Episode 57 Homes Under the Hammer

Hello. If you're thinking about investing in your future, well,

property could be a great place to start.

Yeah, choose carefully,

buy wisely and you could be on the way to a healthy profit.

And one way you could do that is by heading down to your local property auction.

When you buy a property at auction,

you could be looking to do it up and make a fast buck.

Yeah, or maybe you're looking for more of a slow burn,

something that'll give you an income for years to come.

Yeah, so what did the buyers on today's show get

when they visited their local auction?

This hidden four-bed detached in Southampton is literally a cracking house.

That is one big, potential subsidence crack.

A two-bedroom mid-terraced cottage in Padfield, Derbyshire has some unusual views.

You don't see that every day, do you?

And in Eastbourne, East Sussex,

a flat above a cafe has its disadvantages.

-The first thing I notice...

-SHE SNIFFS

..is the food smells from downstairs.

All of 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.

You're all done. It will be sold.

Bassett is a desirable tree-lined residential suburb of Southampton.

It's great for transport links with easy access to the motorway.

Nearby, Southampton University has halls of residence here.

It also has a popular golf club too, so if you're a keen golfer,

well, the course is only a five-minute drive away from here.

So, this is a quiet residential area,

so it's ticking all the boxes for location.

The property I'm here to see is a four-bed detached house,

with a guide price of £300,000 plus.

Now, it's behind here somewhere, and the pathway's already blocked up,

so I'm going to keep walking to see if I can see anything at all of an entrance,

and here it is.

I'm going to have a look.

Wish me luck.

I wish I'd brought a machete with me.

I'm thinking no-one has lived here for quite some time.

Distinct smell of damp,

but a nice, big hallway all the same.

In here, a downstairs toilet and sink.

Wow, this goes all the way round the corner.

This would have been a dining room, I would think.

In here, living room. It's a nice, big space, this.

A couple of sofas in here. Chair, nice big TV. Lovely windows.

Some kitchen roll here on the windowsill, maybe just to soak

up some damp, or maybe just a bit of a makeshift draft excluder there.

Another big window over here off the lounge going into the back garden.

Looks like a bit of a jungle. It's like a viewing window at the zoo.

Oh, look. There's a snake, look.

Not really. There is a lot more to explore. I'm going to have a look.

While you take a look outside.

The growth around the house rendered it invisible from the road.

The auction catalogue merely showed the shape and size of the plot.

Believe it or not,

some of the undergrowth has been cut back to this state.

# Welcome to the jungle We've got fun and games

# In the jungle Welcome to the jungle

# Watch it bring you to your... #

Over to the other side of the house, into the kitchen, which is

a nice big space.

Very green, but get this cleared out, and get a nice, new kitchen here.

It'd be lovely.

Into here, just a bit of pantry space in there.

A serving hatch which would have gone to the dining room,

which I mentioned earlier.

And a bathroom downstairs as well, and a big bathroom at that.

Another toilet, so that's two toilets now on this floor.

The door going out on to the garden, or jungle as I like to call it,

into another reception room. This is amazing, this place.

There's so much going on. So much to see. Wooden ceiling.

Stone fireplace. Very dated. You'd want to change that.

A bit of a fire hazard as well.

And over here, there are some stairs over here.

I'm hoping these lead to a nice, big, warm swimming pool, but...

It's a double garage. Disappointment.

Although it has to be said, there's nothing disappointing about the size of that double garage.

OK, let's have a look upstairs.

Bathroom here.

First bedroom just there to the front of the house.

Crack here, which is not a good sign as you come upstairs.

One to the ceiling as well.

Bedroom two.

Now, if you thought that was a crack, have a look at this.

Look at that.

That is one big potential subsidence crack.

Now, you've got to get a structural engineer to have a look at that.

Whole of my hand. Oh! I can feel...

I think I'm tipping over cos it's that bad.

That could be incredibly costly. Get that sorted out as soon as possible.

And due to this potential structural issue,

the auction house advise that the property was only suitable

for cash buyers, as its condition meant it was unmortgageable.

The cracks continue in the largest bedroom of the four,

which does have the benefit of a stereogram so that you can

play your favourite album to take your mind off the cracks.

In the final bedroom, it seems there isn't a room upstairs which isn't affected by cracked walls,

but with four bedrooms sharing one bathroom,

perhaps a layout rethink is in order.

We called in a local estate agent to get his opinion.

It's very unusual coming to a property that you can't even see

from the road. I mean, the first hurdle was finding the property.

How would he react to find the small bedrooms with one bathroom,

and the snaking layout?

I would probably recommend making use of the area

here above the garage, and this family reception room.

It's really the case of probably extending the accommodation

into the upper part of the property above where we are now,

but hoping obviously you can still create two wings with decent sized bedrooms.

With a guide price of £300,000 plus,

what could the property be worth on the open market after refurbishment?

If someone was to completely renovate the property as it stands

without doing any additional building work,

I would look to hopefully achieve a figure in the region of £450,000.

And if extended according to your plan?

Once completely renovated, and extended and transformed,

I would look to hopefully achieve a value of somewhere in the region of £500-£550,000.

The agent thought the property could rent for around an average

of £1,400 per calendar month as a four-bed, and £1,700 as a five-bed.

So, there is a lot of house here, but there's also a lot of problems.

Those cracks are worrying,

but let's see who was brave enough to take it on when it went to auction.

Now we come to a good opportunity for in the builders to get

their teeth into, or a very handy individual.

This is a good lump of property in a very desirable area of Southampton.

What can I say on this? 280?

Hell of a buy at that. 280? 280 nice and promptly in the room.

It took a while, but eventually the bids passed the 300 grand guide price.

We rejoin the bidding at £325,000.

325.

Two.

327.

327. 328.

29.

We're down to the nitty-gritty. 329.

330. 330 I've got on the left-hand side. £330,000.

Your next-door neighbour's on for over 600. 330,000 then. First time.

330 for the second.

Third and final time.

Well done, sir. 330. That's yours.

And the successful bidders were husband and wife Mick and Penny,

who together with their two sons run their own building company.

They have over 20 years' experience,

and sound like the right couple to take this project on.

They join me back at the property to tell me their plans.

-Mick, nice to see you.

-Nice to see you.

-Penny, nice to see you.

-Hello.

Firstly, tell me about the auction.

It was the first auction I'd been to where we've actually bid with our own money,

so it was quite sort of frightening for us,

you know, because the property we went after, we didn't get.

-So, this wasn't the one you were actually went to auction for?

-No, it wasn't.

So, how did you come about getting this one, and not the one you wanted?

It was next in line on the catalogue, I think.

-And it was in a good location. We knew the area.

-Yeah.

So, we wrote some figures on a bit of paper,

and said, "Let's go that high."

And here we are, the owners.

-So, without seeing this property?

-Yes.

-Yes.

To be honest with you, we looked at it in the catalogue at home,

and we actually thought it was a building plot.

Because we've got quite a few building plots on the go,

we were interested, and when we were both sat in the auction room,

we said, "This is a house. It's not a building plot."

The picture they gave us, cos they couldn't get in cos of the garden,

it was just like a plot of land, showing the outbuilding.

We just said, "Well, it's a good area. Let's go for it."

-Now, when you actually walked in here for the first time, Penny, more so...

-She hit me. She beat me up.

What were your first thoughts?

It really didn't faze me because we have done these sort of things before,

and Mick and his team can do wonders for the property, they really can.

It has got potential.

We've got plans for it, so we hope to get five, six bedrooms in,

move the kitchen around and build above the garage

-and the existing second living room.

-OK.

If they don't come off, then we'll just knock it down and build a new house.

Are you happy to just total this and start again with what you've got?

The reason why we bought it, obviously, is for inside work,

because we carry ten men that desperate for winter work,

so if we do knock it down, we are back to square one. If it rains...

So the cracks didn't bother you at all?

There are some major cracks in this building.

-It doesn't seem to faze you.

-A bit of glue.

I think they have already tried that. DION LAUGHS

We are going to take all the ceilings down, first job,

and get the engineer and the architect in, have a look

and see what we've got.

But all the brickwork outside's fine,

so I'm hoping there's no underpinning.

The walls above where we are now, in the bedrooms,

they are solid walls and they're sat on the floor boards.

The engineer's report, due in a week or so, will determine

if the building is salvageable or not.

Assuming it is, what will Mick's team get stuck into first?

Everything...really.

-Everything?

-Everything. New central heating system straightaway.

Complete rewire, replaster, new ceilings, insulation.

Probably the wall ties in the cavity.

-I would say just about everything.

-Well...

-New windows.

Is that a total overhaul?

Yes, basically. We'd just have a shower

and then we'd put it all back together.

You know, if you're going to do it, do it properly.

Now, tell me about the double garage. What are your plans for that?

Yes, I want to go and build above it.

We want to put a master bedroom in there, with a walk-in closet

and a bathroom. Have vaulted ceilings in that area, so, yes...

-Grand designs here.

-Isn't it?

Yes, it is amazing. Over the dinner table, we have all these plans out.

He says, "Come and have a look at this, Penny, have a look at this."

But he's now given me a saucepan allowance,

because I burn so many saucepans talking about business.

-Because you've left it on the hob?

-Yes.

-Oh, dear.

-That's your fault.

-Yes, there you go.

So, Penny, I'll ask you, how is the dynamics? It is a family business.

-You've got your boys working for you as well.

-Yes, both boys.

One joined this year, one's been with us for five years now.

-We are passionate about building, that's what I would say.

-Yeah.

-OK.

So will you both be on site, will you be elsewhere,

will you be playing golf, will you be in the sun? What's your plans?

I'll be running the office, making sure they keep to the budget

and keep to the time schedule.

-They don't call me Moneypenny for nothing.

-I like that.

I'll be here every day, I would have thought.

Making sure everything is running smoothly,

and I'll just wander off to the golf course, like I always do.

The mission Miss Moneypenny will oversee is, either demolish a new build,

or renovate this house in four to six months, then sell on.

But as a backup, they have a portfolio of properties already,

and they would rent it out.

So given this could be a money pit for Miss Moneypenny,

how much do they plan to spend?

MUSIC: Diamonds Are Forever by The City Of Prague Philharmonic Orchestra

It is going to be in the £150,000 bracket, depending on what we do.

-That's an awful lot of money.

-Yes, it is.

You can do a lot of work with that sort of money.

So, guys, Mick and Penny, I wish you all the best.

-Thank you.

-I look forward to seeing how you get on.

-Thank you.

-Thank you. Cheers.

Mick and Penny don't seem fazed at all by a project of this size,

but a lot hinges on that structural engineer's survey.

Will we return to see a new property or a renovated property?

You can find out later on in the programme.

We head now to Derbyshire and the lovely village of Padfield,

which was a former home to mill workers of the cotton industry.

Nowadays it's a popular spot for commuters and first-time buyers.

So, this is Padfield, close to Hadfield, close to Glossop,

which is about 30 or 40 minutes away from Manchester by train.

Great little spot, very traditional terraced houses.

That's what I'm here to see.

Two bedrooms, guide price £80-£90,000 plus.

Great.

So, what have we got?

Well, straight inside and into your main living area.

A nice open-plan feel, which is good news.

Stairs leading up to your bedrooms there.

Wow, you're confronted by this fireplace! That is impressive.

Whether it is original or not, I don't know.

Maybe it is, it is gorgeous.

But it's a really nice living room, if you like, so a good start.

And then through here, under the stairs, into the kitchen.

That is basically it for the downstairs. Two rooms.

But they're a good size,

the kitchen obviously... could do with some units.

Things you might expect in the kitchen, like a sink.

But nice, old-fashioned sash windows.

Again, lots of light.

Yeah, it has got what you need, and it will immediately...

It is kind of quirky but lovely.

# I got what you need, babe.

# Take a chance and you'll see.

# You can get it from me... #

I know it's seen better days, but it is a solid little property

with a nice layout and good features.

Though some are better than others.

You don't see that every day, do you? A window.

Complete with a nice... What do you call those things underneath

windows? Whatever that is.

There. Halfway up the stairs. Bizarre.

MUSIC: A Room With A View by Noel Coward

The view is straight into the kitchen.

That is pretty weird.

So, up here, a reasonable sized bedroom to the back.

And then a large bedroom to the front,

but then another thing that's a little bit weird because...

The bedroom currently has two doorways. How very strange.

Bathroom at the back there, a little sink there. What is going on?

This is only a s-s-s... Uh!

Yeah, stud partition wall. So that would be easy to remove.

I think somebody was maybe trying to make a better integration of the loo

at some point, but whatever, you're going to have to fiddle about...

Another window in the middle of a wall! I've only just noticed that.

-Wow!

-HE LAUGHS

HE SIGHS

Anyway, a bit of playing around needed.

So, lots of work to do

and maybe a bit of reshuffling to get the most out of this property.

But the back of the property, it really is rather charming.

You've got a very small, little courtyard area there, and then

because of the layout of the houses, it's all sort of mishmashed together.

This cobbled area here is actually communal. It's really cute, though.

You can imagine some of your flowers growing in here.

One thing you do have, which is yours, is this little shed.

You know, rolling hills in the background, it is

so Last Of The Summer Wine, isn't it?

Absolutely glorious.

So, for a guide price of between 80 and 90,000,

you could be in with a chance of acquiring your own little

corner of beautiful Padfield, which sounds pretty good to me.

But will a local estate agent think the same?

Well, it is a nice little terrace house, basically.

It offers sort of two bedrooms

and a decent amount of downstairs reception space.

It's nice. The little bit of outside space as well.

I think it needs a kitchen, a bathroom,

just a bit of a renovation

top to bottom, but, yeah, it's a nice property in a nice area.

It certainly is. But what kind of values are we looking at

once the work has been done? Rental first.

So once renovated,

I think this property would rent

for £500 to £550 per calendar month.

And what about the sales market?

Once renovated, I think we would put it on the market for £129,000.

Well, I don't think it would be going over the top to describe

this little place as extremely charming.

It's just one of those properties - the area, the style,

the building, even inside - you just fall in love with.

Yes, it needs some work, but who cares?

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

This is £80,000 to £90,000.

Located within the rural village of Padfield

and yet still conveniently situated to the surrounding amenities.

Lounge, kitchen, two bedrooms and a bathroom. Who's here for this?

At £75,000, need a bid.

That's a bid at 75.

At £75,000, then, are we all done?

A flurry of bids, then, takes the price to £82,000, where we rejoin.

At £82,000, are we all done?

All done?

What are we saying?

What, 83?

83. 84.

85.

86.

87.

86 and a half. 87.

And a half.

88.

And a half.

89.

And a half.

90.

And a half.

Here at 90. First time.

Second time.

Third and final time, then, at £90,000,

selling away.

You, sir. Congratulations. Can I have your paddle number, please?

Getting the property at the top end of the guide at 90 grand,

with bidding help from builder friend Steve, was barmaid Rita.

And Rita, it turns out, has been cheating time

when it comes to that research thing.

# She's my sweet, sweet

# a'cheatin' Rita... #

-Rita, great to meet you.

-Oh, and you, Martin.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

-Well, I didn't, really.

-Oh, right.

-It came as an accident.

-Huh?

-I was looking on the iPad and I saw this property,

and when I rang up, they said, "It's up for auction."

"Oh," I said, "When's the auction?" They went, "Today."

I went, "And what time's that?"

They said, "Two o'clock." This was 1:10.

So they said, "Do you know where the City Ground is, in Etihad?"

I said, "Yeah, I've got a good idea."

So I gets in my car, goes there, and wallop hand up, gets this house.

-SHE LAUGHS

-That has got to be the shortest period of time

between discovering...

I didn't look inside, no, but I did bring someone to look at the roof.

-Not before you bought it.

-Before I bought it.

-I didn't look in it.

-How could you have done that in the 50 minutes

-you had between finding out and...?

-Because the guy that's the builder,

he only lives round the corner, rang him up. He's rained off.

I said, "Come with me, look at the roof in here."

And then I said, "I've no time to take you back,

-"you'll have to come to the auction."

-THEY LAUGH

-So that's what happened.

-So you had seen it from the outside, at least?

-From the outside, yeah.

-Right.

So what made you so determined at that moment?

I mean, most people would have gone, "Forget it.

"There'll be another house coming along at some point."

-Why did you...?

-I do things like that.

-Do you?

-I'm impulsive.

I knew the area, I knew where it was,

and I know the pub 25 yards up there, so I know it's a good pub.

-Right, that's important.

-So I thought, "Well, that's fair enough."

And get a train into Manchester, walking distance. That's not bad.

Stone house, looks all right.

My friend had bought one across the road.

Looked in that one, that was fine, so...

But there might have been another one coming up at another auction.

And this was at the right price, so couldn't let it go then.

-I was going to go to bid 105.

-Right.

And then it went to 90, and that was it.

Rita definitely doesn't let the grass grow under her feet.

She has, in fact, already installed that boiler.

So what is her plan for this house?

I've got my builders on, so they're going to put the new windows in,

kitchen, damp-proof, do everything like that.

Put floorboards where they need new...

-Moving a few walls and whatnot.

-Tell me about the wall moving.

Well, they're just studded walls between the bathroom

and one of the bedrooms that we're moving slightly

-to get a proper bathroom in.

-OK.

What's the plan for it? Is it to rent it out or sell it on?

Well, I need to have time out for myself,

so I want to take 12 months out.

So this was an opportunity for me to rent out,

to get the rent off it to bung my pension up to do this for 12 months.

Wow. Tell me what you're going to do in your 12 months?

I'm going to Australia for six weeks.

-I'm going on a cruise for 42 days.

-42 days? Wow!

-Yeah.

Like, six weeks. And then I'm going to...

I've got a property that I'm renting next year in Spain

off a friend of mine, so I'm going to stay there for about six months.

Why this year? What's the celebration, or what's the reason?

-I'm 65, so I've got to do it now. It's my bucket list.

-Is it?

THEY LAUGH

I'm 65 this year, so if I don't do it now...

Rita plans that work here will take 12 weeks

and has a budget of £15-20,000.

She'll live in it initially, and then will be renting it out

while she goes gallivanting all over the globe for her year-long soiree.

Good plan, Rita!

# Cos I took a long look at my bucket list

# And whoa-oa-oa-ooh

# I'm running out of time... #

Will you get your fingers dirty, your hands dirty?

Oh, yeah, I'll be doing the shifting and the mucking and whatnot.

Helping with the decorating.

And then when you go on your travels and your great big adventure,

-are you going to rent it out, then?

-Yeah, rent it out.

-And then when you come back, will you move in here?

-Yeah.

Properly settle down. I don't know whether I'll stay here,

-but I will move back year.

-Right.

Well, congratulations with the house

-and good luck with your year of adventure.

-Yeah, thank you.

-Look forward to seeing how you get on.

-Thank you very much.

-Nice to meet you.

-You too.

-Thank you.

Well, Rita adopting a slightly unconventional attitude

towards buying at auction!

50 minutes before the auction - not ideal.

Don't do what she did.

But it seems like she's got herself a really good property here,

and what a fantastic year she has ahead. How will that go?

How will the house turn out? You can find out later in the show.

Coming up, something for nothing -

the rent from two cafes in Eastbourne produces a welcome bonus.

Basically I'm left with the flat for free.

And in Derbyshire, what has Rita learned about buying at auction?

Make sure you go in and look round first.

SHE LAUGHS

We're going back to Bassett now, just north of Southampton,

where earlier, I discovered a house hidden by a jungle of undergrowth.

It had been left empty for some time,

and cracks had more than begun to show, making it unmortgageable.

Crack here, which isn't a good sign, as you come upstairs.

One to the ceiling as well.

Now, if you thought that was a crack, have a look at this.

Look at that.

That is one big crack.

The cracks in this four-bedroom detached house didn't deter

Mick and Penny, who own a building company.

They bought it for £330,000, plan to refurbish and sell it on.

But at first, they weren't even going to bid.

We actually thought it was a building plot.

Because we've got quite a few building plots on the go, we were interested.

And it was when we were both sat in the auction room, we said,

"This is a house, it's not a building plot."

We just said, "Well, it's a good area, let's go for it."

Hoping to get five, six bedrooms, move the kitchen around,

build above the garage and the existing second living room.

-OK.

-If they don't come off,

then we'll just knock it down and build a new house.

And 10 months later, when we returned,

it looked like Mick had done just that.

The once '50s throwback hidden by its own grounds

has become the best house on the street, and for me,

it's definitely a case of love at first sight.

# Oooh-oooh, hey, hey

# Looking for

# Looking for love again

# Oooh-oooh, hey, hey... #

Having had four - yes, four - extensions,

it's difficult to compare this to its ancestor.

But I do like a challenge.

Remember the back of the old garage?

It's now a dining room.

It overlooks a fabulous high-spec kitchen,

and like every other room in the house,

it now has a different purpose to the one it started with.

The old kitchen is now a study

and downstairs toilet.

And the area that was a downstairs bathroom is now a utility room.

# Oooh-oooh, hey, hey... #

Upstairs now to the five bedrooms.

The house comprises of two wings.

In this wing, there's an en-suite bedroom...

..and three smaller bedroom served by a family bathroom.

It's hardly surprising that most of the rooms aren't recognisable.

The extensions have taken what was a 2,000 square foot house

up to 3,500 square foot house.

In the other wing above the kitchen, there's a master en suite bedroom.

# Looking for

# Looking for love again. #

And finally, the games room cum home cinema.

The structural engineer found that most of the cracks

were caused by failing wooden lintels above the windows.

He gave the go-ahead to refurbish, but there were some planning delays.

We had no complaints, so they made us wait another two weeks,

so they could actually ask the neighbours again,

which was unusual. Very unusual, really.

I think it's enhanced all their properties,

and lots of neighbours have had the guided tour,

so they're all very pleased with the end product.

Once underway, how did the timescale match up

to the original estimate of four to six months?

20 weeks the lads have been on-site.

20 weeks! That's amazing.

How about the estimated budget of £150,000?

The figure is just shy of 300,000

that was spent on labour and materials.

Whoa, that's not good.

100% overspend? What's been going on?

All the specifications of the tiles, the kitchen, the bathrooms,

have all gone up a couple of pegs, you know,

to justify the area that the house is now in.

That was our decision.

Well, let's hope it was a wise decision.

We called in two local estate agents to find out.

Mick and Penny paid £330,000 for the property,

with another 300 grand refurbishing it.

Let's start with the agent who saw the property before.

The changes they've made since I last saw it - it's amazing.

I mean, from when you were initially first here,

you could hardly even see there was a house.

The level of work that they have done is fantastic.

With the extensions and the modifications they've made inside,

they've made a really spectacular house.

Amazing property. They've done a fantastic job

getting it to this level. The specification

is one of the best I've seen in recent years.

Are there any negatives regarding the refurbishment?

I think potentially losing the garage

might have been a slight gamble.

But saying that, the dining room that they've created

is really, really nice.

It's purely just at this end of the market, I do imagine somebody

might have a fairly nice vehicle they'd like to tuck away.

It's missing a garage. If someone's got two classic cars

or three motorbikes or something like that,

they might not buy it because of the lack of a garage.

Mick and Penny bought purely to sell on,

so having spent 630 grand in total, what's it worth?

I value this property at £750,000,

and would go with a guide price of £760,000.

If the property was to be marketed,

I'd recommend an asking price of £800,000.

Wow. At that top figure, that's a potential profit

of 170 grand before taxes and expenses.

What does Miss Moneypenny think about that?

779,950 is what I was hoping for.

Yeah, I mean, either of those would be good.

But, yeah, the higher one sounds great. Yeah, sounds good.

-Gives us a holiday, doesn't it?

-Yes.

A well-deserved holiday, too.

How about some tips for the viewers who want to emulate your success?

Have the right trades is very important.

A good architect. And know the area you're building in.

That's really important.

That, and a bit of luck finding a hidden gem.

Eastbourne in East Sussex has been a popular seaside retreat

since Victorian times, with tourists flocking to its piers,

promenades, and for a paddle in the sea.

# Grab yourself an old suitcase

# If you need to get away

# I can show you the perfect place... #

Well, this area is known as Little Chelsea.

It's kind of Eastbourne's equivalent of Brighton's Lanes.

Lots of sole traders.

You've got restaurants, cafes - there's a real buzz here.

The railway station is 150 yards away in a great location,

and the seafront? Well, it's literally just over there.

But I've not come to dip my toes at the beach today.

I'm here to whet my appetite for a complex lot

of commercial and residential.

Guided at 245-255,000,

this lot is made up of a two bed flat

and these two commercial premises.

But that's not all.

You also get the freehold of another shop

and another two bed flat that you can see on the right-hand side.

Certainly a complex menu of properties.

But mouthwatering, I'm sure you'll agree.

Let's find out what you get, then, starting with the two bed flat.

So straight into the flat, you've got these little stairs here,

and I won't lie, the first thing I notice...

-SHE SNIFFS

-..is the food smells from downstairs.

But there's got to be some sort of pay-off, hasn't there?

And I think it's because - look how spacious this flat is!

A landing with all the rooms going off.

That is a huge bedroom.

You know, I can imagine tenants not arguing over which room

they're going to have,

because that is also an even bigger bedroom than that one.

You've got quite a small kitchen through there, so you could

potentially think about swapping the kitchen for the bedroom.

There's all sorts you could do. The bathroom, again, is humongous.

And then right through here, at the front of the property,

you've got the sitting room area.

Again, a fantastic space.

There's a little bit of character here.

I mean, I think this is a really great flat.

I can see it renting like that, because look -

you're right on the high street.

Chinese, deli, Thai.

You've got little cafes over the road.

I think I'd quite enjoy living on this high street.

It's all going on.

# Hey, I put some new shoes on and suddenly everything's right... #

Ooh, yes, feeling chipper and on my way to strut down the high street,

I find the source of the food smells -

two nice little eateries that each rent for £10,000 a year.

A good investment. The downside is,

they might make getting a mortgage on the flat tricky,

affecting its value and narrowing the appeal.

At the back of the shops and the flat,

there's a very pleasant courtyard, and from here, you can better see

the other shop and the other flat which you only own the freehold of.

All good so far. And crystal clear?

So let's just be clear about this one, if possible!

With this lot, you also own the whole freehold only

of this building, earning you a ground rent of £150 per year.

Now, it would be normal in most leases for commercial

and residential properties that the landlord would manage

the repairs and the decor and recover that money from the honours.

However, sometimes the tenants just don't have the cash,

so it can leave you a bit high and dry.

Leaky roofs, broken guttering or subsidence

all need to be attended to if you're the freeholder.

Owning a freehold property is...

Well, it's just like being a landlord, I suppose.

So in this case, for 150 quid a year,

is it really worth the hassle?

Why not save yourself the hassle

and sell the freehold of this shop and flat?

Surely the investment potential here is in renting the commercial spaces

and the other flat we saw.

One way to know its true potential is to ask a local property expert.

Firstly, what would he do with the freehold properties?

For £150 a year, it's just a nuisance purchase.

What will almost certainly happen is that he will offer

the freehold to either one or both of those tenants,

and they might or might not want to buy it,

or they might or might not be able to afford to buy it.

If they don't or can't,

then he may well put it on the open market in an auction,

probably a guide price of £2,000, £3,000, something like that.

And fingers crossed he'll get rid of it.

So you could get a few grand for those freeholds.

Well, that's a decent start.

The agent notes that the two shops are on fixed leases,

so you can't change that rental income in the short term.

And with mortgageability problems with the flat above them,

perhaps it would be better rented.

So what could it achieve on the rental market?

The shops, they're fixed for the time being, so that's 20,000.

On this flat, once you've actually improved it,

you're going to be just short of 700 a month.

That 8,400 a year.

So 28,000, 28,500 is the sort of income

I expect this to be earning when all is said and done.

If you got the lot for the guide price of 255 grand,

that could be an 11% yield on the block.

The agent thought the flat could sell for 125,000,

though you'd probably be looking for a cash buyer.

There's so much going on here, but broken down, what have you got?

Well, I think it's a very lucrative little lot.

You own the freehold next door, you've got two shops,

which at the moment are rented out and run as restaurants.

Then you've got the two bed flat upstairs which you can renovate

and rent out, or even sell on to a cash buyer.

Let's see who spotted this fantastic opportunity at the auction.

We're going to go on to lot number 81.

With a guide price anywhere the lot's of interest, 250,000.

Massive return on this one. 250,000 anywhere?

Give me 240 to start it, then.

240,000. 240 I've got.

And five? 245.

And 250? 250.

And five?

250 I've got. 255 I'm now after.

We all done at 250 in the middle row?

252 I'll take if it helps.

252, back to the main bidder.

255? 255.

257?

Are we all done at 255? Sure you're out in the back right?

It will be sold at 255, make no mistake.

255,

the gentleman sitting down, for the first time, then.

255, for the second time.

Third and final time at 255,000.

If you're sure and you're all done, it will be sold.

Yours for 255. And your number is?

Giving it a very big "yes!" on getting the lot

for 255 grand was Anthony.

He's a former PR for property developers,

and has plenty of experience in renovating himself.

But what did he have planned for all of this?

-Anthony, congratulations.

-Thank you very much.

-Lovely to meet you today.

-Very nice to meet you.

Right, so you've got a bit of a selection of bits and pieces

-all thrown into this one lot.

-Yes.

-Talk me through them

and why you felt it was right for you to bid for this.

So the lot that I've bought consists of

two restaurants with a flat above it.

Which is this flat upstairs, which is fantastic.

Which I have the whole freehold of. So I own those outright.

And there is also attached to those another shop

with another flat above it, for which I only own the ground rents.

So they provide a very, very small income.

Now let's talk about the ground rent opportunities. How do you see that?

Is that something worth holding on to for you?

-Do you think that got thrown into it?

-Yeah, I don't want it,

because basically it's more aggravation than it's worth.

The ground rent is £150 a year,

but I'm still responsible for that building.

I'd just much rather be rid of them,

and if I get £2,000 or £3,000 from them, selling them,

then fine, but not really bothered about that one.

Anthony plans to sell the two freehold-only leases,

preferably to the residents of the flat and the business.

But what was it that attracted him to this lot?

It's a lovely flat, but I think

it was the whole that was important for me.

Because it meant the two restaurants are on long ten-year leases,

and therefore have a guaranteed income.

That income more than pays for how much it cost me to borrow the money.

Much more than pays. So I'll have a little bit of spare income

from that, which is covering everything,

and then basically I'm left with the flat for free.

So the idea is, do it up to a reasonable standard,

-and then look for, in all opportunity, a cash buyer.

-That's good. I was a bit worried then

that we might come back and you might not have done anything, and it might have been sold!

-So at least we're going to have something to see.

-You might!

So you are looking to make changes here?

In a word, it's not worth doing too much. If this flat was in Clapham,

you could see it would be very easy, you'd maybe chop it into

three bedrooms, put an en-suite in the room we're in at the moment.

But here, it's just not worth it.

Experience and research look to have really paid off here.

Anthony knows how to make this project work for him.

He plans a four to six week renovation.

But what budget has he set?

About, sort of, 15,000, I think.

-That's quite a healthy budget, I'd say.

-It's quite a healthy budget, but I think you've got to put in

a reasonably decent kitchen, and I think people want that now.

And a nice bathroom. And as you've seen,

-a lot of tiles need to go in that bathroom.

-Yes, that's a big old bathroom.

Half the budget is on tiles in the bathroom, I think!

You see, now, I'm going to talk to you about that. I would just do an area around the bath.

I definitely don't think you need to do the whole room.

No, I think the plan is, I'm going to build

a slightly false floor in there. So you'll step up.

So there'll be an area, almost like an entrance area to the bathroom,

and then you'll step up into a totally tiled thing. There are bits of things we have to do,

but it's not massive. There's nothing structural, I'm not going to be messing around with the walls

-and things like that. So I'm very pleased.

-So if you do manage to sell the lease,

you manage to sell the flat, you just don't have to do anything

apart from sit back and wait to be paid

-as a landlord from your two businesses.

-Yeah, that's right,

and I'll have a big chunk of capital to put into the next project.

It all seems to be going too well for you at the moment.

-You do worry, don't you?

-I am very happy for you.

-Thank you very much.

And it'll be interesting to see what happens and the outcome when we come back.

-But good luck.

-Thank you very much.

-And we'll be back to check up. Good luck. Thank you.

Well, Anthony seems very pleased with himself,

and so he should, because research really did pay off,

and I think he's come out on top here.

But will he have sold the flat and the lease next door

before we've even had a chance to come back here?!

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

So, we've seen the results of one of today's properties.

What about the other two?

Yeah, have there been a lot of changes or are they exactly the same?

Let's find out.

It's back to Derbyshire now, and the lovely little village of Padfield.

It was in amongst the rolling hills and stone terraces

that I came across this two-bed property

that had a guide price of £80,000-£90,000.

Plenty of work was needed in this property,

but I could really see the potential here, despite some,

shall we say, visionary decorative choices?

You don't see that every day, do you?

A window.

'Yup, affording a very nice view of the kitchen,

'and upstairs, there was a further glaring, glazing gaffe.'

Another window in the middle of a wall. I've only just noticed that.

Wow.

Plenty of people on auction day could see through

the decorative decisions and identify the property's potential,

with it eventually selling for £90,000.

Selling away to you, sir.

Congratulations.

Enlisting the help of her friend and builder Steve to do the bidding

was barmaid Rita, who, it must be said,

hadn't exactly done her research.

Tell me why you wanted to buy this place.

-Well, I didn't, really. It came as an accident.

-Oh, right. Huh?

I saw this property, and when I rang up, they said, "It's up for auction."

Oh, I said, "When's the auction?" And they went, "Today."

I went, "And what time's that?"

They said 2pm. This was 1.10pm,

so I gets in my car, goes there, and wallop,

hand up, gets this house.

Yes, with barely a second thought, Rita had bought the house unseen.

With retirement and a long list of travel plans on the horizon,

Rita planned to use this property for income to fund her trips,

and as a base to come back to.

It's now eight months down the line

and time for us to see how Rita has got on.

MUSIC: A Change Would Do You Good by Sheryl Crow

-# A change would do you good

-A change would do you good

-# I think a change

-A change would do you good

# Would do you good

# A change would do you good

-# A change

-A change would do you good

# Would do you good

# A change would do you good

-# I think a change

-A change would do you good

# Would do you good... #

Wow. Contemporary, slick, and at the same time, cosy and inviting -

the downstairs, from top to bottom, is transformed.

Upstairs, and the excellent transformation continues,

with Rita moving the partition wall

to create a bigger bathroom, complete with shower and bath.

-# A change

-A change would do you good

-# Would do you good

-A change would do you good

-# I think a change

-A change would do you good

-# Would do you good

-A change would do you good...

-#

I know it's a cliche, but I'm going to say it anyway -

this house has become a home.

The back has been spruced up,

and the front has also had a bit of polish,

and is welcoming and appealing.

Time, I think, to hear from the lady herself.

Well, it'd had new windows, new boiler, new heating,

damp-proof, new plaster, new ceilings,

as you can see, everything...

New flooring's in some of the places,

moved a wall upstairs,

done all the bathroom...

There was a big airing cupboard that was fully bricked

that had to be knocked down.

There was, like, a shower in the big bedroom that had to be

knocked down, so...

Yeah, and the kitchen - that all got knocked out.

Brand-new kitchen, new bathroom.

Mostly everything, really.

All-new skirting boards - had to be replaced.

I'm happy how it turned out. It's...

you know, turned out better than I thought it would do,

with the kitchen and the bathroom.

It's turned out quite good.

Quite good. Well, Rita is a good northern girl,

and not one to blow her own trumpet, but I'll say it -

she's done a fantastic job and should be very proud.

She was planning on going on a long holiday,

but those plans are now on hold,

with Rita quite happy to live in the property itself,

and decide whether to rent, sell or continue living here

further down the line.

The project has taken her to £19,000 -

a little under a maximum budget - but I'm glad to see the money was

found to repurpose the window at the bottom of the stairs.

There were unforeseen circumstances that extended Rita's timescale.

Well, it should have been about 12 weeks, but the snow came,

and I couldn't get to the house, obviously,

and then I had to change and find other builders.

It turned out OK.

I just did a bit of delegating.

Renovating a house can be full of unforeseen challenges,

but thankfully, in this case,

Rita's been able to roll with the punches

and taken to the art of delegation like a fish to water.

So, with Rita investing a total of £109,000,

and unsure whether she'll rent or sell in the future,

let's hear the thoughts of two local estate agents.

So, before this went to auction, we actually marketed this property,

so I am actually aware of the property, and to be honest,

from what it looked like then to now, there's no comparison.

The standard of the finish in the property is absolutely fantastic.

Again, the kitchen and bathroom to a really high standard,

which is what everybody's looking for now.

It's done to a really, really high standard,

but I think it should have a, as I say,

quite a wide appeal in terms of the audience,

and I think the potential buyer would pay a premium for...

due to the standard, really.

The agents are impressed,

but will they impress Rita with their valuations?

Rental first.

In the rental market,

this property should achieve £550 per calendar month.

In the rental market,

I think this property could achieve £575 per calendar month.

If we took that top valuation,

it would mean a healthy yield of just under 6.5%.

So, what about resale?

I would suggest in the sales market,

for this property to achieve between £125-£130,000.

In the sales market,

I think this property could achieve between £125-£130,000.

So, if you were to sell for £130,000,

that would mean a very nice little pre-tax profit of around £21,000.

Whilst Rita has enjoyed the experience, she has one piece

of very important advice for anyone thinking of buying at auction.

Make sure you go in and look round first.

Now, back to Eastbourne in East Sussex,

and if I were you,

I'd get a pen and paper ready to take down some details,

because earlier,

I looked into a complex arrangement involving three shops and two flats.

Now, the lot was bought for £255,000 by Anthony,

who explained the finer details of the deal.

The lot that I've bought consists of two restaurants with a flat above it,

so I own those outright,

and there is also, attached to those,

another shop with another flat above it,

which I only own the ground rent, and they're on long leases,

so they provide a very, very small income.

Much clearer.

So, Anthony was intending selling the freehold of next-door's

shop and flat, for which he only gets a small ground rent.

Hopefully, to the existing tenants,

leaving him with just two shops - currently restaurants -

and a flat above.

The two restaurants are on long, ten-year leases,

and therefore have a guaranteed income.

That income more than pays for how much it cost me

to borrow the money, and basically, I'm left with a flat for free,

so, the idea is, do it up to a reasonable standard,

and then look for, in all opportunity, a cash buyer.

With it so far? Good, because from here on,

-it gets complicated.

-SHE GIGGLES

Anthony budgeted £15-£20,000 to do up his free flat,

and thought six to eight weeks would see it completed.

Well, we're back after eight weeks to see what he's done.

Well, the bathroom's a definite improvement,

with a brand-new suite and tiles, and the pea-shaped bath

makes the most of the room's long, narrow shape.

The kitchen as was had seen better days.

Now, new units, worktops and sockets have rejuvenated the space,

to say nothing of the marble tiles,

which could be for a high gloss and a high-class finish.

With a few final electrics to sort out, and some new carpets,

Anthony has plenty of choice about what to do with his properties.

Remember the two shops below?

So, he could rent or sell the flat on its own,

sell both commercial units and rent out the flat,

rent out the flat and sell one of the commercial units..

-SHE YAWNS AND HER VOICE ECHOES

-..or sell both commercial units.

I told you it was going to get complicated.

I hope you were paying attention.

But before we deal with the sticky topic of valuations,

you can put your pen and paper down now,

because here's Anthony to explain some of the refurbishment issues,

like the problematic bathroom.

The problem is that it's in the middle of the house,

so it's quite a way from the actual bath to

the drains on either side of the house,

and we had to raise the whole floor,

so we put a false floor in the bathroom first. Excuse me.

PHONE PLAYS OPERA MUSIC

I bet it's just...

Hello? Hello?

-SHE CHUCKLES

-That's OK.

We'll carry on without you.

So, the full floor in the bathroom meant the bath could drain better,

but that wasn't the only plumbing issue,

as Anthony, who's now finished his call, can explain.

Instead of using elbow joints in the plumbing,

they'd just bent the pipe,

so of course, when you moved it, that split,

so we did have to pretty much replace all of the plumbing.

Seeing as I own the restaurants below,

it was pretty important that we had all that done,

so that was the, really, only job that I didn't foresee.

So what impact did the unforeseen job have

on Anthony's £15-£20,000 budget?

£16,250 is where it comes in,

but that counts all the auction costs and finance costs

and everything within that, so that's absolutely everything.

Originally, the plan was to renovate and then sell -

is that still the case?

We're going to rent this out - keep it.

Erm, I think it'll be a great little rental income,

and actually, with the shops, you get... The return is amazing.

That's the right answer, Anthony,

cos it doesn't half simplify the valuations.

We're dealing with two existing rentals on the shops,

and an unknown rental on the flat, but before that -

what's been the best thing about the refurbishment?

I think just seeing the thing come together.

You have an idea that it's going to be nice, working on it,

but actually, when you see the kitchen and bathroom,

which are the ones that are the big transformations...

And everyone who just pops in and sees it

seems to be very pleased with it, so let's see what the agents say.

Indeed, with Anthony's permission,

we called in two local estate agents

to get their opinions on the work and their valuations.

Anthony's already offered the freehold on the next-door

properties to the sitting tenants, so we'll keep that separate.

It's my second visit to the property,

and obviously it's changed a fair bit since I was last here.

The most noticeable thing being that you can see straightaway

that it's been decorated now,

and it's got a new kitchen and bathroom,

erm, so it's much improved.

I feel the property's been finished to a very good standard,

which would work well for sales and rentals.

Somebody looking to increase their portfolio,

to purchase the property for a new buy-to-let property,

would be absolutely perfect.

Anthony paid £255,000 at auction,

and he spent £16,250 refurbishing.

Ignoring the fact that he's been getting a rental income

from the shops, his total costs are £271,250,

so what would the flat rent out for?

I feel, the flat, in today's market,

would achieve somewhere between £695 and £725 per calendar month.

I'm thinking that, for the flat which we're in now,

the rental which could be achieved -

it would be about £725 per calendar month.

Taking the higher figure, that's £8,700 per annum,

added to the £10,000 per annum rent from each of the two shops,

gives a yield on Anthony's investment of just over 10.5%.

Yeah, I might have thought a little bit more than that,

but they're the experts, so, sort of, £725, we would take.

The agents went on to value the sale of the shops and the flat

at a top figure of £400,000,

which would give Anthony a total potential profit, before taxes,

of just short of £129,000.

Well, obviously, I mean, that's...

400 is...would be fantastic,

given that I paid 255 for it, so...

Erm, then, then, lovely.

Erm, you've still got to get it, haven't you?

Pragmatic to the end,

and Anthony's learnt a thing or two from his professional builder.

When we took the bathroom tiles off, for instance,

I was there with my flat chisel and a hammer,

and the chap had just moved in with what looked like some, like,

pneumatic drill, and he took every tile off in about ten minutes.

I'd earmarked the day for taking the tiles off, and he just went...

Dug-a-dug-a-dug-a-dug-a!

..and they were all gone,

and, of course, that's not something that you see on the normal,

sort of, DIY programmes, and it made such a difference.

I've got a feeling that Anthony will be using that

on his next renovation.

I hope those buyers and their stories have inspired you.

Are you packing up and heading off to the auction right now?

Or maybe just staying at home?

No worry, either way, because we'll be back with more

stories from the auctions here on Homes Under The Hammer.

-Goodbye.

-Bye-bye.

-Goodbye.