Episode 65 Homes Under the Hammer

Hello. When you're buying an investment property,

take my advice and repeat over and over again,

"It's not personal, it's business."

But remember, when you're buying an investment property,

it's likely to be a home for somebody else so, by all means,

pour your heart and soul into it, just not all your cash.

Yes, and once you've finished repeating that to yourself,

maybe it's time for you to hit the auctions

and buy your next home under the hammer.

Sticking up your hand in an auction room,

well, it can be an exhilarating experience.

Yes, and that's not surprising, as there is a lot of money being spent.

So who took a deep breath and bid today?

Can you guess what I'm planning at this two-bed in Longton near Stoke?

Kitchen, diner. Kitchen, diner. Yes, you know what I'm thinking.

I've got a riddle for you at a flat in Walthamstow, London.

You can't see it but it's expensive.

Have you guessed what the issue with the property is?

No mystery about this two-bed property.

A plant has made me Mr Angry in Aberdare.

Nasty, nasty, nasty little devil this is!

All these properties were bought at auction.

We'll find out who got them

-and how much they paid when these homes went under the hammer.

-Sold.

Today, I'm taking the well-trod pilgrimage to Stoke-on-Trent

and, specifically, the town of Longton.

But if you think you know what type of property I'm here to see...

# Think again, you're wrong... #

If you're a regular viewer to the show and I say, "Stoke",

you'll be forgiven if you're thinking terraced houses.

But that's not the case here. On this beautiful tree-lined street,

we've got a row of semidetached houses on my right

and on the left, you've got a sort of mishmash of houses.

You've even got a couple of art deco houses as well.

The property I'm here to see is a semidetached three-bedroom

with a guide price of £90,000. Let's go see.

And with plenty of off-road parking and a garage,

so far, it's looking good to me.

We're straight into the hallway.

You've got your stairs going up to the bedrooms.

Your front room living area,

gas fire and a nice big bay window letting lots of light in.

That will be the dining room. What have we got in here?

Downstairs toilet - always a bonus.

And the kitchen, which looks a bit dated,

and you would need to change that.

But kitchen, diner. Kitchen, diner.

Yes, you know what I'm thinking.

Get rid of this wall, give yourself a nice big kitchen-dining area,

modernise it a little bit.

It becomes the hub of the house, the kitchen and the diner.

It's a great family area, it's where you spend most of your time.

For me, get rid of that wall, open it out a bit.

It's a no-brainer. More light, more space - job done.

Upstairs, we have three bedrooms and a bathroom.

It's pink and it's dated and it looks tired,

so that would need to be changed.

You've got a back bedroom there with fitted wardrobes

and you've also got a box bedroom just there.

Might be a child's bedroom or even a nursery.

Into the master bedroom which is an OK size again.

More fitted wardrobes, nice big bay window

and central heating as well,

which looks like it's been fitted quite recently,

which is always good news.

With that fair-sized bathroom and three bedrooms,

this is a good family home. It just needs to be brought up to date.

And as much as fitted wardrobes are useful sometimes,

I'm not sure about these ones.

You may be thinking,

"What's the point in having fitted wardrobes with just that much depth?"

Let me show you.

This is actually the chimney breast

and they have utilised the space pretty well.

This was a big look, back in the '70s and '80s.

We're in the 21st century now and these ain't for me.

Get rid of these, create a bit more space, then you've got a choice -

do you have your bed there or do you have your bed there?

But it's a choice.

I know, I know, there'll be some of you that love their fitted wardrobes

and storage space can be an issue.

They do keep clutter at bay

but, if it were me and my decision, I'd get rid of them.

-# How deep is your love?

-How deep is your love?

# How deep is your love?

# I really need to learn

# Cos we're living in a world of fools

# Breaking us down

# When they all should let us be

# We belong to you... #

At the front of the house, you've got a decent size garden

and toward the back, you've got this garage as well.

But what I really wanted to show you is this.

Currently, this is the dining room window

and that is the kitchen window.

If you were to knock it through to create a nice dining-kitchen area,

you've got to have some double doors here, patio doors,

leading out into the garden. Could put some decking up.

The choice is yours, but I think get them doors in, job done.

I do like this house. It's in good nick and it's a good size.

Perhaps more importantly, from a property-developing point of view,

there's an opportunity to add value to this house.

What does a local property expert think?

What would he do to maximise its potential?

If this was my property,

I'd look to change the configuration between the kitchen

and the dining room to create a much larger kitchen-dining area.

And I'd just generally freshen up the property throughout,

get it ready for resale or to let.

But with a guide price of £90,000,

is there much chance of adding value here?

On completion of the work, I anticipate the value to be

somewhere in the region of £140,000 to £145,000.

Encouraging. But what about the rental potential?

I would suggest the property is to be placed onto the rental market

at somewhere in the region of £500 to £550 per calendar month.

I think there's a lot of potential in this house.

It's in a good area, it's solidly built

and it wouldn't take much to turn it into a fantastic modern family home.

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

Lot 71. 80 to start me on this one.

80 bid. At £80,000.

85 bid now. At £85,000.

90? £90,000. At 90. I'll go in ones if it helps.

Looking for 91 now. 91. There? 92.

New bidder. 93. 94.

95. 96 in the aisle.

97. 98, sir?

Half. 97.5. No?

It's only a half.

98. I don't want to talk you into it.

But 98. Another half? 98.5.

99? Sure? If not, £98,500 once.

£98,500 twice.

Third and final time. £98,500.

-HE BANGS GAVEL

-You bought it, sir. Well done.

And so, for £98,500, the three-bed house in Longton, Staffordshire,

was bought by local man Lee.

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

MUSIC: Get It Right Next Time by Gerry Rafferty

Lee, nice to meet you, sir, and congratulations.

-Pleased to meet you too. Thank you.

-What a nice area.

-Fabulous!

It's close proximity to where we currently live,

only about a 20-miute drive to get here.

Close proximity to the A50 and the M6 for commuting,

so ideal, I think, for a first development.

Tell us a bit about yourself, Lee.

Before getting into the property world, developing property,

-what were you doing?

-OK, I've had an extensive engineering background.

That's where I've developed a lot of my practical skills.

But for the final six years of my career, I've been in education.

Property development is something my wife and I have always done

in the 40 years that we've been married,

so we've always purchased property

in a run-down and neglected condition,

we've refurbished to add value to it to build up our own equity,

but this is the first project that I've bought specifically with a view

to developing it on and selling it again on the open market.

Lee's now semiretired from his teaching role,

doing just a few hours a week,

leaving him free to take this on alongside his wife, Jan.

They've spent some time finding the perfect project.

Now it's time to get stuck in.

Tell us what you're going to do with it. Let's start downstairs.

The whole property's going to stand a general refurbishment anyway,

to bring it up to a more modern and current living specification.

We'll start with a rewire, using external contractors

for, obviously, building regulation purposes

and the same with the gas and the plumbing as well.

In terms of the general work on the building,

we're going to be removing a downstairs wall

to create an open space, dining-kitchen area

and then we're going to put in some French windows or a patio door

to give us garden access from the dining room.

-It's screaming out for that, isn't it?

-It certainly is.

It just wants bringing up to a more modern specification really.

We'll put some contemporary fireplaces in

and then the rest will just be new kitchen, bathroom

and a general refurbishment, with new carpets to finish.

So, a fair bit of work, if you're going to knock out a wall too.

-Is that down to you getting your hands dirty?

-It certainly will be.

I'll be using external contractors for all the proper requirements

for building regulation purposes,

but everything over and above that is work I will do myself.

-Is your wife going to get involved and help you out?

-She certainly is!

-Ooh.

-She's a dab hand when it comes to paint finish,

so once I've done some of the major works,

she'll be there with her paintbrush and pot of paint, no problem.

She's also a dab hand at tile grouting as well,

all those sort of jobs that require a bit of detail

and bit of application to them,

she's going to be giving me full support.

-Little bit of quality.

-Absolutely.

-What is your budget, Lee?

My budget is £10,000, which I think is a good budget for this,

with the bathroom and the kitchen work needed.

I think £10,00 is a large budget

for what you want to achieve in here, isn't it?

You've given yourself more than enough, I think.

Yeah, you're probably right. I just didn't want to cut corners.

I've always understood that, if you try and cut corners,

it comes back to bite you in the long run,

so any work that we're going to do, we're going to try

and do it right first time and achieve the necessary standard

that's required for the particular budget of the house.

Yes, with an engineering background,

getting things done right and accurately, I think is in his DNA

and Lee's given himself a ten-week timescale

to make sure he can get this house exactly to his own standards.

# And if you get it wrong

# You'll get it right next time Next time... #

So, Lee, you've taken semiretirement.

Did you not just want to chill out, go on holiday, do nothing?

I'm not that sort of a person, Dion.

I'm afraid I can't just sit with idle hands,

I've just got to do something.

The thought of just sitting down endlessly for hours on end,

doing nothing, I think would drive me to despair.

I love doing practical projects, so I think property development

is the perfect sort of situation for me to be in at this moment in time.

And Lee's get-up-and-go attitude hasn't been confined to this country.

I bought a 100-acre holding out in the Australian bush

in the early '80s and I built a house on that land,

using natural resource material off the land -

the stone and the timber -

and I built a very low-budget house in the Australian bush.

So, it's something we've always done.

-Hold it a minute. You built a house in the Australian bush?

-Correct.

-You personally?

-Did.

Laid every stone and cut every piece of timber.

-Really? How long did it take you to do that?

-It took me about a year.

It was quite challenging and difficult

but the house was beautiful, using the natural stone of the land

and the beautiful red Australian hardwood called woollybutt.

It's almost blood-red in colour and it added a fabulous finish to it.

-This must be a doddle for you then!

-Absolutely.

-Lee, good luck.

I hope everything works out for you. I'm pretty sure it will.

-Thank you very much indeed. Thanks for your encouragement.

-Take care.

Lee's got himself a little gem here

and I think he could be onto a winner.

And I'm glad to see he's thinking along the same lines as me

with that kitchen-diner. Great minds think alike and all that.

Find out how he gets on later on in the programme.

MUSIC: West End Girls by East 17

Walthamstow in London is home to a bustling market,

a 25-minute Underground ride to Oxford Circus

but, perhaps most importantly,

the most famous postcode in pop - East 17.

# In a West End town A dead-end world

# To a dive bar in a West End town

# East End boys and West End girls... #

But will I love today's property lot enough to "stay another day"?

This pretty road is made up of Warner properties,

which were named after the Victorian builder Thomas Warner.

Many of his houses were designed as two purpose-built flats

and it's one of these that I'm here to see today,

which is a ground-floor two-bedder.

It's got the lovely traditional Warner features -

a recessed porch and a doorway with a plaster ornament at the top there.

But I'm not so sure about the pebbledash.

The guide price - £180,000 plus.

And so far, I'd definitely say it's looking "alright".

All right, I'll stop with the East 17 jokes now!

What the flat lacks in gorgeous exterior

is made up for by the fact it has its own front door

and this means it's a flat with no service charge and I like that.

Ooh, it's very blue inside.

You've got an extraordinarily long corridor

with loads of rooms leading off.

Into the front of the property, we've got the sitting room in here

and lots of textured plaster up there. It's even on the coving.

I think we're going to need to get rid of that.

A little bit of damp in the corner, which is not so great.

That needs to be inspected.

The windows - I really think they could do with being replaced.

I'd get somebody to look at those.

There's not an awful lot of character,

so how can you inject some character back into a property like this?

Well, for starters, these wooden floorboards.

They do run right the way through the whole property

and I'm just wondering, because there's been so many years and years

and layers upon layers of carpet, they could actually look quite nice,

once sanded, and that could add a lot of character to this property,

and value too.

MUSIC: Whatcha Gonna Do About It by Small Faces

Carrying on down this corridor and, though needing decoration,

bedroom one is a good size.

Then there's a very dated kitchen and a bathroom,

which is not so much tired - more like exhausted!

The corridor space seems rather wasted here.

Now, how about that second bedroom?

Oh, anyone got a vacuum cleaner?

Here we are, right at the back of the property.

One of the bonuses is that you've got a great big window

with a lovely view out onto the garden,

which I think is a shared garden.

So, I think it's a bit of a waste having this as a bedroom.

I would probably like to turn this into my lounge

so, of an evening you could sit and look out.

You could even think about putting some nice doors there

so you've got instant access.

I would also like to think about changing

the bathroom from the kitchen, swapping them over.

You could think about knocking this wall down

and having the kitchen coming into the lounge,

then out into the garden.

But if you want to make the big changes in this flat,

don't forget you will need to contact the freeholder.

-# Whatcha gonna do?

-Yeah, yeah

# Whatcha gonna do about it...? #

Even assuming you could get the freeholder's permission,

to make these changes, you still need to do your sums

and make sure it's worth the expense of doing all that shifting around.

Would you, could you get your investment back?

Still, even with this current layout,

this pretty, neat self-contained flat,

I just wish it had a little more character.

And actually, there was something else I wish it didn't have.

So, a little test for you now.

You can't see it, but it's expensive

and the shorter it is, the more the value of the flat decreases.

Have you guessed what the issue with the property is?

Yes, it's got a short lease of only 44 years.

However, there is some good news.

Usually, the owner would have to wait two years

before being able to extend the length,

but a section 42 notice has already been served to the freeholder,

which means negotiations can start straightaway.

That does not change the fact, though, that it will cost

thousands of pounds to resolve, so that's worth bearing in mind.

MUSIC: Heart Of Oak by Richard Hawley

That big bill for an extended lease might be more of a priority

than turning this flat back to front.

Let's find out from a local estate agent what she thinks

the potential might be in this flat, guided at £180,000.

Is that short lease going to be a problem?

Having a short lease, it will be impossible to get a mortgage.

44 years, you will need a cash buyer, definitely.

Extending a lease can be costly.

It depends on the negotiations that they're having

between the leaseholders and the freeholders.

And how would that affect the value of the property?

Once this property is renovated, without having the lease extended,

it can sell at a price in between £270,000 to £290,000.

After this flat is renovated and having the lease extended,

it could resale at a price in between £300,000 to £320,000.

So, there's a significant difference

but it all depends on how much the lease costs.

The lease might be less of an issue if this flat were to be a rental.

What kind of figures could it achieve?

Once renovated, this flat could rent out

at the price in between £1,200 per calendar month

and it can go up to £1,400 per calendar month

if it's renovated to a high standard with all the facilities in it.

No, in the words of East 17,

it's not quite a "house" - or flat, in this case - "of love",

but even with its issues, I do like this property

and with some character injected back in,

it could have quite a rosy future.

Who saw the potential? Let's head to auction and find out.

Right, lot 27. It's very, very popular.

I don't know, 230?

Warner flat, must be worth that around there.

230? 230, with you.

235? 235.

240? Nearly.

245. Yep. 245.

250, standing up. 255...

The bidding had been a little slow to get going,

but it soon became clear this was a sought-after property.

When we rejoin the bids, we can see they've shot up to £287,000.

287. 289?

If not, it's going down here at 287, sitting down.

289 either of you? If not, 287.

First time. Going to lose it.

Second time... 289, back in. Nearly. 291?

291? Very close. 293?

291, first time.

Second time.

Third and last time. If you're all done...

-HE BANGS GAVEL

-Sold. 291, sitting down.

Wow! That's more than £100,000 over the guide price!

MUSIC: My Patch by Jim Noir

And that bold bidder was Walthamstow's own Richard.

He runs a property management company, renovating for clients.

So I was keen to find out why this experienced developer

was willing to pay so much and what he plans to do with it.

-Richard, congratulations.

-Thank you very much.

Why did you want to buy this property at auction?

We buy a lot of these sort of style flats, these Warner flats,

so our portfolio consists of quite a few of these.

So, we know them well, we know what's got to be done

and we feel very comfortable with properties like this.

-So, you say, "We". Who is "We"?

-This one's just been bought by me,

but I represent clients in other matters.

I know that you paid £100,000 over the guide price

and you know the area really well. I want to know why you did that.

It's gone up a lot in value over the last ten years.

These flats, at one point, were £50,000, £60,000,

now considerably more.

But I still think there's a lot of growth left in Walthamstow.

In comparison with other parts of London,

it's still cheap for this sort of square footage.

I paid too much money, but this is a long-term investment.

It will be rented out, probably for the next 10, 15 years,

so regardless to what the market does,

I still feel it would be a good long-term investment.

So, it's basically a case of just snapping it up while it's here.

Yes, indeed.

# If you ever step on my patch

# I'll bring you down I'll bring you down... #

Well, Richard paid a lot, but he knows this area inside out,

both as a local lad and as a property manager,

and he's still confident there's profit to be made.

What does he intend to do with this place

to really maximise his income?

It will be completely refurbished.

We're going to have to replaster it throughout.

I would have thought the wiring and heating will need to be updated.

Kitchen, bathroom. We'll remove the pebbledash from the front.

-Are you now?

-Yes.

-You ARE going to remove it?

I was wondering how far anybody would go with that.

Well, it's nearly hanging off, as it is, so it's not got much life left.

And possibly have to sandblast the bricks after we do it.

How expensive is that kind of job?

It's the first time I've ever done it, so I don't know.

I'm so glad you are going to remove the pebbledash

because I absolutely love the big arched area at the front

and it would look much more traditional

with the original brickwork underneath.

It will complement the flat upstairs as well

cos theirs is back to the exposed bricks,

-so we'll definitely look at that.

-Hopefully, it will add some value.

Indeed. It needs to!

Somewhere else where I can see adding value

is a bit of a shift around with the layout.

I'll be interested to find out what you want to do here.

We're going to make this one of the bedrooms

and make the back room the lounge with the lookout onto the garden.

Yeah, good idea.

Even the kitchen, I was thinking, might be much more suited

towards the back of the property.

Yeah, we're not going to change the layout of the kitchen and bathroom

cos we don't want to have start contacting freeholders.

The main layout will remain the same, but the use of the rooms will change.

I think that's fair enough.

This flat is going to be a rental, so that's a good compromise.

Maximum benefit for a minimum spend.

As you'd expect from someone who's developed some 50 properties

since he was 18, he read the legal pack,

so that short lease didn't catch him out.

He intends extending it in two to three years,

once he's generated some income from the property.

-What sort of budget are you looking at to do the work?

-About £20,000.

So you probably know £20,000 is about right

because you have done these flats so many times.

Yes, we're going to do a bit more to this,

like removing the pebbledash.

There's going to be a few extras that I haven't accounted for,

but I'd still think around £20,000, we should be quite comfortable.

-So, what is your timescale?

-Four to six weeks.

We've already got someone interested in renting it

and their deadline is six weeks,

so we're going to have to try and accommodate that.

-Richard, four to six week timescale, £20,000 budget?

-Yes.

-Let's hope you can stick to that.

-We'll try our hardest, indeed, yes.

-Nice to meet you.

-Nice to meet you too.

-Good luck.

-Thanks.

So, Richard is off to an interesting start.

He knows the area well, which is a good thing,

but he thinks he paid too much for the flat - not so good.

Still, he's got plenty of experience and, hopefully,

his confidence won't be dashed by those pebbles at the front.

Join me later on in the programme and find out how he does.

Coming up, in Aberdare, South Wales, I'm trying to help a buyer

break the news about the budget gently.

-So, what's YOUR budget?

-I reckon about 10, 12.

And in Walthamstow,

have Richard's hopes of an easy renovation been dashed?

It was a larger job than what I first anticipated

when we removed the pebbledashing.

It was close to the city of Stoke-on-Trent

and in the Staffordshire town of Longton

we first saw this three-bed semidetached house

with a driveway and garage.

It was bought at auction for £98,500 by local man Lee.

He felt he could add value to this house

but that didn't mean he was holding back on the budget.

For 10 grand, it's a large budget for what you want to achieve in here.

You've given yourself more than enough, I think.

You're probably right. I just didn't want to cut corners.

I've always understood that, if you try and cut corners,

it comes back to bite you in the long run,

so any work that we're going to do, we're going to try

and do it right first time and achieve the necessary standard

that's required for the particular budget of the house.

Former engineer Lee had high standards and was going all out,

not only to refurbish this house, but to do it right.

# Nothing but the best is good enough for me... #

No second best for our Lee and, along with his £10,000 budget,

he hoped, with wife Jan and tradesmen where necessary,

to complete the work in just ten weeks.

So, is this house now up to standard?

15 weeks later, we've returned with Lee and his wife, Jan, to find out.

And the outside isn't giving much away

but it's inside where I was hoping to see some big changes.

Yes, the front room is now sleek and modern.

But it was that tired old kitchen and dining room

that Lee had big plans for.

Wow! That kitchen-diner is quite something.

They say kitchens sell houses and I'm sold on this one.

So how easy was it?

It wasn't so much a technically difficult task

but it required two of us onsite on that particular day

and in a one-day timeframe, we did manage to remove the existing wall

and then we had to manoeuvre 150 kilos of steel beam into position

and that was definitely a two-man job.

-So, it was a big friend.

-A big friend doing a big favour.

But what an enormous difference!

Adding patio doors has brought in so much extra light.

I'm blown away by these changes.

And this wasn't the only place they unearthed

the property's true potential.

I was working upstairs and Lee called me down

and said he'd found something hidden under the floorboards.

I came down and he'd revealed,

underneath the carpet, which was pretty grimy in the hallway,

there was a lovely Minton black and white tile floor.

So, it's been my project, really, or one of the projects,

to get that cleaned up and I think it looks really nice.

Wow, what a find! I love those tiles.

Those stairs in the hallway now lead

up to three completely refurbished bedrooms.

And look! No cupboard love here.

See, I said it would look better without them.

And the bathroom, like the rest of the house,

is finished to a really high standard.

With the garden tidied up and a small bit of decking space,

I think Lee has certainly delivered on his promise.

Work that we've done by ourselves

are the fitting and installation of the kitchen and bathrooms,

full decor improvements throughout

and, in terms of general refurbishment,

the downstairs toilet,

put a new toilet and new hand basin into that zone there.

And while Lee may have done the bulk of the changes, wife Jan,

who still works as a teacher, has made her mark too.

90% of the painting I've done - where I could reach!

And also lots of prep work -

the sugar soap on the doors to get all the grease off

and then the sanding and the painting,

so I've done most of that really.

And grouting of tiles - I'm good at that now.

One thing that didn't quite meet their expectations was the timescale,

which was five weeks longer than they'd hoped.

But Lee had a foot injury which held up the project for three weeks,

so they weren't actually far off their estimate.

Speaking of estimates, they were only £500 over their £10,000 budget,

with an extra spend going to the patio doors and the bathroom.

That's not a massive overspend.

But a £10,500 budget, along with their £98,500 purchase price

does take their total cost to £109,000.

Have they added value to this three-bed house?

What do two local estate agents think?

The standard of finish is absolutely fantastic,

especially compared to others in the area.

Predominantly, they are 1930s builds,

so a property to this level of finish is particularly catching.

The layout's fantastic.

Bringing the dining room into a kitchen-diner

is what all families are after at this moment in time.

It's great for entertaining

or for families spending time in the property.

Lee and Jan want to sell the house on but are they missing a trick?

Could this be a good revenue generator as a rental property?

Rental value, we'd recommend £625 per calendar month.

For the rental market, I would think the property will achieve

a figure in the region of £625 per calendar month.

In terms of those rental values, that's surprised me a little bit,

giving a higher return than I anticipated.

£625 per calendar month would see a rental yield of just below 7%.

But for them, it's the resale value of their £109,000 investment

that's most important.

On the sales market, we'd be looking at an asking price of £135,000.

If I was to sell the property, I would look to market it

at a figure between £130,000 and £135,000.

In terms of those valuations, I think they pretty much fit

exactly where we'd pitch the property ourselves.

-so absolutely spot-on.

-We're happy with that.

-We're happy with that.

So, in the current resale market, there's a potential pre-tax profit

of in between £21,000 to £26,000 to be had.

So have any of the numbers altered their plans for this house?

We've actually sold our own house,

so we're going to need somewhere to live in the interim,

so we're going to move in here.

I'd happily do that for a little while.

We'll move a bit of our own furniture in

but it'll also take the pressure off us

while we go house-hunting for our own next residential property.

-But it will also be up for sale when we're in.

-It will be, yeah.

And as temporary homes go, this isn't a bad place to be, is it?

# Oh, won't you stay

# Just a little bit longer...? #

Another beautiful day in the Valleys -

the Cynon Valley, to be precise -

and the town of Aberdare, 20 miles northwest of Cardiff.

Aberdare held the first Eisteddfod festival in 1861

and was a major publishing centre for the Welsh language.

So let's hope there's some good hwyl in the Valleys today.

So, literally, a hop, skip and a jump from Aberdare high street

is the property I'm here to see, so great location.

What about the guide price? Well, that's good too.

£29,000 plus could have bought you this!

Looks all right from the outside.

Ooh, that's nice!

Really good open-plan feel to the place

the moment you walk through the door.

Basically, one large room, sort of living area, down here.

Stairs up to the bedrooms there. It looks OK.

There's some signs of damp on that wall over there.

Doesn't smell too damp but, hmm, I'll investigate that in a bit.

But then, if you like quirky, you'll love this,

because up these little stairs and...

..it's the kitchen!

It's not exactly huge and the units are a bit old

but there's something about it. Hmm.

You'd probably want to spend a bit of money sorting that out

but, in terms of changing its location, I don't think so.

I like it!

# Where the music is for weirdos

# We like it different We like it strange... #

It IS slightly strange, as layouts go, but there's plenty to like here.

This large open-plan living room feels quite bright.

The only downside, so far, is that damp.

So upstairs, a very workable layout.

Two bedrooms and a bathroom.

It's a good size bathroom, so everything you could want.

But I'm always telling you, when you look round houses,

that you need to use all your senses,

-and when you come up here...

-HE INHALES SHARPLY

..there's just a really...musty smell and I wonder if...

I mentioned there was a damp patch downstairs on the wall

and there's another one... Ooh. ..much worse up here.

Um, coincidentally, or maybe not surprisingly,

on the end walls, often problems with the chimney stack,

flashing around it or whatever,

leading to water penetration down into this wall.

It can only be a little dribble, just a drip, over time,

it just saturates the wall and this is what you're left with.

And rather than just trying to cover it up, you need to sort it out.

# I got a leak in this old building

# Got a leak

# A leak in this old building... #

So, sadly, the bathroom is not the only room with running water here.

However, although it could do with a spruce-up, it's not a bad size.

Unlike the rather cramped second bedroom. Hmm.

This is a property of ups and downs. Time to look outside.

At the back of the property, it's all rather quirky.

You've got this little passageway

and this massive wall which is holding back...

Well, let's find out. ..the garden, I think.

Um, this little landing area here and then it carries on.

It's a good way to get your workout.

It's not the most imaginatively designed garden, to be fair.

It's largely concrete.

But it is a bit of outdoor space and being high up is good.

That's not! Grrr. You've got to know what this is.

This nightmare plant...

..is Japanese knotweed. Recognise the leaves.

Let it be forever emblazoned on your memory.

If you see a property where there is this in the garden,

it is seriously bad.

It is disastrous.

Look, here's the exact example of what it does.

Concrete, concrete, concrete, plant burrowing its way through.

If that gets to the house,

it starts burrowing its way in through the walls and the roof.

Looks innocent, eh? Nasty, nasty, nasty little devil this is!

Not good.

-# Concrete jungle

-It ain't safe on the streets

# Concrete jungle... #

I think my blood pressure is nearly as high

as the Japanese knotweed canes

which, in spring, can grow to seven feet.

This plant can seriously reduce your chances

of getting a loan on a property.

Some mortgage lenders just run for the hills -

or in THIS case, the Valleys!

But others will lend if you've begun treating it.

But beware, even once you've dug it up and treated its roots,

it's expensive to get rid of,

as it's considered contaminated waste

and can only be disposed of at licensed sites.

A local agent advised us that the house, once sorted out,

could earn up to £400 per calendar month

or £59,000 on the open market.

But first, some things to sort out.

Damp, most probably due to a roof problem,

and then this back garden and its unwanted plant life.

It's certainly a great location and a nice house,

but a few issues to resolve.

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

A lot of interest in this, guided at just £29,000.

Start me, will you, at £25,000, somebody.

20, then, if you want. 20, I've got you there. 21, seated.

21. 22. 23.

24. 5...

This property was clearly a popular lot

and we rejoin the bidding at £37,000.

At 37. I'll take a half, if you like.

37, then, for the first time. Second...

37.5. 38. 38.5, new bidder.

39. Bad luck. 39.5.

40. 40.5? No. At £40,000, then, seated.

At £40,000, on my right-hand side then.

For the first time. Second time. Third and last time. At £40,000.

-HE BANGS GAVEL

-Yours, well done. 116.

Paying £11,000 over the guide price

and getting the property for £40,000,

was property developer Rebecca,

who came along with her builder, Anthony, to meet me.

-Rebecca, Anthony, great to meet you both.

-Nice to meet you.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this place.

I've done a few developments now

but mainly buying and selling in the Cardiff area.

Now I wanted to buy to invest and keep long-term to rent out

-and you get a much better return up in the Valleys.

-OK.

Anthony, what's your involvement in all of this?

-I'll be doing the main, well, all the renovation.

-Great.

Depends how far Rebecca wants to go with it.

There's a lot of things you can see

and needs a serious amount of work

but, until we get stuck into it,

we don't know what we're going to come across.

Did you involve Anthony before you bought this place?

Well, Anthony's been really good

and he's saved me quite a bit of money with surveys.

Sometimes you get a survey done, you don't get the property at auction,

so he has been, for quite a few months,

coming along to look at properties for me.

I've not been getting them, they've gone over my budget,

so this time I thought I've just got to get something.

-So, were you with Anthony the first time he saw it?

-Yes.

And what was the general synopsis?

-It was quite dark, wasn't it? It was.

-Always better that way!

-It was night.

-Yeah.

-It's got a major damp problem and a roof issue.

Obviously, it's going to need a complete rewire, new heating system,

new kitchen, bathroom and the floors are very springy.

-# You know the night time, darling

-Night and day

-# Is the right time

-Night and day... #

Given that tale of woe,

maybe it would be best never to see it in daylight

but both of them think a timescale of one month should do it,

with a budget, I'm almost afraid to ask...

-Have you talked budgets yet?

-ANTHONY CHUCKLES

OK, so look away. So, what's YOUR budget?

I reckon about £10,000, £12,000.

Anthony, how much do you reckon it's going to cost

-to do this place up?

-You won't get much change

-out of £20,000, I don't think...

-Oh!

But I don't know...

THEY LAUGH

We might have a few meetings and see what we come up with.

And so, you can tell Anthony now what his budget actually is.

Yeah, about 12.

Mmm, we'll just do upstairs! No!

# You can only have one or the other... #

I suspect there may have to be some middle ground here, at best.

But it's great Rebecca seems so resilient

because she's certainly come through a tough time.

Have you always had a passion for property and enjoyed doing it?

I have, but before, it was more of a hobby

and I would just do one now and again when the children were smaller.

I moved around a lot with my husband's job,

so I couldn't really be close to the project.

-Right.

-I concentrated more on Cardiff because I knew the area.

But I was often living away from Cardiff.

We moved around a lot with my husband's job.

We were living in France and suddenly he passed away,

so it suddenly became something that wasn't any longer a hobby.

It had to be serious, a serious job to support me and the boys.

So we came back to Cardiff, which was where I was born

and where my family are, and I've just taken it from there really.

Over the last two years, it's been a tricky time, a difficult time,

but the boys are settled now and I'm doing this

and it's something that I just have to do.

I can fit the hours around the boys,

school holidays are not really a problem

because I'm not working for someone else,

I'm working for myself and that's what matters.

Rebecca's husband, Pierre, sadly died following a heart attack

when he was just 46, leaving her and her two sons.

You have to admire her courage and determination.

-So how old are your boys?

-They're 13 and 10.

-Are they going to get involved?

-No, they hate it.

-Oh, no!

-They hate it.

-Every time I take them along to a project, they just moan.

-Oh!

-They don't like it at all, so they'll probably keep their distance.

-Really?

-Mmm-hmm.

-That's a shame, isn't it?

-I know, it is.

They might change their minds as they get a bit older.

I'm glad you're around to help out and congratulations

-and good luck with this.

-Thanks, Martin.

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

-Thanks.

Thanks very much. Cheers.

So, property, in some way, going towards helping Rebecca

recover from some fairly tough times.

And, hopefully, with help of Anthony, the builder,

she'll get this place sorted.

However, I am a little bit worried about that whole budget thing.

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

Well, we've seen how one of the builds went,

but what about the other two? Did they go as expected?

Somehow, Martin, I don't think so.

Let's find out what's been happening.

MUSIC: It's Alright by East 17

Back to East 17 now.

No, not a '90s revival but Walthamstow in east London!

And in this famous postcode, I saw a purpose-built Victorian property,

known as a Warner flat, after their designer, guided at £180,000.

And inside...

# It's alright, it's alright

# It's alright It's really alright... #

Yes, it would be "alright" if you made a few layout changes

to this two-bedder and brought out those character features

and removed the crumbling pebbledash from the front,

but something wasn't "alright" about this auction lot.

You can't see it, but it's expensive

and the shorter it is, the more the value of the flat decreases.

Have you guessed what the issue with the property is?

It was, of course, a short lease, with only 44 years left.

But buyer Richard wasn't put off

and paid £100,000 over the guide price at £291,000.

# Alright, alright It's really alright... #

And it really would be "alright"

because this local lad planned to recoup some capital

from renting the property out and renew the lease at a later date.

And running a property management company, Richard had a team ready

to make everything better than just "alright".

# It's really alright... #

-I'm going to remove the pebbledash from the front.

-Are you now?

It's nearly hanging off, so it's not got much life left.

How expensive is that kind of job?

It's the first time I've ever done it, so I don't know.

-Hopefully, it will add some value.

-Indeed. It needs to!

And it needed to add value

to help Richard regain that huge amount spent at auction.

So, how's it looking 12 weeks on?

MUSIC: Queen Of Peace by Florence + The Machine

Well, right away, losing the pebbledash

and restoring the original Victorian look of the house

has made a huge difference.

The first thing we did was remove the pebbledash

from the front of the property.

It was a larger job than what I'd first anticipated.

When we removed the pebbledashing, a lot of the bricks were defaced,

so we had to replace quite a few of the bricks

and we spent around £1,500 to £2,000

on the removal and replacement of the bricks.

Inside, Richard's team have replaced the kitchen,

adding a bright colour scheme.

In the kitchen, we removed the existing units that were there,

replaced the units with what you see,

put an integrated oven and extractor hood

and put some nice walnut worktops in, which I think gives a nice finish.

Tiled splashback, we went for a greeny colour on the walls,

which we thought was a bit different

and we've gone for like a distressed concrete tile on the floor,

so I think it works really well. I'm really happy.

I think the colours work well,

I'm happy with the quality of the worktops

and I'm really pleased with the kitchen.

The bathroom is new too and both bedrooms have been recarpeted

and there's, thankfully, no more textured plaster.

Richard has swapped the living room to the back of the property,

meaning the layout is flexible

but you do get views of the shared garden.

Richard has also replaced all the radiators and 80% of the windows.

He also has a tenant lined up to move in.

He's also got a few snagging issues to sort out,

like sanding and painting the skirting.

He admitted he paid a bit much at auction,

but did he spend a little bit too much over his £20,000 budget?

We exceeded the budget that we set initially.

A lot of that was due to the removal of the pebbledash,

so we probably spent between £25,000 and £30,000 here.

There's just little extra snagging bits, when we started working,

we realised had to be done to give the correct finish.

Richard thinks that when everything is finished,

he'll have spent around £30,000

and, unfortunately, he's also over his six-week timescale.

It took me 10 to 12 weeks, which was longer than we anticipated.

At the same time as we started this job, we did have other jobs

which were ongoing and that took precedent over this.

And also, I'm getting married in the next few days,

so a lot of my time has been taken up with my upcoming wedding.

Upcoming wedding?! Richard!

I hope your wife-to-be hasn't been left

to sort out all the catering and flower arrangements all on her own!

To be fair, I preplanned a lot of this work before,

knowing the wedding was coming.

We'd preplanned and scheduled everything.

But it was difficult, running a few projects at the same time,

to fit it all in, but we managed to get there in the end.

Well, the next project will be to the sound of wedding bells

but will Richard ring a profit here?

What did two local estate agents think,

starting with the agent who saw it first time?

Having a look around at the flat,

I think it's been refurbished to a very nice standard.

The layout is pretty much the same as it was at the beginning.

It's nice but I would have changed it a little bit.

I would move the kitchen at the back where is the exit to the garden.

I think the colour scheme is something different to normal.

Normally, we're looking at magnolia type of properties

and the decor is very modern and just the sort of thing

first-time buyers or people looking to rent would be interested in.

There's a massive demand for this type of property.

It's called a Warner and in this area, they're very sought-after.

Richard's total spend is £321,000

but extending that lease could cost up to £50,000.

The agents believe, with an extended lease,

the property could sell for a maximum of £385,000

and that would give Richard a potential pre-tax profit

of £14,000 against a potential spend of £371,000.

I'm happy with those resale values.

The aim is not to sell this, so really, they were irrelevant,

and I know the price I paid was the full price at the auction.

But it's good to see that, even on that fuller figure,

there's still a little bit of profit to be made there.

Richard is planning to hold on to the flat for the long-term

and rent it out. So what could it fetch on the rental market?

This flat would rent for approximately £1,400

per calendar month.

This flat could let at a price between £1,200 per calendar month

and if it's finished to a high standard, like this one,

can go up to £1,400 per calendar month.

Those rental valuations are fine.

We've got it let at £1,350,

so it's in between the prices that those agents have given.

We probably could have got more but because it's a recommendation,

we feel more comfortable letting it to that person

for a slightly lesser price.

Renovation complete, tenant secured.

Now he just needs to press his wedding suit.

Richard, from all of us on the team at Homes Under The Hammer,

congratulations!

So now we've got the flat finished,

I'm now onto my wedding which is scheduled for three days' time,

so I'm looking forward to having a pint, putting my feet up

and relaxing at my wedding.

MUSIC: Big In Japan by Alphaville

Earlier in the show, I was in Aberdare in South Wales

to see a two-bed mid-terrace, guided at £29,000.

It had a strange layout, a tiny second bedroom and a damp issue.

However, it was what was lurking out back that had me worked up.

Grrr! You've got to know what this is.

This nightmare plant is Japanese knotweed. It is disastrous.

Look, here's the exact example of what it does.

Concrete, concrete, concrete, plant burrowing its way though.

# It's easy when you're big in Japan

# Oh, you're big in Japan tonight

# Big in Japan... #

This was a big job - in Japan or not. See what I did there?

But damp and problematic plants didn't dissuade developer Rebecca.

She came along with her builder, Anthony,

to tell us about the plan for this property

and it seemed that when it came to the renovation budget,

things hadn't quite been settled.

So, have you talked budgets yet?

ANTHONY CHUCKLES

OK, look away. So, what's YOUR budget?

I reckon about £10,000, £12,000.

Anthony, how much do you reckon it's going to cost to do this place up?

You won't get much change out of £20,000, I don't think, but...

-THEY LAUGH

-Well, whatever budget it was,

they thought a timescale of one month should be enough.

But we're now back 14 months on.

Anthony had done some of the work

and then a new building team took over and now tenants have moved in.

Given how good it's looking, it's been worth the wait.

# Baby, we can do it Take the time, do it right

# We can do it, baby

# Do it tonight

# Baby, we can do it Take the time, do it right

# We can do it, baby

# Do it tonight

# Take your time...#

While Rebecca and the team have done a great job,

it certainly took a lot longer than expected.

The biggest challenge, really, was the timescale.

The original timescale was a month

and the actual time the work took was about six weeks.

The problem was that we had big gaps in between

when no work was being done at all.

So, definitely, the biggest challenge

was trying to get the building complete and rented out.

And sometimes, that goes out of my control.

# Take your time... #

Rebecca dismantled a kitchen but the damp could only be fixed

by fixing the roof and that was hampered by bad weather.

The roof came off completely and that took a bit of time

and, of course, that's an expensive job but well worth doing

because I'm going to be hanging onto the property long-term.

The damp was terrible. The roof was in a worse state than I'd thought.

One morning, the bedroom was completely saturated

and it took a long time to dry out, even once the roof was repaired.

We had heaters on

and we had dehumidifiers going almost constantly.

It's an old house. Stone takes a long time to dry.

Thankfully, the house did eventually dry out

and that allowed the team to get stuck in.

New kitchen, tiling, new bathroom, tiling,

new flooring throughout, new boiler.

We've done basically everything you could possibly do in a house, yeah.

And that includes getting rid of the Japanese knotweed,

which was professionally removed by the council.

And with that knotty issue resolved,

how's the other knotty issue, the budget?

Did Rebecca stay anywhere near her £10,000 to £12,000 figure?

I went over my budget, as I usually do. It's just the way it goes.

The roof cost more than I thought it was going to.

-It was entirely replaced.

-Rebecca spent a total of £17,000.

But is she pleased with the end result?

I'm really happy with the finished product.

I know it cost more than I'd anticipated,

but I am really happy with the work that's been done.

The guys did a fabulous job. It wasn't the easiest job to do.

Um...the damp was a real issue, so clearing that up was great.

But it's just a nice little house.

And along to this nice little house,

we've invited two local estate agents.

What are their thoughts on Rebecca's renovation?

Very nicely presented and decorated to a nice modern standard

and in a good location.

Standard of finish is very good.

The vendor's obviously put lots of time and money into the property.

The main selling points are there are two double bedrooms,

one with fitted wardrobes and it's got a nice bathroom

and a nice flow to the lounge, dining room,

straight through into the kitchen.

Rebecca intends hanging on to this property for the time being.

If she were to sell it, would her £57,000 investment mean profit?

The sale value to this property

would be in between £70,000 and £75,000.

In the sales market, I'd expect this property

to achieve between £75,000 and £80,000.

That top figure could mean a potential profit of £23,000,

minus the usual taxes and expenses.

However, Rebecca is really focussed on renting this for now,

so is she achieving the market rate for rental?

On the rental market, I'd hope this property to achieve

between £375 and £400 per calendar month.

The rental value on this property

would be in between £375 per calendar month

and £400 per calendar month.

That top figure could mean a yield of 8.5%.

Could her mind be changed by the potential £23,000 profit?

I'm absolutely astounded, actually.

I honestly didn't think we put that much value on the property,

so I'm amazed. I am amazed, although it's not...

That wasn't the idea. The idea is to keep hold of the property.

It's been done to a really good standard.

The builders have done a fab job

and it's a good one to keep, to rent out for the foreseeable future.

And the foreseeable future is about doing more property

to support her sons, Remy and Louis.

Does that mean she'll have two pairs of helping hands on future projects?

My boys are not interested in this.

Any time we go anywhere near a DIY store,

it's big groans all round and they stay in the car.

They won't even come in with me.

So, more inspirational people and properties in today's show.

Yes, and plenty more properties for you to think about.

Yeah, come and see more next time on Homes Under The Hammer.

-Goodbye.

-Goodbye.

-Goodbye.