Episode 63 Homes Under the Hammer

Now, one thing we all love when travelling around the country

is that every single property has a different story to tell.

Yeah, and if you know what the story is within your area

regarding property, it's a great start.

Yes, and getting local knowledge can really make all the difference.

And then, head down to your local property auction.

Once you've decided to buy a property at auction, go and see it.

Then, read the legal pack and then, do the rest of your research.

Let's hope that's what today's buyers did.

Shall we have a look and see what they went for?

In a Staffordshire house, I'm really pleased about a room I can't see.

Which is great news cos it means, hopefully, it's upstairs.

Whereas in a South London flat, it's what I can see that excites me.

Just above the tree tops...

I can see the London Eye.

But in a Derby house, I really think you can see too much.

If you can still see me...

..you're going to need to change these doors.

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, sir. Well done.

I'm in Staffordshire and west of Newcastle-under-Lyme

in the suburban town of Silverdale.

It's a very short distance from Keele University

and as you'll know if you're a regular viewer,

proximity to a university can be ideal territory

for property investment.

Walking down the street, you really feel like you're part

of Britain's industrial heritage.

Classic houses built for the workers in this part of the country.

And they are good, solid homes. I love the brickwork, for a start.

This is the one I'm here to see.

£55,000+ was the guide price.

End-terrace, three bedrooms. In we go.

Ooh. Nice bit of original tilework on the floor there, which is good.

Oh, and an original door here as well.

You know, I just see a door like that and I think, "Strip it back."

Get it dip-stripped or whatever

and, you know, under there there's a lovely old pine or whatever.

That'd be such a lovely, warm feature to have just there.

Talking of warm, good news.

Looks like we've got some kind of central heating.

Old radiator, that probably means the rest of it needs

to be checked out, but you know, not bad.

The stairs up to your bedroom there.

Small, sort of front sitting room,

which looks like it's been laid out to be a bedroom there.

And then moving on through the property to a rear living room.

I like the brickwork being carried on under the fireplace there

and the nice doors out to the garden.

And then through to what would have originally been,

I guess, where the end of the house would have been,

some kind of extension built on housing a kitchen.

Now, the good news is the kitchen is really nice.

It's a kitchen/living area. I like the Belfast sink.

It's got a nice feel to it in here.

And so far, I haven't discovered the bathroom and toilet,

which is great news cos it means, hopefully, it's upstairs.

The layout suggests that this place has been let out

to students previously.

It is, after all, only a few miles away from the university

and letting a house on a room-by-room basis

can be very lucrative.

But do remember, you have to factor in any safety regulations

your local authorities set.

Well, upstairs and at the back of the house,

a large double bedroom there

and then joy of joys, look at this.

A really nice-sized family bathroom with a bath and a separate shower.

It's not in the best of conditions, but you know what,

it is at least exactly where it should be, which is here upstairs.

# In my place, in my place... #

Yes, a good-sized bathroom is always an asset.

Plus, the double room at the back here is a great size,

although the same can't be said for all the bedrooms.

Well, at the front of the property upstairs,

there would have originally been one bedroom,

but to cater for the student market

and to increase the number of bedrooms in the property,

this one bedroom has been divided into two -

one on this side

and another one here.

And as you can see,

they've achieved that, really, just by splitting down through the window

at the front.

A bit small, but you know what? It sort of works.

These rooms are very small,

but there's a decent shared area downstairs in that dining kitchen.

There is some outside space too - a little courtyard.

It does need some work, but I think this could be a very good investment

if you've got it for anything like

that £55,000 guide price.

We asked an agent from the auction house who sold it what he thought.

The property is a bit tired.

It's previously been used for student accommodation

and that shows. And it lends itself

well to student accommodation

given the proximity to Keele University.

It would also lend itself well to private rental as well as resale.

So there's options here, but it does look like rental of some kind

is the most likely.

So, let's hear those rental valuations.

On the private rental market, this property would achieve

somewhere in the region of £450 per calendar month.

Though, if you were to rent it out to students,

I'd be expecting to achieve somewhere in the region

of £8,000 per year.

Either way, you'd be commanding pretty impressive yields

if it were bought for anything like the guide price of 55,000.

But what about the resale valuation?

Should the property be modernised

and brought up to a reasonable standard,

I'd expect to place this property on the market

somewhere in the region of £85,000.

So, a bit of a quandary with this one.

How much work do you actually do to get it up to scratch?

Whatever, I think it's a really good investment,

particularly as a possible student let.

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

It's a spacious end-terrace house.

It's three bedrooms, two reception rooms

and it's in a convenient location.

Guiding at 55.

Going to say 50 to start. 50 bid. Thank you. At £50,000.

Going twos on this. Bid is at 50,000. 52.

54? 54. 56.

I'll take ones now, if it helps.

You are in at 57. 58.

New bidder, 59,000. At 59,000.

60?

No, 59. 60.

60,500. 61? 61.

61,500.

62?

No. At £61,500 and standing left, no mistakes.

I'm selling it then at 61,500.

Another 500 anywhere else?

If not, 61,500, once.

61,500, twice.

Third and final time at 61,500.

-HAMMER BANGS

-Your lot, sir. Well done.

After a stop-start auction, the winning bid of this 61,500

belong to local man Ian.

Software engineer Ian has only recently started dipping his toe

into property developing.

So, I'm interested to hear what he has planned.

-Ian, good to meet you.

-And you.

-Congratulations.

-Thank you very much.

-Tell me why you wanted to buy this house.

Well, I'd seen it in the e-mails that I was getting from the agent

and it looked interesting straightaway.

I could see it was a three-bed,

Italian upstairs bathroom.

It's in quite a good location here in Silverdale,

so, yeah, I was interested in it straightaway.

With a view to what? Buying it for what reason?

Well, I could tell it probably needed some renovation,

work doing, so I wasn't totally sure what to do with it at first.

But I knew there were, obviously, options

to get it renovated at first.

And then either see what...

letting yield it would give me or if the valuation was good,

-sell it on for...

-A bit of a profit.

-Yeah, a little...

hopefully, a little bit of a profit, yeah.

So, what about visiting the property?

Well, I hadn't actually been inside the property before the auction.

-Tut-tut.

-Well...

I was very just...very limited on time, really.

So I just couldn't get to the viewings,

-but a couple of friends of mine...

-Ah.

-..came to have a look.

-Right.

So, a good friend of mine gave me a ring and said,

-"Look, we are not going to go for this one, so you can."

-Right.

Had you read the legal pack, though?

-I hadn't actually read the legal pack.

-Oh!

One thing I did get done was a mining search

-with this being a mining area.

-Yes.

So, again, my friends got that for me,

but it didn't come up with any problems,

so once I'd seen that, I was happy with that.

Well, he broke a couple of Hammer's golden rules,

but at least he got that mining report done.

It checks for any safety concerns

relating to an area that was close to mines

such as subsidence and gas emissions.

So, with that complete and there being no danger

of it falling down a mineshaft, what are Ian's plans?

So, tell me what you're going to do then to sort the house out.

So, I think... Well, first off will be the doors and windows.

I'll get some people in to give me some quotes on those,

so get those done first.

I've got a friend of mine coming to look at the kitchen.

Probably look to get that completely replaced.

Upstairs bathroom?

I'll...get another friend of mine to come in and have a look,

but I think it looks...largely OK.

-OK.

-So, it will certainly get a good clean,

and then have another look at it.

If some stuff needs replacing, then yes, I'll get that done.

And then you've got this interesting layout

with the two bedrooms at the front where the was originally one.

What are you going to do about that?

-Well, we'll certainly keep that as it is.

-Right.

Yeah, I've got no plans to take any of that out.

-So, we'll keep it as a three-bed.

-It is three beds, yeah.

I mean, theoretically, you could have this as a four-bedroom let,

couldn't you? Cos you could use the front room as a bedroom.

Yes, that's another thing that attracted me to the property

-is that it had been let to four students previously.

-Right.

So, this property has that option as well.

-So, what's the budget?

-I budgeted it around about 12,000.

-OK.

But now I've seen it, it might not need that much.

But if I don't go to that,

then I can certainly get the patios outside done as well,

which certainly need some work.

Yeah, that'd be nice. And what's the timescale?

Well, as I'm not doing this full-time, myself, so...

probably a little bit longer than you would have thought.

-Maybe I'm looking...maybe the three months' mark.

-OK.

-Well, listen, congratulations. Lovely to meet you.

-Thank you.

-Good luck with it.

-Thanks.

Huh. So, Ian breaking the golden rules of not visiting the property

or reading the legal pack before buying it.

Still it seems he's got away with it and it certainly is a great house

with potential to deliver some pretty impressive rental yields.

Why would you sell?

Well, I guess everyone's personal circumstances are different.

You can find out what he chooses to do later in the show.

Here we are in Tulse Hill in South London,

which sits just between Streatham Hill and Dulwich.

And with its own train station and good transport links,

not only into central London but into nearby lively Brixton,

well, it makes a popular choice for first-time buyers,

young professionals and families.

Well, today, I'm on the upper side of Tulse Hill in London

and the station is about a 20-minute walk away from here.

You've got the South Circular, it's literally just over there,

giving you easy access into London.

And the property I'm here to see, well, it's right here.

It's an ex-local authority flat, it's up on the third floor

and the guide price - £195,000.

Now, it's pretty warm today, I felt climbing all those stairs...

Do you think it's unrealistic of me to expect a lift here?

Well, some of the things it definitely does come with

are 111-year lease and a £1,187 service charge, communal gardens,

resident parking and yes, thankfully, look, there's a lift!

# I get lifted up hi-high

# Hi-high

# I get lifted up hi-high. #

So, once inside, what have we got?

-LAUGHING:

-Well, you can see somebody

has been very busy stripping the wallpaper.

Yeah, there are lots of doors everywhere.

-Uh...

-SHE LAUGHS

This is probably the slimmest cupboard.

Well, I certainly can't get in there. And the longest.

I'm just going to have a look and see how long it is.

I'm still in here. There you go.

I'm touching the end of the wall and I'm back out again.

Honestly, you've got to see inside there.

It just goes on forever.

One door. We've got an intercom system,

which is really handy, so you can speak to your guests downstairs.

Another door, which is a bathroom.

Fantastic. It's a white bathroom suite.

Another door there, which is a cupboard.

A nice-sized double bedroom there with a big window.

The lounge through there.

Another door through here, which is an airing cupboard.

A door here, which is the electric meter.

And through here - and there isn't a door on the kitchen -

is the kitchen space. It's a little bit pink at the moment.

And you could certainly do with upgrading some of these units,

but what I do love is the great big window here,

letting in loads of light and you've got fantastic views across London.

And just above the tree tops...

I can see the London Eye.

So, in here, we have a really good-sized lounge.

Now, something I'm seeing a lot of at the moment,

doing all the viewing that I do in London flats,

is people attempting to take the kitchen out of the kitchen,

turn it into a bedroom and put it in the lounge.

Now, first of all, you do need permission from the freeholder,

but you know in this instance,

I'm not sure that that would work.

I think the kitchen would be an average single,

but I don't think the lounge can take a whole bank

of units along here.

I just think it's too small

and you would probably damage the value of the flat by doing so.

But something I would recommend in here,

even though we are three floors up and it's a very warm day,

I don't think this gas fire is sufficient.

So, I would certainly rip that out, get a combi boiler in.

You can then get rid of that water tank

and free up some space and just put some radiators in all of the rooms.

And that is a sure-fire way of certainly adding value here.

And by the way, even if you think this room is big enough

to be an open-plan living/kitchen room,

well, some local authorities would disagree with you.

They've introduced space standards, so check it out first.

Overall, this flat has got some real pluses,

but it does need jazzing up to make it stand out

in the ultracompetitive London market.

It's got great views. It just needs an interior to match.

What does a local estate agent think about the flat

and the block that it's in?

My first impression is that everything is so well-maintained

and the front doors are newly painted, etc.

So, that gives me the impression that there are a lot of other

occupiers in this building.

The communal areas are very good, there isn't any rubbish,

there isn't any graffiti.

So, for anybody that's looking to purchase this,

whether it'd be an investment or to just do it up

and turn it around quite quickly,

that should give them the confidence that they need

from a resale point of view that there shouldn't be any issues.

Of course, the communal areas in the flat set

that all-important first impression,

but what changes are needed to maximise this flat's potential?

What I would do is remove the kitchen

and turn that into a bedroom and put the kitchen into the sitting room,

so you end up with an open-plan kitchen/reception,

two double bedrooms and a bathroom.

That way, it's more desirable from a resale point of view,

but you're also going to get a higher rent.

So ultimately, that's what you need to do

to achieve the absolute maximum.

Well, I think I'm going to take some convincing on those

changes of layout, but perhaps the figures will convince me.

What would the differences be on the resale values of this flat

guided at 195,000?

First, as a one-bed, what could it achieve?

If I was to place this on the open market

once the property has been refurbished,

I would be looking to achieve offers around about £250,000.

And as a two-bed?

I would be looking to market the property around about £275,000.

The agent thought it could rent out as a one-bed

for £900 per calendar month

whereas as a two-bed, it could make as much £1,300 per calendar month.

On the face of it, that looks like a big profit,

but you do have conversion costs to factor in.

I guess if you're renting this out long-term,

then getting the extra bedroom would really be worthwhile.

This ex-local authority flat needs central heating installed

and then, well, I just think it could be a quick doer-upper.

It's a great space and got at the right price,

well, I think it would be an ideal rental for a London investor.

So, let's see what happened

when this one-bed flat went under the hammer.

Lot 57 - SW2, third-floor flat.

This one does need a bit of TLC, this.

The original guide price in the catalogue

was increased to 195,000 on auction day,

but the auctioneer started above even that.

Start me around 210 for it. 210.

Thank you. 210, I'm bid. 212? 212.

214? 214. 216?

216. 218?

220. 222. 224.

226. 228?

228? Take 227, if it helps either of you or anyone else.

Otherwise at 226, I'm bid. Once.

226, twice...

..third and final time.

Yours, madam, at £226,000.

Your bidder number is?

And so, in no time at all,

the one-bed flat in Tulse Hill was bought for 226,000 by Sara.

Now, Sara lives just five minutes away and she joined me back

at the flat along with her dog, Fluffbert.

-Sara, congratulations.

-Thank you very much.

Let's start at the beginning with this property

because I know you had a few little changes prior to the auction

-with bidding for this.

-Exactly.

So, on the day of the auction, they put the guide price up,

so I had to make quite a snap decision on the day

whether or not I was actually going to bid on it at all.

Right, so how did you make your mind up in a split second

whether this was still right for you or not?

Well, I realised at that point

that there's still a decent rental yield from it.

I probably was eating into my profit in terms of redeveloping it

and quickly selling it on, but I like the area

and sort of the long-term reasons I wanted to buy it were still there.

But we did get very close to, I think, the level where I decided

I wasn't going to go any higher.

And what is it about this property that was so right for you?

The location is great.

I think at the moment there's a lot going on around here.

We've seen Brixton really develop in the past few years

and the road towards Clapham South,

there's been a lot of investment there.

And it's slowly trickling back this way.

Over the road, there's a new development just going up.

So, I think all of that, to me, really bodes well for the future.

So, I thought this is a really good place to be buying for now

and for a long-term rental.

If Sara sounds like she knows what she's doing,

well, that's because she has two rented properties already.

And while her husband, Sam, is on hand for help and advice,

there's also a VIC,

that's a very important canine.

Now, I know it's not only you that you've got to take into account

whether you like this property and, of course, your husband...

There's someone else in your family that's loved very much, isn't there?

Yeah, so our little dog, Fluffbert, does come on all viewings.

And it's often a good test of how much work needs doing

in a property to whether or not I even put him on the ground.

-Really?

-So in here, when he came, he was running around,

chasing his ball as I was doing my first viewing,

and I realised then at that point,

it's probably quite a good flat and wouldn't need a lot of work.

Well, that's good. The flat has passed the Fluffbert test.

But the flat is a bit of a mess.

Not quite a dog's dinner, but it's far from being the cat's whiskers.

So, what does Sara plan to do with it?

With this one, I'm really choosing between two options.

And one is to do it up quickly to a really nice, high specification

and try and sell it.

The alternative is to perhaps try and convert it

into a two-bed for rental, providing the leaseholder allows that.

And then rent it out for, really, a couple of years

and see where the market takes me.

And if it was a two-bed,

I presume, you're thinking of moving the kitchen in here.

-Absolutely.

-I do think it might be a little bit on the small side.

That's my only concern.

It's a smallish room, but I've seen a lot smaller.

I think it depends on, really, who moves in

and what their requirements are.

I mean, some people need space and some people need two bedrooms.

What sort of budget have you got for the work here?

Because I can see the walls have all been stripped.

It would be quite straightforward to do this place up.

It really depends on the specification I want to go for

and whether I put a new boiler in or not.

I think just simply putting on electric radiators,

a new lick of paint, perhaps smartening up the kitchen a bit

and 5,000 will be more than sufficient.

If I go for a new boiler...

I also need to get the electric tested,

so I think it depends upon that as well, but it may stretch to 10,000.

If Sara is uncertain about her budget,

the same is true of her timescale because if she does decide to

move the kitchen, she'll need to get approval from the freeholder,

and that could take six to eight weeks just for a decision.

Whereas a quick refurbishment with new central heating could

take just a few weeks.

So, let's talk about your past

because I know this isn't what you've always done.

I mean, at the moment, you are buying and selling property.

But you've not always done this, have you?

No, so I started life in an international development

and I was an economic advisor to Eastern Europe.

And then I moved the Treasury.

And most recently, I've been working in banking,

but after quite a number of years, I just wanted a bit of a break.

So, I'm having a bit of a pause, bit of a sabbatical.

And in that time,

I thought it would be... We've often talked, my husband and I, about

-building up almost a pension portfolio of properties.

-Yeah.

So, I've been really trying to do that this year.

Oh, well, I'm really excited to see the outcome of what you do -

is it plan A, is it plan B? Good luck with whatever you do

and congratulations.

Well done for even getting the flat at auction.

-Thank you very much.

-Lovely to meet you. Thank you.

So, Sara is looking at two possibilities here -

doing it up quickly and then renting it out

or the slightly more timely and costly option of moving the kitchen

into the living room to create that second bedroom.

However, she still needs permission from the management company,

and that will certainly slow things down for her.

Join me later on, and you can see what she decided.

Coming up, I've got a bit of a soft spot for this property in Derby.

This place just keeps giving. I love it!

And we return to South London and our one-bedroom flat

to hear the end of our shaggy dog story.

Fluffbert's been here,

I'd say in the last week, pretty much continually.

Silverdale in Staffordshire was where we first saw

a three-bedroom, end-of-terrace house,

which offered sizable accommodation downstairs.

While upstairs, well, you could say it was using the room to the max.

To increase the number of bedrooms in the property,

this one bedroom has been divided into two -

one on this side and another one here.

And as you can see, they've achieved that, really, just by splitting

down through the window at the front.

But with a nearby university

and therefore the possibility of student rentals,

getting the maximum number of bedrooms was paramount

for any buy-to-let investor.

And it was bought for £61,500 by locally-based man Ian,

who'd started property developing

as a sideline to his career as a software engineer.

It looked interesting straightaway, yeah.

I could see that it was a three-bed, Italian upstairs bathroom.

It's in quite a good location here in Silverdale.

Theoretically, you could have this as a four-bedroom let,

couldn't you? Cos you could use the front room as a bedroom.

That's another thing that attracted me to the property

-is that it had been let to four students previously.

-Right.

So, this property has that option as well.

# It's your choice... #

But whatever route Ian chose,

first and foremost, he had to improve the condition

of the house and he hoped he could get it sorted on a £12,000 budget

and in a three-month timeframe.

But now, eight months have passed,

and it's time to see how Ian's got on

with his potential student home...work.

New double-glazed windows and front door

show encouraging signs outside.

And inside?

Well, it's crisp, simple and practical.

There's a modern fireplace and new French doors.

The old kitchen was totally ripped out

and replaced with a brand-new kitchen, retiled and repainted.

I did like the original kitchen,

but this is certainly more streamlined,

and the laminate floor gives a nice, clean flow

between the back reception room and kitchen.

And upstairs, there's no layout changes,

but the new decor certainly makes the three bedrooms

look more inviting.

And the bathroom?

So, this is the bathroom. It's a nice big bathroom.

There was a glass brick shower enclosure here,

which was just rotten.

So, that's come out and has been replaced with shower walls,

a new shower unit and cubicle.

I got rid of the old border tiles and replaced them

with a new modern border, and it's been repainted.

So, I'm really pleased with the results.

Yes, this is so much better

and perfect as either a family or communal bathroom.

Outside at the back, which was in a sorry state,

Ian has had it re-landscaped and new paving laid

along with some new fencing.

So, all in all, top-class job, I reckon.

I think the biggest challenge with the renovation of this house

was undoubtedly the painting.

I knew it was quite a big house, but when I started painting it,

I started to realise how big it was.

So, it was a major, major job in the end,

and that was the job that definitely took the longest

and was the hardest work.

Yes, it's not a small house.

It took three days alone just to do the hall and stairway.

So, maybe not surprisingly, his timescale has more than doubled,

but while he was applying those layers of paint,

did he decide on what he wanted to do with the house?

The house is on the student market at the moment,

so we'll see how that goes.

If students don't take it, then it's...

I hope to rent it out to a family.

Hm... So nothing completely set in stone yet.

I hope he can be a bit more definite on his £12,000 budget.

So, spent a bit more than that.

It's more like around the £13,800 mark.

There were one or two unforeseen expenditures,

such as getting the loft insulated

and the shower unit

and one or two other things as well.

But I got the house at a good price,

so I still think that's been a reasonable spend.

That £13,800 along with his £61,500 purchase price

takes his total costs to £75,300.

So, does that add up to a good deal?

What do two local property experts think?

The property has been renovated to a very good standard,

and the finish has been done to a very high level

and also a very good addition

with the new kitchen suite in the property.

It's my first time inside the property.

I'm extremely impressed.

There's a lot of space.

I'm pleased that there are two reception rooms

and a dining kitchen.

And it's also quite spacious upstairs.

Ian has bought this as a long-term rental,

but if he did decide to sell now,

could he make any profit on his £75,300 investment?

I would expect this property to achieve in the region

of £95,000 to £100,000.

I would place the property on the market

for sale at £95,000 to £100,000.

Right. Yeah, very happy with that.

Yeah, it's...

a little bit more than I was expecting, but, yeah, very pleased.

I bet you are, Ian. That could mean a potential pre-tax profit

of £24,700 on the top valuation.

And the agents also reckon that, let as a family house,

he could get a rental return of around £525 per calendar month,

which would generate a yield of around 8%.

But Ian is currently hoping it will be a student let

with the front reception room making it a four-bed let.

So, how would that work out?

If this property was let to students on a four-room basis,

I would expect it to achieve in the region of £950 per calendar month.

If the property was let on a room-to-room basis,

I would expect the property to achieve somewhere in the region

of £850 to £950 per calendar month.

I'm intending to advertise a slightly lower rate than that,

but I will bear those figures in mind.

Student lets are generally only for nine to ten months of the year

and, of course, are based on full occupancy of the four rooms,

but even the lower £850 per calendar month would generate

a healthy yield above 10%.

So, it would bring in a greater return on his investment.

Whichever route he chooses,

it seems to have been a successful financial venture,

but did he enjoy doing it?

The experience on the whole has been a good one.

It's been very, very hard work.

Much harder work than I envisaged.

But when I look round now,

I think it's all been worth it.

BAGPIPES PLAY

Oh, the stirring sound of the bagpipes,

which means we must be in...

Derby.

Yes, slap bang in the middle of England,

but a city with a historical connection to Scotland,

for it was here in December 1745

that Bonnie Prince Charlie rode into town

with an army of 6,000 Highlanders

intent on continuing to London to claim the throne.

Derby was as far south as he got,

and the Jacobite uprising came to a sticky end the following year.

You'll be glad to hear there's no marauding armies nowadays,

but as I walk up this relatively quiet residential street

towards the property I'm here to see,

we're only a few minutes' walk away from Derby's city centre.

And here it is.

It's a two-bed, mid-terrace house

with a guide price of £85,000+.

I'm going to get inside and take a look.

So, we're in off the street,

straight into the lounge/front-room area,

and it's in very good condition.

Really nice flooring as well.

Modern fireplace. I'm pretty sure,

back in the day, there would have been a real coal fire there.

But it looks like it's just been painted.

Central heating as well.

In really nice condition. What a nice start, that is.

We're going to go through to the back of the property.

Stairs going up to the bedrooms and through into here,

which would have been a second reception room.

And as you can see, it's now a kitchen.

A very nice kitchen.

Probably had a dining table over there at some stage,

but this is a...

this is brand-new.

There's even a sticker on the oven just there.

Very nice, very neat. I don't think it's been used in here.

You've also got a toilet

and shower room down at the end of the property there.

This is nice. I do like this.

Let's take a look at this - the shower room.

Like the rest of the property, it is in great condition.

I would imagine this cupboard here

would have been for the washing machine,

but you could quite easily take that out,

give yourself a bit more space.

But apart from that, toilet, sink and the shower all seem

to be in very good condition.

But let me just show you this.

Excuse me, one minute.

If you can still see me...

..you're going to need to change these doors for definite.

# Ooh, if you could see me now... #

And on the subject of hiding things away,

if you were to move the washing machine out of the shower room,

there is a perfect spot for it.

This house comes with a cellar.

And wouldn't that make a perfect utility room?

Let's see if the good news keeps coming upstairs.

As you can see, it's the front of the property,

and we're upstairs in one of the bedrooms.

It looks like it's just been decorated.

It might not be everybody's taste, but it looks fresh and new.

Good space, good-sized bedroom.

Central heating as well.

Just across the stairs into the second bedroom,

and again, it's a good size.

It looks like it's just been wallpapered as well.

New curtains.

And I'm pretty sure this is the master bedroom

cos you have got a lovely spacious en suite.

This place just keeps giving. I love it!

# Love is in the air

# Love is in the air

# Oh, oh-oh. #

I'm loving this one, for sure,

but the downside might be that there's little opportunity

to add value if you wanted to sell on.

However, if you're looking for a house to live in,

this could be a cracker.

What does an agent from the auction house who sold it think?

# Love is in the air. #

After having a look around,

I wouldn't really say there was anything that needed to be done.

You can always make things different for your own taste,

but there isn't anything that springs to mind

that you would think, "I've got to do this."

If I were to put this property in its current condition

on the open market, I would expect it to achieve

somewhere in the region of £120,000.

If I were to offer this to the rental market

in its current condition, I would expect it to achieve

somewhere in the region of £500 per calendar month.

Try as I might, I can't find much wrong with this property,

but the one thing I would change,

is that toilet door, just for a bit of privacy.

Apart from that, this place is more or less ready to go.

Let's see who was lucky enough to get it when it went under the hammer.

Lot 16, we've got a traditional older-style, terraced house.

It's got two-bedroomed accommodation,

and it's had a new kitchen and bathroom installed.

Gas central heated, double glazed.

Start me where you like on this. Might say 88 for it.

88.

85?

85, thank you. 85,000, I have as an opening bid.

At £85,000. 86 is bid. 86. Seven?

87. Eight? 88. Nine?

90,000. 91. 92.

93. 94.

95,000. 96. 96.

It's in the market, ladies and gentlemen. It's going to go.

At 96. 500 help you?

96,000 here. 96,500 somewhere else?

96,500. 97.

Five again?

£97,000.

All done with it.

At 97,000 for the first time.

500. 98.

At 98. One more.

£98,000, going once.

Going twice. Third chance.

All done.

Sold at 98,000, thank you.

Making that final bid of 98 grand were Simon and Susie,

husband and wife and now first-time property developers.

This isn't a typical auction purchase,

being in pristine condition, but now they own it,

what, if anything, do they plan to do with it?

# I'm yours Doo-doo-doo-doo-ya

# Ba-doo-ya-doo-doo-doo-doo But do ya want to...? #

-Nice to meet you, Simon. Congratulations.

-Thanks.

Same to you, Susie.

Who's the lucky person or the clever person that found this?

-It was me.

-And how did you find it?

Just looking through the auction catalogue.

Was this the kind of property you were looking for?

-For the first time, yes.

-Yes.

Cos it's a first-time investment, so didn't want anything too taxing,

too difficult, and this one ticked all the boxes.

-And more, I think, to be honest with you.

-Absolutely.

Susie, what made you want to get into property in the first place?

Just been watching Homes Under The Hammer, haven't we?

See, we've done something right, didn't we?

Inspiration from the programme. I think it makes you realise that...

It accesses so many other people,

so it gives you the inspiration to have a go,

and then we've watched the programme that long,

we've seen the pitfalls and the problems people have come across.

So, we thought now was the time to do it.

We don't live that far away from here. We know the area.

This is a nice part of Derby near the centre.

So far, so good.

They're making all the right noises,

but will they pass

the Homes Under The Hammer legal pack question?

-Yeah, we've done that, haven't we?

-Yeah.

-Yeah.

That's been Susie's speciality, the legal pack.

-If it was me, I'd be a typical bloke.

-Exactly.

I don't read instruction manuals when we build DIY furniture,

so I'd be no different with legal packs.

So, Susie takes all the credit for that.

I could have bought anything.

And it doesn't last. When you try and put something up

without the instructions...

Then there's something still in the box at the bottom,

and I realise that was the integral part holding it together.

-And then I'll blame the instructions afterwards.

-Exactly.

-And they would've done it first time, wouldn't they?

-Exactly.

You know, it's so annoying. We love you very much.

But you always get it right and we don't.

And that's annoying, isn't it?

Well, I'm glad Susie is on the ball.

And I think she has picked out a real peach

from the auction catalogue, but I'm still struggling to find out

what really needs doing here.

I know it's a silly question, but what are you going to do?

-There's got to be something here.

-I think a new fire.

Fire and a fireplace, I think that could do with changing.

I think a lick of paint always is a good thing as well

just to freshen it up. New doors throughout the house.

Possible new boiler

-because that is quite old.

-That's quite old.

Yeah, we're going to get service first of all.

Change the locks on the property because they are not very secure.

And general weeding and tidying up in the gardens.

The biggest thing might be the removal of the trees at the back

because they are in a neighbouring property.

So, we're going to have to knock on their door and see if they're happy.

And then, of course, it's access points as well.

Getting into the property for a tree surgeon, so...

Just to basically make it more presentable.

What are you going to do with those funny doors going into the toilet?

Well, it would be funny to leave them,

but I think we need to get rid of them for a bit of privacy.

-I think it's...

-Yeah.

It's not the look you need, is it, to be fair,

so they are going to have to go.

I realise there was a washing machine in the bathroom as well.

But you've got a cellar. What are your plans for all that?

The cellar, really, is just make it nice and presentable.

Paint, clean...

Would you consider turning it into a utility room, maybe?

Yeah, I think we'd have to give that some thought.

I think I have sown the seeds of an idea here.

Hopefully, it won't add too much to their budget of £5,000,

which I think should cover the boiler,

fireplace and the possible work outside in the garden.

And they hope to knock it all off in four to six weeks.

What's the plan for the house when it is complete?

-To sell would be ideal.

-I think the main thing would be to sell,

but if it didn't sell within a short time,

then we would rent it out

cos obviously, you lose money the longer it goes on.

-Four to six weeks.

-Yeah, maximum.

-£5,000 budget.

-Mm-hm.

Doddle. Absolute doddle. I might come in with you, half each.

We were going to bring some paintbrushes for you today

and some overalls as well, if you don't mind.

-Wish you all the best, Simon.

-Thanks very much, Dion.

-Good luck.

-Wish you all the best, Susie.

-Thank you.

-Thank you.

For Susie and Simon, just starting out in the property developing

world, this project is perfect.

They've given themselves a £5,000 budget

and a four-to-six-week timescale.

I don't think it will get anywhere near either of those estimates.

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

Well, we've seen what one of our buyers did with their purchase,

-but what about the other two?

-Did everything go to plan or not?

Let's find out.

Tulse Hill in south London was where we first came across

a one-bed, third-floor flat in a well-maintained tower block.

And with the addition of communal gardens,

plenty of parking spaces

and ready access to good transport links,

this flat had a lot going for it and it was bought for £226,000

by financial analyst Sara as her third property purchase,

but she really wasn't quite sure what she was going to do with it.

With this one, I'm really choosing between two options

and one is to do it up quickly

to a really nice, high specification and try and sell it.

The alternate is to perhaps try and convert it

into a two-bed for rental,

providing that the leaseholder allows that,

and then rent it out for, really, a couple of years

-and see where the market takes me.

-And if it was a two-bed,

-I presume you're thinking of moving the kitchen in here.

-Absolutely.

A downside to the two-bedroom option

was that it was likely to take six to eight weeks

to get a decision from the freeholder

and with her banking background, Sara was keen to take the route

that would give her the best financial return.

So, what was it to be?

# Make up your mind

# Make up your mind

# Girl, make up your mind before it's too late... #

Well, in just under two months,

we're back with Sara and faithful dog Fluffbert to find out.

Well, the bedroom has been fully refurbished

and is ready to move into, but what about the lounge?

Is it now a kitchen/diner?

So, in this room, we've done, I'd say, three main things.

First of all, we sorted the walls out.

They were full of tiny holes, which took about three days

of filling and sanding and filling and sanding.

The other thing we've done is to put heating in here.

So, first of all, we've got the electric radiators,

which you can time and therefore, really active central heating.

But, I think, probably the most prominent thing

is we've put in a new fire.

This is an electric fire. Adds a bit of a statement.

We've got a nice surround

and, really, quite a change from that hideous, old,

decrepit fireplace that was in here before.

So, a number of changes,

but no kitchen, which remains next door.

The kitchen's had quite a makeover.

We took out the old units, took back all the wallpaper,

put in a new kitchen suite, did an awful lot of painting,

changed one of the windows as well

and then generally did an awful lot of cleaning

to make it look a bit more spick and span.

With bathroom cleaned, re-plastered and redecorated,

the flat is now greatly improved

and, personally, I always thought keeping the layout the same

was the best option.

What was the deciding factor for Sara?

# Make up your mind... #

A two-bed would have been a nice option for the flat,

but, at the end of the day, it had to come down to could I do it in time?

And there were two issues with converting it.

First of all, I needed to get a variation of the lease,

but it would take about five to eight weeks.

Then, on top of that,

we found out that there was an issue with the lease

and that actually dragged on for some time

and in the end, it just became uneconomical

for me to convert it to a two-bed

and we took the decision to make it as a nice one-bed for sale.

And changing the layout wasn't the only alteration she decided against.

It would have been very nice to have a combi boiler in here,

but being on the third floor,

it may have meant putting up scaffolding

in order to get the flue out through the wall

and it was working out to be really quite expensive,

so we decided, in the end, that, while it's nice to have,

it wasn't a necessity

and, actually, what was needed was some heating,

so we put in electric radiators and we put in a new fire.

# Living by numbers

# Living by numbers now. #

So, the numbers didn't work to make the changes pay,

but who did the work that was carried out?

My role, really, has been, I think, twofold.

First of all was project management,

so getting all the different contractors in.

And then, after that, it's been myself and also my husband

working really quite long hours, doing the painting and the cleaning

and just really putting the finish on the flat.

And what about Fluffbert? Did he contribute at all?

Fluffbert's been here, I'd say, in the last week,

pretty much continually,

but when we had the bigger, heavier work going on,

it really wasn't appropriate for him, so, at that point, he stayed at home.

Smart animal. Keep clear of the heavy work.

Best not to be seen just as a dogsbody, really.

I think, in terms of how much we spent,

we spent about 8,500

and that includes things like a rewire and a brand-new kitchen

and some plastering as well.

Um, but it was very much a case of what needs to be done

rather than what I would like to do

because this is actually quite a lovely flat

and you could spend a fortune making it into a beautiful flat,

but I didn't think I'd get that money back.

An eight and a half grand spend

on top of Sara's £226,000 purchase price

takes her total outlay to £234,500.

But was she right to keep this as a one-bedroom flat?

What do two local estate agents think?

First, the agent who saw it last time.

It's completely transformed

from when I was here a few months ago.

Pleasant surprise. All well and good.

The property has been decorated in neutral tones

and the new added kitchen gives a sense of luxury,

which will maximise the appeal to the wider market.

The selling features from this property,

as far as I'm concerned, is that, in every single room,

there are exceptional views over London and also green spaces

and I think that really is a huge attribute

to this particular property.

Sara's view, though, is to sell the flat on,

but could it make for a better investment as a rental property?

The property would achieve, on the rental market,

between £1,200-£1,250 per calendar month.

I'd expect to achieve a rent

of round about £1,200 per calendar month.

The agent who saw it before

has increased significantly her rental values

as she thinks the quality is very good

and also said this is a very busy rental period.

So, what does Sara make of those valuations?

I think those are fine.

It's not something that we're looking to do at this point in time,

but if it wasn't to sell, then perhaps that could be an option,

but it's not really for us.

And £1,200 per calendar month

would generate a rental yield above 6%,

but having sunk £234,500 into this flat,

what kind of resale return might she achieve?

If I was marketing this property today,

I'd place it on the open market for an asking price of around £275,000.

The property would resell, on the current market,

between £275,000 and £285,000.

That's actually spot-on with what I was thinking as well,

so I'm really glad to hear those numbers

and they've reassured me that I was right on the market.

Yes, that's not bad.

Those figures could see a pre-tax profit

of between £40,500 and £50,500 and that's just in two months.

Well, that's not a bad return on her investment,

so perhaps property development is the way forward for Sara.

What I've really enjoyed about this is the flexibility.

I've been able to take a couple of holidays.

I've also worked some very long hours with my husband

getting the place up to scratch,

but it's been very much on my own timetable

and I've really enjoyed that after many years in the corporate world,

so I think I wouldn't mind doing another one at least

before I perhaps tip my hat back into the corporate world.

DION: It was within walking distance of Derby city centre

where we first saw this two-bed, mid-terrace house

that was, well, fully renovated and practically ready to go.

This is... This is brand-new.

There's even a sticker on the oven just there.

So, with a new fitted kitchen, downstairs shower room,

two bedrooms - one of which was en suite -

all recently refurbished, there wasn't really much to alter.

# And I can't find a reason to change... #

And this pick-up-the-keys-and-move-in property

was bought at auction for £98,000

by husband and wife team Susie and Simon

as their first property development project together.

Was this the kind of property you were looking for?

-For a first time, yes...

-Yeah.

..cos it was a first-time investment,

so didn't want anything too taxing,

too difficult and this one ticks all the boxes.

-And more, I think, to be honest with you.

-And more.

Yes, as first-time property development projects go,

this was pretty straightforward.

# That's why I'm easy

# I'm easy like Sunday morning. #

And with a few tweaks in mind with doors, decor

and minor room adjustments, plus a desire to rev up the chainsaw

and cut down the trees overlooking the garden,

they had given themselves a budget of £5,000

and hoped to get to the sales market in four to six weeks.

But now, ten weeks later, we're back to see if we can spot the changes.

Well, I'm pretty sure outside's the same.

What about inside?

The fireplace has been changed to a more modern, contemporary look.

Internal doors have been changed.

And in the kitchen, well, that needed nothing more than a lick of paint.

Um, and in the bathroom,

there was the washing machine, which was all boxed in.

That's been removed, which exposed some pretty ugly damp

and some rot, so that's all had to be sorted,

the pipe work taken away.

Getting rid of the rot meant pulling up the laminate flooring

and replacing it is still to be done.

And the two bedrooms?

Well, they remain untouched.

The biggest, most important thing to be done was the boiler,

which was old and very big,

so that was replaced for a modern combi boiler.

In the garden, the conifer trees have been removed

and it's been tidied up and levelled.

The trees were actually in the neighbours' garden,

so they went 50-50 on the cost to have them removed.

A few little bits and pieces to be done,

but by and large, it's completed.

And it's all looking pretty good, but then, it was before.

Mind you, remember this?

Excuse me one minute.

HE SIGHS If you can still see me...

..you're going to need to change these doors for definite.

# Don't leave me this way. #

The doors were like a concertina door,

um, and basically, they didn't shut, so you could see straight through

and now there's just a normal, modern door on there.

Well, that's a relief for all concerned.

# And I see you no more. #

But who would we have seen working on this house?

The works have been completed by different people.

The boiler was obviously done by a qualified Gas Safe guy

that we know well.

Painting and decorating has been done by father-in-law, kindly.

Obviously, we've had a tree surgeon to remove all the conifers.

And the other works have been done by Susie and by the father-in-law

and just tidying up and weeding.

Um, I haven't been here as much as I'd like to have been

cos I've been working away from home,

so Susie's been project managing it

and getting a lot of the works done herself.

But one of the bits Susie didn't have to project manage was the cellar.

They decided against converting it into a utility room

as the costs were too high, which I think is a bit of a shame,

but property development is all about maximising profit.

Had an original budget of five K

and that was just in case there was anything unforeseen

that we hadn't come across.

We've actually spent a total of £3,000

and half of that was the boiler.

The rest has been for fireplace

and obviously tradesmen coming round, etc.

£3,000 on top of

their 98 grand purchase price

takes their total cost to £101,000.

So, despite relatively minor changes,

have they bagged themselves a bargain?

What did two local property experts think?

First, the expert who saw it last time.

It's the second time that I've been in the property

and I think that the changes have made the most of what's here.

However, there wasn't really a lot to do.

The shape of it, the structure - it was already here,

but it's been enhanced since my last visit.

I think the layout works particularly well.

In fact, I think it's probably the best way

to lay out a property like this.

Usually, these properties have small kitchens

and only one bathroom, but with the current format, layout,

it allows for two bathrooms and a decent-sized kitchen

with space for a table.

I would say the selling points of this property are its location.

We're within easy reach of the city centre.

We're on the edge of the Strutts Park Conservation Area

with the fantastic Darley Park right on your doorstep.

Susie and Simon bought this house to sell on,

but if they couldn't immediately find a buyer,

what kind of rental income might it generate?

I would say, if this property were offered for rent

on the current market, I would anticipate it being let

at £550 per calendar month.

To rent this property out, it would rent rather quickly.

I would expect £550 per calendar month.

-Yeah, good.

-Yeah, about right.

-Yeah, I think that's...

It's not something we're looking at initially,

but if we don't sell,

then you've got to entertain the idea of renting,

so that's worth looking at and they're good figures.

£550 per calendar month would mean a reasonable yield of 6.5%.

But what about the all-important resale value?

I would say, if this property were offered for sale

on today's market, I would anticipate it would achieve

somewhere in the region of £130,000.

I think, if I was putting this property on the market

for sale today, I'd be looking at achieving roughly £115,000.

-Pretty pleased with both of those figures.

-Yeah.

-Definitely the top end, we'd be more...

-Yeah, the top end.

Yeah, more inclined to go towards that, obviously,

but maybe halfway between the two is probably about where it's worth.

Well, those values could see a pre-tax profit

of between 14 and 29 grand, which isn't bad,

considering how little work they had to do on this house.

So, overall, how did they find their first experience

in property development?

I enjoyed it.

First house, there was quite a minimal amount of work needed,

so, therefore, it was a good way to start off.

Learn from a few mistakes and then take it into the next one

and maybe a little bit more bold and ambitious with that project.

Lots of people buying all kinds of property

-and there are more every day.

-So, come and join us next time

for some more auction action on Homes Under The Hammer.

-But it's bye for now.

-Bye-bye.

-Goodbye.