Episode 71 Homes Under the Hammer

Hello, welcome to the show. Now, to be a successful property investor,

it helps to have an eye for a bargain.

Yeah, to be a better property investor, it's

always good to know why it's a bargain in the first place.

Yes, there is always a reason for those low prices.

So if you've got a bit of property know-how, put it to good use

and buy your next home under the hammer.

There's no way to avoid problems as a property investor,

but there are ways you can make things go a little more smoothly.

Yes, always read the legal pack and any other information you can

lay your hands on, and then give it a go.

So what did the buyers on today's show actually go for?

In Liverpool, there's a house with a missing ingredient.

Most of all, these providers

would want to see a working kitchen and a bathroom.

And I don't think that would suffice.

In Stoke, there's a terrace with a clean bill of health.

No obvious signs of damp and no cracks as well. Perfect.

And in London, there's a smell of...

hm, not quite success, I'm afraid.

And the first thing that really hits me is the damp!

But you can really smell it.

All these properties have been sold at auction.

We'll find out who bought them and how much they paid

when they went under the hammer.

Under half an hour's drive from Liverpool city centre lies Huyton.

Huyton's notable not only for its good transport links

and shops but as the home to four mop-topped young lads whose

band changed the entire course of popular music forever.

# Oh, if you find the time Please come and stay a while

# In my beautiful neighbourhood. #

'90s indie band Space. I loved them.

Uh, who did you think I was talking about?

So, on the border between Huyton and Broad Green,

not far from the beginning of the M-62 motorway, and a short

drive into Liverpool city centre is the property I am here to see.

70,000 quid, three-bed, semidetached. Boom.

# Boom, shake, shake Shake the room

# Boom, shake, shake Shake the room. #

Well, for a guide price of 70,000,

I sincerely hope this house doesn't shake.

Time to check out the inside.

OK, so what have we got?

Smallish little entrance area here,

but lots of light coming into this bit, which is good.

Stairs up to your bedrooms.

And so along the hallway I'd normally expect, what, a kitchen,

back sitting room? Oh, no.

This is odd.

This is what I imagine was originally one of -

if not the only - bathroom in the property.

And for starters, downstairs. And secondly, it is very dark and...

and I just...

As layouts go, it's not ideal.

Because, actually, the rest of it is OK.

You come through that door there, you've got this really nice,

open-plan sort of living/dining area.

Sort of through kind of feel.

So this is good. That bit is a bit odd.

So it needs a bit of playing with. But let's continue.

So I imagine, at one point, the house would have ended here.

And I get a feeling this is an addition to the property

added on at a later stage, which now creates a really good-sized kitchen.

Well, it is the sort of kitchen which of course throws up all sorts

of issues when it comes to getting a mortgage, cos most

mortgage providers would want to see a working kitchen and a bathroom.

I don't think that would suffice.

But it is a nice-sized space.

And you've got views out to the back garden.

And so, as downstairs go, pretty darn good.

And upstairs, as you'd expect, are the house's three bedrooms.

In addition, though, is the shell of what clearly used to be a bathroom.

Now, I don't know why it was moved,

but if you want this house to appeal to a family market,

then you could do a lot worse than reinstating the bathroom here.

Well, out the back of the property,

and you can see exactly what that kitchen is built in.

Obviously, an extension.

A flat-roof extension, which can be a bit of an issue.

It is not that pretty either, is it?

And obviously, you can see the back of the garage there.

So if you look around on the street -

that's always a good thing to do - see what other people have done.

You can use that for inspiration.

Next door, of course, amazing extension stuff going on.

So I think there is a possibility of incorporating that a bit

better than it currently is.

Because I think at the moment, it could be quite problematic.

But out the back here, a really nice thing. A good-sized garden.

And, you know, you get this feeling of sort of leafy suburbia.

And it is really rather pleasant.

# I'm just a jealous guy. #

Yes, I've got house envy.

This house is a developer's dream as it is a blank canvas.

If you are developing to sell or rent, just make sure the cost

of any structural changes

doesn't exceed the ceiling price for the area.

Time to ask an agent from the auction house who sold it

what he thinks of this three-bedroom

house guided at ?£70,000.

There is comprehensive work to be done. But I think

with the right work done,

this will appeal to a broad range of buyers.

And I would expect this to sell

relatively quickly on the open market once finished.

Comprehensive work usually means a significant budget,

so how much does he reckon you would need to spend to bring this

up to spec for the local market?

Depending on your contractors, I believe you would be

looking at in the region of £20,000 to get this into suitable condition.

With a guide price of 70,000 and a potential renovation budget

of 20,000, would this make a profitable venture?

What could it sell for?

I believe this property could achieve

a figure in the region of £120,000 once renovated.

And if you were to rent the property?

I feel this property could certainly achieve a figure

in the region of £600 per calendar month.

So a few issues to sort out, but intrinsically,

you have got yourself a really nice house here in a lovely area.

So I'm sure it was a popular lot when it went under the hammer.

Lot 25. There it is there. Again, a good healthy level of interest

prior to the sale. Bid me 70,000 for it. 70.

60 to start me, 60.

50,000 then. 50.

50,000 for it.

There we are. 50,000. At 50,000, lot 25. 50 is bid. Two now.

At 50,000. Two. 54. 56. 58.

Well, the auctioneer had to work hard to get that going.

But whilst he did, things soon picked up.

We rejoin the bidding at £67,000.

67.

500.

68.

500.

69.

69.

Ahead of me now.

£69,000. Are we all done? Are you out this time?

£69,000.

Anyone else on this? It is 500 again.

Why not? 70.

69.5.

It turned out there had been a little bit of confusion

and that bid of £69,500 was retracted.

So this gentleman's bid of 69,000 was the successful one.

I'm selling in front of me at 69.

69,000.

And that successful bidder was Andy,

who bought this with his brother and business partner, Matt.

They run a building company together

and have been developing properties for a few years.

So it is time I met up with him to find out more.

-Andy, good to meet you.

-Good to meet you too.

-Congratulations.

-Thanks very much.

-Tell me why you wanted to buy this house then.

Um... I didn't particularly.

-ANDY LAUGHS

-I didn't particularly. No...

The morning of the auction...

Decided we wanted to go to the auction, have a look.

So we did some research, mostly online,

and then literally spent the morning

of the auction driving around about three or four possibles.

-This was one of them.

-The morning of the auction?

Yeah, yeah.

Driving around three or four properties you might buy

-the same day in that auction that day?

-Yeah.

I'm not normally that frivolous.

I normally plan things a little bit better than that.

I was actually late to the auction as well

because I decided to come have a look at this property.

I don't know the area, but I did my research.

It is all about research, research, research, isn't it?

That's what it is about.

-Yeah, but you didn't do any!

-Well...

I did for half an hour.

I think Andy is trying to do a touche on me.

Research, research, research, indeed.

It would appear, though,

that Andy is a man who takes things in his stride.

-So is this what you do full-time?

-I'm actually an engineer by trade.

And after university, went to work at a big car company.

-And then I got leukaemia.

-MARTIN GASPS

So this was like 15 years ago. And it kind of... It was one...

It was that catalyst, basically,

for me to decide to do something different.

I'm in remission now, so everything, you know, is OK.

But sometimes you have a life-changing event

and you decide, "OK, well, you know, maybe I shouldn't be working,

"you know, in a big factory and go out and do my own thing."

I don't know... I looked at property then.

I had a couple of...bought a couple of rental houses and liked it.

And enjoyed it.

I liked being self-employed.

So, yeah, it is quite a change of direction.

Sometimes you need a kick up the backside, you know.

Obviously, quite a severe one.

But it makes you a better person, I think, really.

Wow. Andy's clearly had to fight.

And I'm so glad to hear he's recovered

and enjoining a new lease on life and developing property.

And I'm glad he still has that positive spirit,

because he needed it again

when he found out his bank deemed the property unmortgageable.

Your financing fell through?

-Yeah, it fell through.

-MARTIN GASPS

So we had to do some work to get..to scrape some money together.

What was the thing they didn't like,

the fact that it hasn't got a proper kitchen or what?

Yeah, I think that the place was pretty tired.

And I can understand from the surveyor's point of view,

-you couldn't have let the place the next day.

-Right.

But a few sleepless nights then, I would've thought.

Yeah, but it is part of the game, isn't it?

THEY LAUGH

Well, it is good you are so stoical about it.

Yeah, well, you've got to have nerves of steel sometimes.

But, you know, it's a big boy's game, isn't it? If you...

If you're phased by it, then you shouldn't really be doing it.

Well, you've got to love his attitude,

but really, Andy's lack of proper research could have cost him

a lot of money and, ultimately, the property.

Still, a small thing like no financing - ha -

couldn't keep him down.

So now it is time for the hard work of getting this house back

to its best.

So tell me what you are going to do to sort it out.

Basically, new kitchen, new bathroom, sort the garden out.

Get that landscaped.

And then a new bathroom.

So obviously, this room downstairs, a bit of a strange one,

-with a loo in it.

-Hm.

-What are the plans for that?

-Um, we looked at that.

It was the downstairs bathroom.

And I think we decided probably the best thing to do would be to

change that back into a living room.

And then underneath the stairs,

-the plan is to put a downstairs toilet in there.

-OK.

So we don't lose the toilet, but we get another reception room.

-And then the actual bathroom upstairs?

-Yeah.

The bathroom upstairs, it's quite small,

but we've worked out we can actually get a bath in there.

If we get some nice vanity units for the toilet and the basin,

it should work out.

But that's why I thought we'd be better to keep, you know,

keep the toilet downstairs.

So, obviously, for a family house, it would work better.

But the downstairs bathroom, it was in a real state. Pipes were...

You know, pipework in the walls and in and out. I hate that.

I like nice, clean, smooth lines.

Is the idea to do it up and sell it on or to rent it out?

Yeah, do it up and sell it on.

We're planning to turn it around as quickly as possible.

-Hopefully, sort of four, six weeks.

-Right.

Probably spending about 15 on it.

I tend to do other...

I run the building company, I am hands-on as well,

so that's on the tools as well.

It is a family business, really.

-We've got two of my sons working for me.

-Oh, great.

-One is a painter and decorator, one is a gardener.

-Right.

So it helps keep it in the family, really.

And you, your skills are what?

-I'd describe myself as a jobber, I'd say.

-OK.

I can do a bit of everything.

But, yeah, I put my hands to anything, really.

-I think the only thing I won't do is plastering.

-Right.

-Or roofing.

-Right.

-I don't like heights.

Well, listen, congratulations. Good luck with it.

-Really nice to meet you.

-Great, thanks very much. Cheers.

Well, listen, you know I have got to tell Andy off, don't you?

He did break so many rules

and you can see the kind of problems it can create.

He has been very chipper about the whole issue about raising finance,

but that could have been a complete deal breaker.

Yes, so lessons to be learned.

However, it does seem like he has got a good place here

and we wish him all the best sorting it out. How will he get on?

You can find out later in the show.

Stoke-on-Trent is made up of six different towns that came

together as one in 1910 and gained city status in 1924.

Now, all across these towns are plenty of amenities

and popular visitor attractions.

Recent investments at the local university should mean

a bigger influx of young people looking for student accommodation

in one of these pockets of Stoke.

So here in Hanley, which is one of those six towns,

is the auction lot I'm here to see.

And it is this.

It's a two-bed, mid-terrace house with a guide price of £32,000+.

This house is looking very spick-and-span from the outside.

It is well-maintained with only a few tiny bits of paint to tidy up.

This area is currently being regenerated to encourage

first-time buyers.

It is really close to the centre of Hanley.

And Hanley is the commercial hub of Stoke.

So we are off to a very good start.

OK, the two things I do look for when I am

looking round a property are damp and subsidence,

because they are the two that can cost you a few quid.

Now, so far, I am liking what I am seeing.

It is a decent sized front room.

We've got central heating, double glazed windows.

And I can see down there, you've got a new fuse box.

Might have to put some new flooring down, but it is a nice start.

Into the second reception room, and pretty much the same.

Same flooring in here. No signs of damp as yet.

More double glazing, which is great.

Let's have a look upstairs. I hope it doesn't let me down.

# Don't let me down

# Gently if you have to let me down at all... #

I've got a good feeling.

These two reception rooms are in decent condition,

but I think the flower power wallpaper would have to go.

# Don't let me down. #

So, upstairs, we have the two bedrooms -

one on this side and one here.

Both double bedrooms, both got double glazing as well.

But I have noticed there's a little bit of electrical work

that needs to be sorted. Quick fix, though, not a problem.

The thing I am happy about is there's no signs,

or should I say no obvious signs, of damp and no cracks as well.

Perfect.

# Home and dry-y-y. #

Actually, not quite home and dry.

Because while I am seeing two decent sized bedrooms,

have you spotted what is not here?

Yep, it's the bathroom.

It is positioned off the kitchen downstairs, which is

fairly typical for this style of house in this area.

So far, so good. Into the kitchen. It is a decent sized space.

It is a bit dated, so you would want to take it out

and start again, put something new in here.

And you've got the bathroom to the back of the property there.

It all seems to be...OK at the moment.

That I don't like, here.

Unfortunately, there is a bit of damp just there.

Top of the piping.

We have got a bit of staining around the pipework

and on the ceiling and a little bit down the walls as well.

It doesn't seem to be too bad,

but that is the only problem I can see with this property.

The rest of it seems to tick a lot of boxes.

But still, get that checked out.

That damp could be coming through the roof in the single-storey

extension that houses the kitchen.

I'd make it a priority to get that fixed ASAP.

But even with that extension out the back here, there is

still a decent sized yard and access to back lanes.

And I think this is another useful area.

This little house certainly hasn't let me down.

With a guide price of £32,000, it's time to find out

if an agent from the auction house agrees with me.

First impressions of the property is that it is very typical

for this age of property in this area.

It is really mainly cosmetic improvements.

It's already got central heating, there's already double glazing,

so it is quite easy to improve this property.

To resell the property, I would suggest the kitchen

and bathroom would probably have to be replaced to maximise the value.

Alternatively, as a rental property, I think it is

really quite minimal improvements would be required.

Let's look at the numbers.

With those two options, first, if you were placed the kitchen

and bathroom, how much could this resell for?

If the property was renovated to a high standard throughout,

I would estimate the property would be in the region of £60,000.

That's not bad if you get it for the guide price of 32 grand

and spend 15,000 on it. That could still mean a tidy profit.

What about rentals?

I would anticipate a rental income

in the region of £400 per calendar month.

If this property goes for anywhere near the guide price, then

even including a few thousand pounds to do the work,

you could still make a good yield of at least 10%.

This seems to me like a pretty straightforward

two-up-two-down refurbishment.

You have got the issue of that damp, but I've seen a lot worse.

Let's see who was after a pretty simple project

when it went under the hammer.

Lot 23. So, what shall we say?

30 to get it going?

Took you. £30,000 seated.

At £30,000.

31 in the aisle.

32. 33.

34. 35.

No. At 35. The bid is in the aisle.

36, standing in the middle there. At 36.

37.

38.

No? 39 on the phone.

40?

40.

41 anywhere else?

If not, £40,000 once...

£40,000 twice....

Third and final time, £40,000...

41. 42, sir? A half?

41.5.

42, sir?

Yep, 42. Another half? 42.5.

43? No. At 42.5 then, in the middle.

42,500 once...

Twice...

Third and last time, 42.5...

You bought it, sir, well done.

A successful bid of 42.5 grand,

10,500 over the guide price, was made by Des from Birmingham.

Des has one other rental property which he bought ten years ago.

# Second time is so much better Baby

# Second time around... #

I met with Des back at the property to find out his plans.

-Des, nice to meet you.

-Nice to meet you, Dion.

-Congratulations, sir.

Thank you.

Tell me about the auction, were you happy with what you paid?

Not really, no.

-Oh, dear. That is not a great start.

-I know.

I set myself a price of £40,000.

I didn't want to go a penny over.

But when I got there on the night, I thought,

-"Well, just another thousand pound will do."

-Oh, no!

-Another 500...

When I got to 42,500, I thought, "No, that's it, I've had enough.

"No, no more."

-That was it?

-That was it, yeah.

-You got lucky.

-I got lucky, yeah.

That was my last and final bid.

Ah, the auction fever.

It can be so easy to spend more than what you intend.

Anyway, I still think this can be a winner

if he doesn't get carried away with the renovations.

So what are your plans now?

Basically, just to paint it.

Flooring...

A new kitchen, new bathroom.

And that's about it, really.

-But I am setting myself a very tight budget.

-OK, give us the budget then.

About 2,500 to 3,000.

-OK.

-Not much more than that.

And within that budget, what is going to take the bulk of the money?

The bulk of the money, the kitchen. It is not that big a kitchen.

It really needs re-tiling.

Especially on the floors. And units and that's it.

And the bathroom at the back, are you going to do the same there?

Yeah, I'm going to refit the bathroom. I may still keep the bath.

The bath looks like quite an expensive unit.

But the toilet and sink may have to go.

-But I'm going to tile it and paint it and that's it.

-Is that you?

-You said, "I'm going to tile it."

-Yes, yes.

-Are you really?

I am going to do the majority of the work myself.

I've got a friend who is a kitchen fitter who will refit

the kitchen for me.

And I've had another person here up

until last night doing the plumbing and checking out the boiler.

Well, he's going to need to pull in a few favours with that budget.

It is a little tight. So is the timescale equally tight?

How long are you hoping it's going to take to do that?

Hopefully, six to eight weeks.

Cos I'm going to be working on weekends.

So basically, it'll be fitting into my spare time.

You are looking to use your spare time

cos you've got a full-time job?

-I'm a lorry driver, truck driver.

-Are you really?

You do a lot of hours.

-An awful lot of hours.

-HE LAUGHS

-And the hours that are left in the day...

-Uh-huh.

-No, I won't be working during the day, no.

-Oh, OK.

When I finish during the day, I'm too tired to do anything else.

-So at the weekends - Saturdays, Sundays - you'll be here?

-Yeah.

-And Monday to Friday you're working.

-Working, yeah.

-You'll be shattered.

-Yeah. I've done harder work.

But after about six weeks, everything should be done and

I'll be able to rent it out, so I can relax and have a nice holiday.

# Time to go truckin', baby... #

So lorry-driving and developing, Des is definitely committed.

He's hoping he can rope in his partner, Lorraine, for help

on the decorating front,

but he's also got some friends that are quite skilful too.

-A friend of mine called Peter...

-Yes.

..he's a professional all-around maintenance man.

Apart from doing kitchens, he does everything else.

-The only thing he won't touch is electrics.

-Yeah, good.

-Yeah.

And I am actually a qualified electrician,

so I can do the electrics myself.

-Everything is sorted.

-There you go, yeah.

Also, I've got her friend called Selvin, he's a gas fitter,

so he does all the gas work, plumbing work and stuff like that.

So, yep.

-There's your team.

-There you go.

-Your team is your mates.

-Yes.

-Should be a dawdle.

# I'm truckin'... #

I say it's a dawdle, but have I jinxed it?

There is that one issue of the damp patch.

Unfortunately, I found that out the hard way.

I was here yesterday, it was really coming down.

I happened to walk into the kitchen

and I thought, "I can hear water dripping."

Looked up and saw it.

But hopefully, it is not a major thing.

I wasn't expecting any major work here.

Cos when I first saw it, I was quite impressed by the front door

and the windows and so on. I realised that quite a lot of money

has already been spent on the property,

so I am literally giving it a lick of paint, tarting it up

-and that's it, it's ready to be rented.

-Should be a doddle.

-Yeah, sure. Great.

-Des, good luck.

-Thank you.

-I wish you all the best.

-Thanks, Dion.

-A pleasure.

-Bye-bye.

So between Des, his friends and his partner, Lorraine,

they seem to have a lot of bases covered.

But will that damp catch them out?

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

Coming up, in South East London, my imagination runs away with me.

You could pack planting along the back wall.

It just needs a bit of painting.

And in Stoke, truck driver Des is on a bit of a learning curve.

I thought painting was simple,

but it does take an awful lot of time to have it done properly.

We are back in Huyton, in the suburbs of Liverpool, to see

how Andy got on with that three-bedroom semi

with a guide price of over £70,000.

He bought the house with his brother, Matt,

who couldn't make it along to the filming.

# My beautiful neighbourhood. #

He had originally trained as an engineer,

but Andy changed direction completely

when he got seriously ill with leukaemia.

It was that catalyst, basically, for me

to decide to do something different.

I am in remission now, so everything is OK.

But sometimes you have a life-changing event and you decide,

"OK, well, maybe I shouldn't we working, you know,

"in a big factory, and go out and do my own thing."

Andy wasted no time setting up a building company

with his brother, Matt.

Until last year, that had been taking up all of their time.

They decided to buy this semi to start their business

in renovation development, and they picked a house with

plenty of problems - or do I mean opportunities?

This is odd. This is what I imagine was originally one of -

if not the only - bathroom in the property.

And for starters, downstairs.

And secondly, it is very dark and it just...

As layouts go, it is not ideal.

In fact, there wasn't much that was ideal with this sorry semi.

As well as the small matter of a completely missing bathroom,

there was a mostly missing kitchen.

Andy and his brother paid £69,000 for the house

and reckoned they could refurbish it for £15,000

in around four to six weeks.

Well, we've come back 12 weeks later to see how they got on.

The back garden is now green and pleasant land.

And inside, it just gets better and better.

So, in the kitchen, we had a small fire just by the back door.

All the walls were blackened and sooty.

So in the end, we stripped the whole kitchen out,

re-skimmed everywhere, and a new kitchen.

Quite pleased with the layout. It is much better than the original.

The old layout downstairs had something that was almost

a bathroom.

But Andy had a better use for that dank little space.

It was quite dark in there. And it had a frosted window in there.

So what we've done is we've changed that to a clear window

and we've also put a skylight in the garage.

That will just bring a bit more natural daylight into that room.

What they have now is a very family-friendly study.

And even more family friendly, right next door, under the stairs,

they managed to squeeze in a downstairs loo.

Upstairs now boasts a proper fully-fitted bathroom.

This was just like a cloak room, really, in the front room up there.

We've managed to put a bath in, so we've got a full

three-piece suite in there now with some nice vanity units.

The rest of the layout up here was pretty sound,

so the three bedrooms had been re-plastered where required

and spruced up so they're good to go.

And how big a job was that transformation of the back garden?

Outside, the garden was really overgrown.

It took a few days just to clear everything.

We rotavatored it all and then re-turfed it.

And it looks just much more presentable now.

Originally, Andy set the budget for the refurb at £15,000.

They thought they could turn the house around

in four to six weeks.

The budget came out at about £17,000, which is

probably about right.

We did a couple of extra jobs, things like the roof lights,

changing an extra couple of windows.

And the toilets, I think,

was an extra we hadn't sort of originally thought of.

And really, externally, it probably took a little bit more than

we thought in the back garden, but quite happy with the figures.

Adding a downstairs loo is always a good idea if you can squeeze it in.

And I think that skylight,

while it is not the most traditional resolution, it does let in light.

Andy and Matt bought the house for £69,000 and spent

£17,000 on renovating it, bringing their total spend to £86,000.

It's time to see what two local estate agents think of their work.

Two or three things that I really like

the thought about the room downstairs, the study room,

they've actually put a VELUX window

in the garage to have natural light coming in there.

That's quite thoughtful, cos otherwise, it would be dark

and dreary. And also the garden was like a forest.

You couldn't see the back of the fence.

And now you can see a clear garden with lovely, lush, green grass.

It is an ideal first-time buyer/young family home.

And they can grow in it. It has got place to expand the family as well.

So, what do the estate agents think the property would sell or rent for?

The property will achieve on the sales market

£130,000, and on the rental side,

£675 per calendar month.

In the current market, from a sales point of view,

the property should achieve £130,000.

From a rental point of view,

it should achieve £650 per calendar month.

The sales valuations would give Andy

and Matt a potential profit of £44,000 before taxes and fees.

But the big question is, will they sell it on or rent it out?

We originally planned to sell it,

but because of the increased value, we actually thought,

"OK, we can keep it, get a better rent than we originally thought

"and get some money out of it as well."

We've actually had our tenants come yesterday and we've agreed

around 675 per calendar month. Really pleased, yeah.

That would give Andy and Matt

a healthy yield of over 9% on their investment.

So what's next for the brothers?

That was the first one.

It was a bit nerve-racking because literally,

I took my coat off, sat down, and this property came up.

So a bid within 30 seconds of sitting down.

Within 60 seconds of sitting down, I'd actually bought the property.

But, yeah, I think it was an interesting

and enjoyable process, so I probably will buy at auction again.

This is Charlton in South East London.

If you've not heard of it before, it is located east of Greenwich

and west of Woolwich.

It's an area that hasn't really been touched by the redevelopment in

and around the Greenwich Docklands,

so it still retains a London village kind of feel with

a number of traditional businesses all along the high street.

Although, there are major changes on the horizon with

the opening of the Crossrail at nearby Woolwich Arsenal,

which has caused a huge uplift in prices here.

Now, I hope you can hear me,

because there's no getting away from it. This is a really busy road!

Cars and bikes hurdling past with a dual carriageway

in both directions.

Now, that is issue number one.

But issue number two - parking around here, well, it's not

easy because there are single yellow lines all the way along here.

But I'll tell you what, the guide price for this two-bedroom flat

is £100,000+,

which sounds very reasonable for London.

# London calling to the far away towns... #

Yeah, it is relatively rare to find properties for that

figure in London these days.

But it could be factors like the busy location,

the building looks a little tired and there are some commercial

properties which just might affect mortgageability.

So time to head to the lower ground.

So far, well, the communal hallway is less than impressive -

dark, dingy, cracks on the wall...

And is that damp I smell?

So, once you're down all those stairs, you are in the flat...

-SHE INHALES DEEPLY

-And the first thing that really

hits me, and I know it is a basement flat and it is so notoriously famous

for it, is the damp! But you can really smell it.

It is very pungent indeed, which is a bit of a worry.

But the kitchen here, fantastic space. It really is.

And it looks like a kitchen that you could perhaps keep.

End of the corridor...

And, on a positive note, it feels really, really spacious.

You've got a separate loo here.

You've got a lounge and a bedroom and a bathroom.

A nice long corridor, so it feels very open.

Through into bedroom number two, if you like.

It is easily a double. You know, it doesn't look too bad.

It's not crying out for decoration, although it wouldn't hurt.

Something that is concerning me is what I can see out the window.

I do think you've got a bit of outside space.

It looks a bit worrying. I'm going to investigate.

Oh, no, it is a shame that we don't have smell-o-television

for this flat, because that damp...

"Ugh, yuck!" is all I can say.

# Lord, I smell trouble up ahead of me... #

That can be a costly job to sort out.

But the expenses aren't all about the inside of the flat, I'm afraid.

Now, I love a bit of outside space thrown into the deal.

Always good to have somewhere to come outside and get some fresh air.

And this is a big space...

But just look at it.

Whoever takes this on needs to get a skip.

Now, I don't know where they are going to put the skip,

but look at all this!

A big clean-up needs to take place.

But it could look absolutely fantastic.

You could have planting along the back wall.

It just needs a bit of painting.

You might even be able to get independent access through

this door here into the basement flat.

It could be brilliant!

At the moment, it's just none of those.

Absolutely.

Now, this is a shared back yard,

but with a little bit of imagination,

it could transform this property.

# Just my imagination

# Running away with me... #

The flat also comes with a small courtyard at the front

of the property.

Yes, it is a bit dark and feels hemmed-in,

but still, any outside space is London is a bonus.

And at least this is private.

A few pot plants could make all the difference.

But back to the issue of communal areas

and my biggest concern with this flat.

Now, I know I always tell you to read the legal pack, as you should,

but it might not always contain all the information you need.

And one glaring omission in this instance is

the cost of the service charge and the possibility of future

building works taking place in this block.

I would make it my business to find out two important details.

First, what are the annual communal charges for the upkeep

of the building?

And secondly, given the condition of the building,

are any works planned and could there be a big bill to follow?

The good news is, the lease is not a problem.

There is 88 years left to run on it.

We invited a local agent along to find out his opinion

on the property.

The flat itself is actually well proportioned.

It is quite a good size - two double bedrooms,

decent sized living room, good-sized kitchen.

It is a bit damp at the moment. It has got a lot of damp smell

in all the rooms. But overall, it has got a good proportion to it.

I think the fact that you don't have any

information about the service charge is a big worry

because the building itself does need a lot of attention.

So, as I suspected,

major concerns about that elusive service charge.

So what about the resale value of this property?

Once renovated, I think this flat can sell for £220,000.

And on the rental market?

This flat, once renovated, could rent for £1,100 per calendar month.

Yes, the flat is in a busy location and you can't escape

the smell of damp inside, but it is a really good-sized flat.

I just hope whoever bought it had their investigation

skills at the ready to find out about the service charge

and the future building works here.

Let's find out if we have a Sherlock Holmes -

under the hammer - in the making when we went to auction.

Lot 99 is offered with vacant possession.

Who wants to get me started on this?

130 anywhere?

130 I've got.

131 anywhere?

131. 132?

132. 133.

134. 135.

136. 137.

Well, so much for that 100 grand guide price

because we rejoin the bidding at 147,000.

147.

148.

150, knows the value. 151.

It is with you, sir, the bid is £150,000.

It is against the gentleman here, on my left. 150 for the first.

150 for the second.

150 for the third and final time. Are we all done?

Sold, 150. Well bought.

And with the successful bid of £150,000 was Sat.

Sat is no stranger to the auction house,

having become a property developer in 2010.

He always buys at auction for himself as well as investors.

So I met him back at the flat to hear what

he had planned for the place.

# Oh, now tell me, where can you party, child, all night long?

# In the basement

# Down in the basement... #

-Sat, congratulations.

-Thank you very much.

-Well done.

-You got the property you wanted at auction.

-Mm-hm.

-You are not an auction virgin, are you?

-No. I've done it since 2010.

I finished university in 2009.

It wasn't the best time to graduate in terms of the economy,

so, yeah, my father was in property, my grandfather was in it.

I bought my first one, my grandfather helped me

out a little bit, and went from there, really.

Well, it sounds like Sat knows what he is doing here.

He currently has ten properties in his portfolio

and often works with investors on properties for resale.

Now, I wonder why he chose this one.

This area is quite familiar to me.

I wasn't born too far away, in Blackheath.

-And my grandma used to work in the Post Office in Charlton.

-Did she?

Yeah, she did. Yeah.

So quite familiar with the area and, you know,

I grew up around here, so it means a lot to me.

And it has changed a lot as well.

So, yeah, it's been a bit of a surprise

how it's turned out, really.

How lovely for Sat to be investing in an area with such fond memories

for him. And I'm sure it has changed a lot

since his grandmother worked in the Post Office.

But I am betting this is not a purchase based

on sentiment for the good ole days.

# Glory days, glory days. #

So, how much research did you do?

I did the usual amount - looked through the legal pack.

I did view it, just about.

The gentleman was just leaving the property,

he was showing it round, and he said, "You have 30 seconds."

So I literally was in and out of here in 30 seconds.

-Was he just locking up?

-Yeah, he was just locking up.

My car was on the yellow line, I was like, "Uh..."

But quickly ran out, got it done. So I did see it, just about.

As you entered the property for the first time,

did you get that...smell?

It the damp smell that hits you as soon as you walk through the door.

-Yeah, sure.

-Now, it is a basement flat.

It has always been a big problem,

always will be a problem with property.

Are you worried about it?

I'm not too worried about it.

I mean, sometimes it is hard to

distinguish between condensation and damp, but I'll get

a specialist in to, you know, have a look and give their opinion on it.

But, yeah, like you said, it seems to be a current trend with

basement flats, so that will be my priority.

Mm, very wise.

Getting that damp fixed would be my number one priority as well.

Now, I know in the legal pack, there wasn't any information

on the service charge and any future building works taking place.

Are you concerned about that? And what do you know?

The heart is secretly racing on that one.

I think when we hear back from the freeholder, I think

my heart will definitely be

beating out of my chest because I've been hit with it before.

-So I am very concerned about it.

-What happened in the past?

In the past, I got a nice big bill

for £25,000

on a flat.

-So, yeah, it wasn't...

-So you haven't learned by your mistakes!

No, I haven't, but I have factored it in, in the price,

so I said, "That's the worst I've ever dealt with,

"so hopefully it won't go past that figure."

Anything less than £25,000 is a bonus for Sat.

That's good to know.

So let's find out what renovations he's got planned for the place.

It doesn't need anything too dramatic done,

but I think I would still give it a repaint,

put new carpets in and just making it look prim and proper, really.

As well as the renovations inside, Sat plans to tidy up

the front courtyard and the communal gardens at the back,

and all within six to eight weeks.

So, let's talk budget.

I think my budget is probably going to be about £8,000.

That is relatively low.

Yeah, it is relatively low,

but I think the amount of work that is needed, I'm pretty comfortable

in my past experience that it can be achieved in that price.

Well, I'm really excited to see the outcome.

-Well done, Sat, congratulations.

-Likewise. Thank you.

-Thank you.

On face value, this seems like a straightforward

project for experienced developer Sat,

but even he admits he is a bit worried about the lack

of information with the service charge and the building works.

I just hope he gets to the bottom of those extra costs

and they don't prove too expensive for him.

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

So, we've seen how our first buyer got on,

-but what about the others?

-Did everything go to plan?

Let's find out.

We are back in Stoke-on-Trent in the area of Hanley to see what

happened to that two-bed mid-terrace which was guided at £32,000.

The house was in pretty good condition.

And the more I saw, the more I liked it.

No signs of damp as yet.

More double glazing, which is great.

Let's have a look upstairs. I hope it doesn't let me down.

The two bedrooms were in need of redecoration

and a little bit of re-wiring.

But it was downstairs in the kitchen where I started to have my worries.

That I don't like, here.

Unfortunately, there is a bit of damp just there.

Top of the piping, you have got a bit of staining around

the pipework and on the ceiling and a little bit down the walls as well.

It doesn't seem to be too bad.

That is the only problem I can see with this property.

Putting a patch of damp to one side, I thought

this would be a simple job for someone.

And that someone was Des, a full-time lorry driver

and second-time-around developer.

And when Des told me his work schedule, I was gobsmacked.

-So at the weekends - Saturday, Sunday - you'll be here?

-Yeah.

-And Monday to Friday, you're working.

-Working, yeah.

-You'll be shattered.

-Yeah. I've done harder work.

OK, so Des was clearly not afraid of grafting.

But remember, this house cost him

more than he wanted to spend in the first place.

He paid £42,500 for this house and had a modest budget

of £2,500 to £3,000 for the renovations.

He thought he could turn this house around in six to eight weeks.

We've come back ten weeks later to see

if the part-time developer has a full-time hit on his hands.

# It ain't what you do It's the way that you do it

# It ain't what you do It's the way that you do it

# It ain't what you do It's the way that you do it

# That's what gets results. #

Des has transformed this dark front room,

making it bright and welcoming.

The old vinyl floor tiles are a thing of the past

and have been replaced throughout the ground floor with

contemporary wooden flooring that is hard-wearing and practical.

He has smoothed, skimmed and painted his way throughout

the whole of the house, just like he said he would.

Once I'd painted, it didn't come out 100%.

So, up till last night, I had to repaint it again.

But it's...it's drying out slowly.

So it's getting there.

I like his attention to detail here.

He is not willing to accept a sloppy job, especially if it is his own.

Also, on the ground floor,

there was that kitchen with that worrying damp patch.

I had a slight leak in the roof in the kitchen,

which was above the boiler.

There was a problem with some loose tiles on the extension.

I had to get a roofer to do that. And that was it, quite simple.

# It ain't what you do It's the way that you do it

# And that's what gets results. #

It's simple if you get the right people to do the work,

but with a small budget of just 2.5 to three grand,

Des had to keep the cost down,

only replacing what was absolutely necessary.

After giving the old kitchen a good clean, I decided, no,

it needed replacing, so rip it all out.

Then I decided to start on the floor.

The floor was a bit of a major problem cos it had vinyl tiles.

The vinyl tiles needed taking up with a pneumatic drill.

That is how hard down they were.

# Swing my hammer strong at night... #

The bathroom was a little bit easier.

The units inside it were quite good. It needed just a good clean.

I replaced the taps. I fitted a shower as well.

And new tiling and that was it.

# I'm just a hard workin' driver man. #

I'm really impressed how Des has reused what

he could to keep the costs down but keep the quality up.

He's been working hard, but has he been working smart?

Well, the biggest challenge, I think, is I should have

subcontracted out most of the work, considering the painting.

I thought painting was simple,

but it does take an awful lot of time to have it done properly.

So that is what I should have subcontracted out.

Well, there is always something to learn on every development, Des.

# Second time. #

And this is only your second property refurbishment.

Upstairs, the two bedrooms have been given a fresh look

with new carpets and plain walls.

Des spent a little longer than his original eight weeks,

taking ten in total.

So how did his three grand budget work out?

I ended up spending 3,200 in total.

The main reason for going slightly over budget was getting

the roof repaired and the boiler repaired,

but these were jobs which I just had to do.

Des bought the house for 42.5 grand and spent 3,200

on refurbishment, bringing his total investment to £45,700.

It's time to find out what two local property agents

think of the house.

This is my first time inside the property

I am particularly impressed with the level of finish, especially

in the kitchen and the bathroom.

The main selling points for this property is that it is close

to the city centre and, of course, the road links that that provides.

There is not anything different to the property, it is

just a basic refurbishment, which is all that is needed around the area.

The area is on the up as well,

so hopefully it'll get better over time.

So, what do the agents think the property could sell or rent for?

If this property was going to the market for sale,

I'd expected to achieve around £50,000.

And if it was going to go onto the rental market,

I would expect it to achieve around £375 per calendar month.

For the sale market, I think

this property will achieve a figure in the region of £55,000.

For the rental market, a figure around £395 per calendar month.

Although Des was planning on renting the house out,

those sales figures would give him a profit of in between just

under £5,000 and £10,000 before taxes and expenses.

But closer to his heart are those rental yields,

which would give Des a very healthy return of between 9% and 10%.

The rental figures I've had quoted have been very similar,

by two different agents,

and I'm happier with the second figure rather than the first,

obviously.

This is Des' second development,

the last one being ten years ago. So what is next?

At the moment, I'm not too sure.

I'm going to lease this one out first of all.

And then from there, I'll calculate some figures

and consider doing this again.

But at the moment, I would like a little bit of a holiday.

# London boy! #

Well, it is time to go back to Charlton, in London,

and a basement flat I saw there guided at what seemed like,

in London terms, a really reasonable 100,000.

It, however, had a few extras it could well do without.

First thing that really hits me, and I know it is a basement flat

and it is so notoriously famous for it, is the damp!

But you can really smell it.

It is very pungent indeed, which is a bit of a worry.

# Lord, I smell trouble up ahead of me. #

But there were upsides to the less-than-fragrant basement.

It was a really spacious flat.

There was a super kitchen, which really needed very little work,

and a decent bathroom with a shower and a bath in there,

plus a separate loo.

There was not one but two decent sized, bright bedrooms.

The living room is at the front of the house,

with not much of a view, but again, plenty of light.

And things got even better around the back. Well, sort of.

This is a big space.

But just look at it.

Whoever takes this on needs to get a skip.

Now, I don't know where they're going to put the skip,

but look at all this!

A big clean-up needs to take place.

But it could look absolutely fantastic.

The flat was bought by Sat,

a local lad who comes from a property developing family.

He thought he sniffed out a bargain here.

And with over ten properties under his belt, that eau de damp

that permeated the flat, well, it held no fears for him.

I'm not too worried about it.

I mean, sometimes it is hard to distinguish

between condensation and damp.

But I'll get a specialist in to, you know, have a look

and give their opinion on it.

But, yeah, like you said, it seems to be a current trend with

basement flats, so that will be my priority.

The legal pack didn't state whether there was a service charge or

if there was any future building work planned on the property,

so this had Sat feeling a little bit nervous.

The heart is secretly racing on that one because I've been hit

with it before, so I am very concerned about it.

In the past, I got a nice big bill for £25,000

on a flat. So, yeah.

So you haven't learned by your mistakes!

No, I haven't, but I have factored it in, in the price.

Oh, well, that's all right, then. Maybe!

Sat bought the flat for 150,000 and had a budget of £8,000

and six to eight weeks.

Now, we have come back 11 weeks later to find out how he got on.

# I'm a wonderful thing, baby

# Wonderful

# I'm a wonderful thing, baby... #

Well, you've just got to take my word for it,

this flat now smells as good as it looks.

Sat has neither scrimped nor scraped to turn this smelly, old

basement into a clean, fresh haven.

He's done all the work that was essential and then he has had

a whole lot of fun with making the kitchen and bathroom just wonderful.

# Wonderful! #

Of course, the finish on the property.

We decided to go for a quite high spec finish.

Especially with the area, up-and-coming with the Crossrail.

I think we are trying to get a little bit ahead of the times

by just modernising it, because we feel that the area is going to be

quite cosmopolitan at a later stage.

Some of the tricks of the trade there from Sat.

He has prepared the flat for the new opportunities that better

transport will bring.

But I want to know

if it was the sweet smell of success with the smelly, old damp problem.

There had to be something that dampened my mood, pardon the pun.

The damp was a bit of an issue, so I did get someone to check it out.

They said it wasn't that bad.

And then once I did the whole property in the flat, I did notice

a few areas, so I thought, "Hang on, let me call a specialist in."

They then said there is damp, so I had to redo it again afterwards.

So I think that is a lesson learned.

And that lesson is that rising damp needs a specialist to fix it.

But Sat was a lot more fortunate with the service charges and

possible future building works which had caused him sleepless nights.

There was no future building works planned

and the service charges are a very reasonable 500 quid a year,

a saving in the short term.

But there is no doubt that money spent on renovating

the building would in turn increase the value of the flat.

So has the flat come up smelling of roses for Sat?

I'm really happy with it.

From start to finish, before and after, there is a really,

really big difference.

And considering the building, I think this really,

really stands out as a really, really good modern flat.

So I'm really happy we've put a bit of CPR on it

and brought it back to life.

# I can feel the love Can you feel it too?

# I can feel it, ah-ah... #

Outside, Sat wasn't able to do much about the whole building,

but he made the view from the living room so much better.

He got his team to clear out the shed, rear yard,

so it no longer looked like a rubbish tip.

Sat bought the flat for 150,000 and spent £8,800 on

the renovations, bringing his total spend to just under 159,000.

It's time to find out

if our two property experts think Sat has a nose for a bargain.

I think the property has been done

nicely to a nice, modern standard.

It's light, it's bright.

And despite the fact that it is a basement,

it feels airy.

Everything is done, so it is just a walk-into property.

The property itself has good rooms, good-sized, spacious rooms,

a nice kitchen, nice bathroom and a separate toilet,

so it has got a lot of selling points to the property.

So, what sales and rental values

do the agents think the property could achieve?

On the resale market,

we would sell this property at £270,000.

And on the rental market,

we would rent it at £1,250 per calendar month.

I think this property is worth £270,000 on the resale market

and £1,200 per calendar month on the rental market.

Wow! Based on these figures,

that means Sat could make a potential profit of just

over £111,000 before taxes and expenses if he sold the flat

and around a 9% yield if he rented it out.

Well, with them figures,

I think I will be very happy to sell at the moment.

And that was our intention from the beginning.

The rental idea was only just as a precaution

if we couldn't sell the flat.

With this South London property a resounding success,

is Sat tempted to head off to pastures new?

I really enjoy South East London. It is...

Like I said, it is an up-and-coming area

and I was born not too far away from here,

so my roots are here and, yeah,

it has always been a lucky area for me. So, yeah, if a deal

comes in this area, I'll be more than happy to take it on board.

We'll be back next time with more auction properties

and the stories behind them.

Yeah, we'll see you then for more Homes Under The Hammer.

-Goodbye.

-Goodbye.

-Goodbye.