in more light to

the living room and gives it a much more open-plan feel.

We've knocked the house about quite a bit.

We've had a full rewire, we've knocked a partition wall out

when you come in through the front door,

we've moved a doorway with the entrance to the kitchen.

And a complete overhaul in the kitchen has finished it off nicely.

Upstairs, the knocking about has continued,

with the immersion tank removed and the combi boiler installed.

They've created enough space for a bath and a shower.

The three good sized bedrooms are now bright and fresh, it's amazing

what a lick of paint, carpets and, oh, yes, glass in windows can do.

So the house inside is looking great, but remember that sorry back garden?

Ah, that's the ticket. Order where there once was chaos.

But how involved have Graeme and co been in this transformation?

Out of the four of us, none of us have really got their hands dirty

apart from this morning, just having a quick wipe round with the cloth.

Careful, Graeme, don't overdo it.

Mind you, the hands off approach seems to have worked wonders here.

They must be pleased with the results.

Two of the guys have not even been to have a look at the finished

article yet, but Matt, one of the partners, he's had a look

and he's fairy happy with it.

There's a few snags still to do

cos we only got it finished at the weekend.

So two of the business partners haven't seen the changes to the house,

but there was something else they all missed out on.

# I didn't see it coming. #

Unfortunately we didn't read the legal pack, but we will from now on.

We discovered that it were leasehold rather than freehold,

but because it's got 84 years on it I don't think it's going

to bother us too much with our ten-year plan.

Luckily the plan is to let this place out

and for it to generate income over the next ten years.

A house being leasehold isn't disastrous,

but it is a reminder that you should read the legal pack.

Let's hope there were no more mistakes on the budget.

The original budget was 12,000.

We've overspent slightly and it's cost us another £1,200,

so 13,200 in total.

£13,200 on top of their 26,500 purchase price

will take their total cost to just below £40,000,

which seems amazing value for a fully refurbished three bed house.

What do two local estate agents think?

Firstly, the agent who saw it three months ago.

There's obviously been quite a bit of work done, I can see that

they've rearranged the layout to make it more practical.

The standard of the finish is very good.

They've obviously thought about what they've done.

New doors, new bathroom, new kitchen. Overall, very good.

Main selling strengths are the size of the back yard

and really impressive at the size of the bedrooms.

It would have been perhaps a bit better

if you'd knocked out the wall in-between the dining

and the kitchen and just opened it up a little bit more,

but apart from that, I think the layout is very good.

Yes, maybe they could have opened the kitchen up,

but it's also a balance between cost and return.

So have they got their figures right on a house

they've invested nearly 40 grand into?

So in the sales market I'd expect this three bedroom terrace property

to achieve 55 to £60,000.

I would put this property on at £65,000 to achieve £60,000.

Well, that gives us a net profit if we sold it of about 18,000,

which is good, we're pleased with that.

Net profit is the bottom line.

That's the profit you make after all the expenses have been subtracted,

so that gives them a nice bit of equity into their pension pot.

But for them the crucial figure is the rental value.

In the rental market, I'd be looking for this property to achieve

350 to £375 per calendar month.

I believe this property would achieve £400 per calendar month.

The values for rental are about what we expected

and that gives us a yield of about 9-10%,

which we're more than happy with.

In fact, if they get that top valuation of £400 per calendar month,

they might even achieve rental yields of around 12%.

So from a money-making point of view, this looks like a success.

What's next for Graeme and his colleagues?

We've bought one on the street opposite to this one

which is in a similar state of disrepair

and we're going to do exactly the same with that one as well.

The original plan is for ten years

and that's still the aim of this investment property business,

and hopefully it will let us all retire on a beach somewhere.

Yes, well, that would be nice,

but for the moment, sunny Doncaster will just have to do.

Strood in Kent was the place where we first found a two bed,

end of terrace house that had more of its fair share of problems.

Firstly, its location.

Well, it was not only next to a busy junction,

it also had a railway line running behind it.

And then, there was potentially some structural issues,

with a crack running down the front of the house.

On top of that, it was leasehold, quite unusual for a house.

But none of these things put off West London-based security guard

Daniel, who viewed this house slightly differently.

As soon as I saw this house in the catalogue,

-I just sort of fell in love with it.

-Why did you fall in love with it?

I mean, this is not everybody's dream.

The garden's quite big, you've got the whole side of the house as well,

and obviously inside, it isn't too major works to be done.

Now interestingly, you're not from this part of the world.

Why did you decide to buy here?

Mainly because the price was right.

Obviously when you live in London then prices just soar through the roof,

so I couldn't afford it, but the plan is,

live here for a year or two, see how it goes,

see how work goes down here, and then gradually move closer.

# Move closer. #

And purchasing further afield from London meant

he was able to buy this two bedroom house for £130,000.

He and girlfriend Kim hope that a budget of ten grand would be enough

and, with lots of help from his dad Ted

who's been in the building trade,

that he could turn it around in just two weeks.

This seemed like a mighty tall order considering he generally worked

for 72 hours a week in his security job.

Two months later, we're back with Daniel to check on his progress.

Wow! I like that. From the outside, it's now on the road to recovery.

Daniel's surveyor friend advised him the crack was superficial,

so that has now been repaired and new windows and doors installed.

Fencing now divides the outside space and in the back garden

there's decking and a new turf has been laid.

And inside...

Well, the new flooring and decoration really lifts the lounge.

And what about that kitchen?

In the kitchen, we gave the walls a fresh paint, the ceiling,

there's a new door. This part of the kitchen we've saved.

When we bought it, it was already here,

so that good cos we've saved some budget.

We've done floor and wall tiles and all of this side is brand-new.

And upstairs, the house continues to impress with

the two bedrooms finished off nicely.

And the bathroom's looking rather plush,

but it's the back garden that really caught my eye.

Outside in the garden, we have new decking, new grass,

a bit of a barbecue for the summer.

We've put all fencing all around to give a bit of privacy.

Daniel was really excited about tackling the garden

and the outside space, so was this his handiwork?

My dad done the majority of the work.

I couldn't do work due to unforeseen circumstances.

As an experienced builder, dad Ted was always going to do most of

the work, but Daniel had hoped to help out and learn new skills.

It seems that's not all that's changed in Daniel's initial plans.

Originally we were planning to move in,

but as the work was going on, my dad gave me a call

that someone walks past and noticed, I think it was an investor,

and he put an offer on the house.

Well, in fact, he's been offered £170,000 for the house,

and that just seemed too good an offer to turn down.

But is Daniel disappointed not to be making this his new home?

No, not really.

I didn't really want to move too far from my mum's anyway.

We've actually bought a flat in London, but with a mortgage,

so we get the keys on Friday.

Yes, it is understandable.

This would have been a big move away from friends, family and work.

# It's not right, it's not right for you

# If you really have to think about it. #

So perhaps getting a flat nearer home does make more sense,

but has this house helped to fund the flat purchase?

What we spent was 8,400, roughly.

8,400 sounds pretty good for all the refurbishment work.

Take a bow, Ted.

But it turned out there was a condition lurking in the legal pack

that added a rather significant cost.

When we actually bought this house, there was a shock

that we had to give 4% to the council straightaway,

which is OK cos we got it a bit under budget what I planned to bid

it for, but, yeah, I'll definitely next time read the legal pack.

Well, how many times do I say it? Read the legal pack.

And in this case, it cost Daniel another £5,200.

So including his £130,000 purchase price,

his total spend here will be just below £144,000.

But with one prospective buyer already lined up,

is there likely to be more competition for it?

What do two local estate agents think?

The property itself is actually quite nice.

It's all double glazed, it's got central heating.

I think it will make a nice purchase for somebody.

I think the property's a very smart, little house.

It's in a very busy spot, but it's also in a very convenient spot.

It has everything that you would need for a couple or a young family.

I'm not too sure about the location, to be honest. It's very busy.

We've got a railway line at the back

and a roundabout at the end of the road.

This particular spot is a major junction,

and that may have a detrimental effect on the appeal

for, particularly, buyers, not necessarily so with tenants.

Yes, this may suit an investor more who wants it as a potential rental

vehicle, with the agents estimating a monthly rental value of £825,

which would generate a yield of around 5%.

But with a £170,000 offer already on the table,

is that a good price for the house in this current market?

If I was asked to market this property today,

I would quote a figure of offers in excess of £165,000

and expect it to realise the figure of approximately £170,000.

I think a resale value on this property would be around £170,000.

And if that deal does go through, the agreed 170,000,

that could see Daniel with a pre-tax profit of just over £26,000,

and that will help towards his new flat purchase.

So what next?

The next thing is to move into our flat

and then go to the next auction and buy another one.

Well, it's always nice when an auction buy ends in a good result.

Yes, but as we've learnt over the years, that's not always the case.

Yes. Join us next time for more highs and lows on Homes Under The Hammer.

-Goodbye.

-Goodbye.

-Goodbye.