Episode 74 Homes Under the Hammer

Hello, and welcome to the show.

If you're looking at investing in property,

then making sure you know what's happening

in the local property market is a great way to start.

And also doing detailed research

really helps you stay ahead of the game.

And once you've done that,

why not head down to your local property auction

to see what's on offer?

Well, buying property under the hammer

can be a great way to get good value for money.

Yeah, and it can be a gamble as well

cos most of the lots on offer will need renovation work.

So, let's see who wanted to get stuck in on today's programme.

In Worthing, the sea isn't the only place to get your feet wet.

When we came to see it,

you had to walk through a puddle in that top landing.

But if you fancy dipping your toes into the property world,

this two-bed flat could be right up your street.

This is the perfect investment property.

It may be straightforward in Telford,

but it's perplexing in South Wales.

You've got this sliding door between this bedroom and this bedroom.

All these properties have been sold at auction.

We'll find out who bought them and what they paid for them

when they went under the hammer.

-GAVEL BANGS

-Your lot, sir. Well done.

The West Sussex town of Worthing

sits ten miles to the west of Brighton,

and it's perhaps a bit more sedate than its near neighbour.

Oscar Wilde penned The Importance Of Being Earnest

while staying here in the summer of 1894,

and even named the main character, Jack Worthing,

in honour of the town.

For many centuries, Worthing was just a small fishing hamlet,

but in the late 18th century,

it developed into an elegant seaside resort

for those that wanted to indulge in a bit of sea bathing

and to promenade along the seafront.

It's a bit chilly today for a dip in the ocean.

I think I'll go and look at some property instead.

The property I'm here to see is this two-storey terraced house,

which sits a few hundred yards from the seafront.

It went to auction with a guide price of 220,000 to 250,000.

Now, this is a great house with wonderful proportions.

You've got lovely ceiling height, a fantastic, welcoming hallway.

I really like it.

Surprisingly, this house has been set up as an HMO -

a House of Multiple Occupancy -

so these two wonderful reception rooms here

were probably bedrooms.

But, of course, you could switch it back

and have this as an amazing family house.

I mean, there's so much character within. I love it.

Right at the back here, we've got the kitchen/dining area.

This was probably the living room

for the people that lived here before as an HMO.

The good news is, though, right at the back,

you've got a downstairs shower room and a loo.

-# They call me mellow yellow

-# Quite rightly

# So mellow He's so mellow... #

Not everyone is mellow with yellow, but that's easily fixed.

And look at these unexpected gems -

units that are in decent condition...

..a nice Belfast sink, light-reflective worktops.

Now, a lick of paint and a tidy up,

well, this kitchen could go from mellow yellow to solid gold.

-# Gold!

-Gold!

-#

Beyond the kitchen lies the shower room,

which is always handy, either for an HMO or a family home.

But the back garden has definitely been tailored to suit the former.

Well, I think you'll agree this is disappointing.

It's, um...it's small, it's like a yard.

If you did want to turn it back from an HMO into a family home,

I see this as a definite disadvantage,

although you do have the beach just a few hundred yards away

as your playground.

And, boy, on a sunny day, it really is a beautiful beach.

Just as well.

Clearly, this has been a low-maintenance solution

for a rental property. And talking of maintenance,

there's certainly a lot to do out here.

It's a cheerier prospect upstairs

where we find four bedrooms and a family bathroom.

Now, the master bedroom is particularly impressive.

I think the estate agents might call this generous accommodation,

but unfortunately, it looks like the roof might not

be keeping all the rain out,

and patches of mould suggest that damp could be an issue.

Making the house watertight should be the new buyer's top priority

before starting the refurbishment.

But refurbished as what? An HMO or a spacious family home?

Let's call in a local property expert

to hear the pros and the cons of each option.

It has plenty of potential either as an HMO or as a family home.

As a family home, the property needs renovating throughout.

I'd incorporate potentially an en-suite bathroom

into the main bedroom

and remove some of the outbuildings outside

to create a greater garden space.

As an HMO, the refurbishment would be to a more basic standard.

A number of houses in the road

have been turned from HMOs into family houses.

However, an HMO would be a better investment.

So, if the new buyer was to keep this

as a six-roomed house of multiple occupancy,

how much rental could they expect to earn?

As an HMO, each room could be let for £375 per calendar month,

which would equate to £2,250 per calendar month in total.

And how does that figure compare to renting as a single family dwelling?

As a four-bed family home,

the property could achieve around £1,250 per calendar month.

There's quite a difference,

and from an investment point of view,

keeping this house as an HMO makes obvious business sense.

How do the resale figures compare?

As a family home finished to a high standard throughout,

the property could achieve approximately £325,000.

If the property was to be sold as an HMO,

it could achieve between £320,000 and £350,000.

So, will this house stay as an HMO - House of Multiple Occupancy -

or will it become a family home?

That decision is down to whoever bought it on auction day,

so let's find out who bid for it.

So, we move to Worthing now. It's lot 167.

It's a very old mid-terrace. Lots of accommodation.

Start me at 180,000.

180,000. I've started too low. There's two of you. 180, I have.

185. 85? Make it 90.

-90. 95.

-Even though the auctioneer

started the bidding well below the guide price,

the bidding climbs slowly but steadily

in increments of five grand.

205 anywhere else?

Your bid. 205. 210, either of you?

210. 215. 220.

I'll come back to you. 220. 225.

230.

The gentleman's bid sitting down on my right.

225,000. It's against two of you now.

230 anywhere else?

Are you sure? OK.

First time at 225. Second time at 225.

For a third and final time at 225,000

back of the room sitting down. Are we all done?

-GAVEL BANGS

-Sold at 225,000.

Bidding from the back of the room were Gaynor and Brian,

a married couple from nearby Hove.

# We dream the same dream We want the same thing

# Oh-oh! #

I caught up with them back at the house

to hear if they're both dreaming the same dream for this property.

-Gaynor and Brian, congratulations. I love this house.

-Thank you.

-What a great location.

-Yeah.

-Yeah, it's really good.

So, how well do you guys know Worthing?

Well, we renovated our house two years ago,

-and while that was going on, we bought a house in Worthing...

-Ah.

..and lived there for six months and we loved it.

Why have you bought this at auction? What's the story, Gaynor?

Well, having lived here for six months,

we knew that it was a great market and it's close to the sea,

it's got lots going on, and we just fancied doing another project.

Is this what you guys do -

kind of buy house, do it up, sell it on, find another house?

We'd like to. This is just the second one we've done,

so we'll see how this one goes

cos there's quite a lot of work here, as you can see.

What are you going to do?

Where are you going to start with this project?

-In the roof.

-The roof.

-Ah!

-GAYNOR LAUGHS

Right, who wants to tell me what happened to the roof?

-OK, there's two leaks in the roof.

-Ah.

And they look like they've been there for a long time,

and one of the rafters has rotted and needs replacing.

You always have to wonder why a property went to auction

-in the first place, so that is probably the reason why.

-Could be.

When we came to see it, you had to walk through a puddle

-in that top landing...

-Oh, yeah.

-..so we knew there was a problem.

The big question I need to ask you is, it was currently laid out

as an HMO - a House of Multiple Occupancy -

what are you going to do with it?

Will you keep it that way or change it back into a family house?

We're going to turn it into a family house.

I think, you know, that's what it really lends itself to.

-Absolutely.

-It cries out for that.

-I think it'll be fabulous when we've done it.

-Yeah.

-Yeah.

Oh, I'm so pleased that Gaynor and Brian are planning

to make this a family home once again.

They've successfully renovated another house,

but what skills are they bringing to this project?

I was in IT - I was an IT contractor -

but when we renovated our house,

I trained to be an electrician as well.

I'm Part P qualified

and so that really helps on this sort of thing.

-Big tick. Great news.

-Yeah, yeah.

-So, then what?

So, the roof, the electrics and then...?

We need to renovate the kitchen. We need to do something with that.

I'm hoping that we can get away with using the units that we've got

and paint them up.

That's what I like doing -

making something out of something that's already there. Recycling.

I've always bought sort of interesting properties

and worked on them and made them better or more different.

I've done kitchens like this and painted them

and covered them in wrapping paper and varnished them.

You know, just weird and slightly unusual stuff.

Hang on a minute. Wrapping them up in wrapping paper?

No, I got wrapping paper,

cut it out to cover the little, you know, indents

-and varnished over it, and it looked great.

-Wow.

And then distressed the rest of the unit.

Are we going to be seeing anything like that here? Who knows?

-Oh, really? Watch this space.

-Watch this space, yeah.

I think I'll just be painting these, but who knows?

-You've got to think about who you're going to be selling it to.

-Exactly.

That was a project a long time ago and I had to live with it.

LUCY LAUGHS So, yeah.

So, how long do you guys intend on working on this as a project?

I mean, how long is it going to take you?

-Good question.

-Good question.

-I don't know.

-It depends how much we want to do, doesn't it, really?

-Yeah.

-I'd say, you know...

-Six months max, I think.

Our last project, which was a house much bigger than this, actually,

-and that took ten months, didn't it?

-Yeah.

And, yeah, then we'll remarket it and sell it on.

But before they can sell, they have to do all the hard work.

Brian is planning to do as much as he can,

and Gaynor will bring in specialist contractors where needed.

But how much do they think this will all cost?

We've put a budget down of between 30,000 and 50,000,

so it just depends whether there's nasties in there or not.

20 grand contingency.

-Is that just in case the roof plays up?

-Yeah, yeah.

And it depends also on what we need to do to get it to market, really.

How much we need to spend. Do we need to put in new radiators?

Do we need to take any of these floors up and replace them?

-We'll see as we're doing it, I think.

-It's all about the budget.

-All about the budget.

-All about the budget.

-It'll be interesting to see how much you do end up spending.

-It will.

-THEY CHUCKLE

-Are you worried about the roof?

-Not really...not... I'm not...

-You are a little bit. You are.

-Look at his face.

-It's worse than I thought it was going to be.

He worries about everything,

so if he wasn't worried, he'd be lying.

-So, as a combo, as a property developing couple...

-Yeah.

..are you the worrier and you're the doer and the practical person?

-Yeah.

-No, I'm the practical person. Gaynor finds the property.

She does all the research. She's brilliant at that, so...

-And then you just get on and do it and worry about it?

-That's it.

-I do all the worrying.

-He's the doer, I'm the manager.

-Really?

-But, you know, what's new there?

-And it works, though, doesn't it?

-It does work, yeah.

-Does it?

-Yes.

-He's going to kill you after this.

-SHE LAUGHS

Guys, I'm so excited to see the outcome

-and to see how it turns out for you. Congratulations.

-Thanks very much.

-Lovely to meet you. Thank you.

-Thank you.

-Good luck.

So, no more HMO, no more multiple tenants.

Gaynor and Brian are going to make this into a lovely family home,

but they've got the roof to fix and lots of other work to do,

including that kitchen to paint,

or maybe covering it in wrapping paper. Really?

We'll find out how they get on later on in the programme.

Telford in Shropshire is about 30 miles from Birmingham,

and it's a town that's going places.

Last year, a major redevelopment programme was completed,

bringing in new cinemas and shops to the town centre,

and the town is attracting new technology companies

to the area too.

# Because you're gorgeous

# I'd do anything for you... #

I hope the property I'm going to see

is as gorgeous as this award-winning building.

The property I'm here to see is just a short walk away

from Telford town centre. And there it is just there.

It's a ground-floor flat, two bedrooms,

and has a guide price of £55,000 plus.

Let's get in and take a look.

These 1980s flats were owned by the local authority.

They sit in well-maintained gardens, are quiet yet extremely central -

perfect for young professionals who want to walk or cycle to work.

OK, we're into a decent hallway space,

and a bit of deja vu.

I've actually been in a property like this recently

that had a void there.

What have we got in here? We've got cupboard space in there,

and even more cupboard space in there.

Quite a big cupboard, that one.

I always want to try and create as much space as you possibly can.

I'm hoping this is the bedroom.

So, why couldn't you...? Let me just investigate.

And, yes, it's pretty much identical to the flat I was in before,

and all I wanted to do is just shift this wall and bring it here,

get a bit more bedroom space, but I was not allowed to do it,

as it stated in the legal pack

that you could not change the configuration of this flat.

# Happening all over again

# Happening all over again... #

The upside of not being allowed to change the layout

is that you won't be spending your money

knocking down and rebuilding walls.

This is not a huge flat,

but it's well-designed and has good storage,

which is handy because both bedrooms are on the small to medium side,

and because the lease restrictions

might not allow you to make them any bigger.

The sitting room, however, is very spacious,

and once that Union Jack colour scheme has gone,

it will be a bright room, considering it's a ground floor.

I can't see this being

a particularly expensive flat to renovate,

but it depends on how much you want to splash out on doing the bathroom.

You need a whole new suite in here.

All seems pretty cosmetic at the moment from what I can see,

and there's no change in here.

All just looks a little bit tired. Could do with a lick of paint.

Could do with some carpet, some new flooring in here,

and a brand-new kitchen as well, but nothing major.

But the plus points are the location. It's perfect.

The town is just a short walk away in that direction,

so if you haven't got a car, it's not a problem.

There's loads of new businesses moving into the town centre.

That's bringing in young professionals.

So, for me, this is the perfect investment property.

# This is a perfect world

# I'm riding on an incline

# I'm staring in your face

# You'll photograph mine... #

It's time to find out if our local property expert could find

any flaws in this potential little gem, guided at £55,000.

First impressions are that it's a good size.

It's ground floor as well.

Some people might view that as a negative,

but I always view it as a positive cos maybe,

if you've got an elderly person who wants to live here,

it's absolutely perfect for them.

It maybe needs a little TLC, it's a bit rough around the edges,

but I don't think it's anything scary at all.

To anyone knowing what's involved in these places,

is quite easy stuff to do, to be honest.

Well, this is sounding better and better,

with either young professionals or older people as potential residents.

What does he think the local property market will make of it

once it's been refurbished?

Once renovated, the property should sell for about £70,000.

Rental potential - £525 per calendar month.

This is an ex-local authority flat.

Now, if you're a regular viewer to the show, you know we like those,

but this one in particular needs a lot of work doing to it.

Now, I would want to spend a few quid on this,

get it looking spick and span,

but who was the last person standing when it went under the hammer?

Lot 46. Ground floor apartment.

50,000? Thanks, sir. £50,000.

52. 52. 54?

54. 56. 58?

58. I'll take one if it helps.

In the middle, 59.

60. 61.

62. 63 anywhere else?

If not, £62,000 once.

£62,000 twice.

Third and final time at £62,000.

-GAVEL BANGS

-Your lot, sir. Well done.

The successful bidder of £62,000 was made by Kumar.

Kumar has brought along his children Krish and Anoushka

to see his latest purchase, but they're going to amuse themselves

while I catch up with him and his builder Amrit.

-Amrit, nice to meet you.

-Same to you.

-Kumar, same to you, sir. Congratulations.

-Thank you.

Why this flat in particular?

Well, Telford has recently gone through a lot of regeneration,

-millions of pounds have been pumped into the town centre area.

-Yeah.

This has created quite a few jobs.

The demand for rental properties is quite high.

So, it's nearly 100, 150 metres from the town centre.

Just walk to work, and you're there at your workplace, really.

That's the reason why I bought this.

What was it that got you into property in the first place?

Well, I started buying properties about ten years ago,

and the yield in this area was unbelievable.

But that went really well.

Then the next one and the one after that

and the one after that and it's just...

Every time, I think, "It's the last property,"

but it never ends. It just carries on and on.

It's been ten years I've been doing that.

You find yourself back at the auction house all the time?

Yeah, this is the third property at auction.

The first one I bought is, like, last year.

Nearly 12 months ago.

But before, I always used to buy through estate agents,

but I thought, "I'll get my hands dirty in auction houses

"at least for one."

# Get your hands dirty for me... #

So, Kumar is cleaning up at auction now.

# Get your hands dirty... #

I was keen to find out what renovations he had planned

for this latest addition to his empire.

-So, what work needs to be done here?

-The bathroom needs to go.

So, new units in the bathroom.

-Boiler - Amrit said the boiler's all right.

-OK.

After servicing and the Landlords Gas Safety Check,

it should be absolutely fine.

The property - all the walls need new paint.

There are some gaps and stuff. We won't do plastering.

We'll fill the holes and stuff and do a brand-new fresh paint.

-So, you're not re-plastering?

-No, not re-plastering.

-OK. OK.

It just keeps the cost down.

The walls are absolutely fine after the filling.

-The new paint needs to go. New flooring.

-Mm-hm.

So, some of the rooms will have carpeting,

some of the rooms will have flooring.

So, the bathroom and kitchen will have wooden flooring or linoleum.

Depends what the flooring chap says.

-Kitchen units will stay.

-OK.

We might put new handles on the doors of the kitchen

and new worktops.

-Are you going to be doing all the work, Amrit?

-Most of it.

-Yeah?

-Yeah.

-How long will it take you to turn a flat like this round?

What, two to three weeks.

-Really? On your own?

-I've got some help.

-Oh, I see. You've got some help.

-Yeah.

-What about the boss?

-Is he going to help you?

-He might help me, yeah.

-HE LAUGHS

-After I've finished my day job,

yes, definitely.

So, how did your relationship come about, Amrit?

I started doing some jobs for him. After that, we became good friends.

-And he won't let you go?

-No.

-HE LAUGHS

Do you know what? Yeah, that's how it started.

And Amrit is a nice guy, so, you know,

-it's good to have nice guys as your friends, isn't it?

-It is.

And if they can do a bit of work for you,

then you can trust them to do the work, leave them to do it,

-which is what you were looking for, obviously.

-Exactly.

# Hello, buddy

I didn't think you'd turn a blind

# Eye... #

So, Kumar's builder is his best buddy too.

That sounds like a partnership made in heaven.

Since Amrit is also a qualified gas fitter and electrician,

it helps to keep the budget in line too.

We've budgeted 3,000 for it.

Most likely, we'll come under the budget,

but I've put £500, £600 extra just in case it will...

Always the case, you know,

the money's tight towards the end of the project.

So, Amrit, what's going to be the hardest job, the biggest challenge?

There's nothing hard if you want to do this.

-DION LAUGHS

-I think it's just the bathroom.

-All the rest is easy.

-See, that's what you need.

When you've got a builder who says, "It's all easy," it's perfect.

That's what he said when I bought it.

"Everything's easy. Go for it."

# Hello, buddy... #

Is Amrit dream builder or what?

I'm almost feeling a bromance coming on.

Kumar is an admin man,

but has he followed the Homes Under The Hammer rules?

-Did you read the legal pack?

-No, I didn't read the legal pack...

-Ah!

..and I didn't view the property.

Two! Two of our rules.

I thought, "It's a leasehold apartment.

"There shouldn't be any structural problem."

-Based on my previous experience with other auction properties...

-OK.

..they always do brand-new, fresh leases of 99 years,

so I was hoping that it was actually going to do the same thing.

So, you never read the legal pack before, but have you read it now?

The solicitor has,

-and there were a few areas which he made me aware about.

-OK.

Especially the cost and charges in the next five years,

which will be spent on the block,

-which is roughly about £4,000 to £5,000.

-OK.

It wasn't a big surprise. It was a surprise, but it wasn't big

because other properties have very similar expenses,

which I have in other blocks.

Yes, it would have helped if I read the legal pack before.

-Listen, Amrit, I wish you all the best with the work.

-Thank you.

-Hope it goes well. Kumar, good luck with your investment.

-Thank you.

-Good luck, guys. Wish you all the best.

-Much appreciated.

I do like that partnership

because they both bring something different to the table.

Amrit's got to do all the work,

and Kumar's going to help when he can.

But they didn't read the legal pack,

and they may end up spending just that little bit more money

than they wanted to. So, read the legal pack.

Anyway, you can find out how they get on later in the programme.

Still to come, the buyer of this three-bed semi

is a builder by day, but also has an interesting sideline.

I do a bit of farming.

I do it before I go to work and I do it when I finish work.

And back in Telford, Kumar has learned a valuable lesson.

Always see the property, view it before you actually bid for it.

But first, we return to the bracing sea air of Worthing

on England's South Coast

where, earlier, I wandered around this roomy terraced house

not far from the seafront.

With a guide price at auction of 220,000 to 250,000,

it was sold as an HMO or House of Multiple Occupancy.

But four bedrooms and two reception rooms

plus this open-plan kitchen/diner was crying out

for someone to turn it into a really great family home.

And with a bid of £225,000,

the new owners were husband and wife property-developing team

Brian and Gaynor.

What are you going to do with it?

Will you keep it that way or change it back into a family house?

We're going to turn it into a family house.

I think, you know, that's what it really lends itself to.

Originally an IT specialist, Brian retrained as an electrician

when the couple renovated their previous house,

so he would be dealing with most of the technical work

while Gaynor would act as project manager,

although she did offer up some quite novel ideas

on the decorating front.

We need to renovate the kitchen. We need to do something with that.

I've done kitchens like this and painted them

and covered them in wrapping paper and varnished them.

-Will we see anything like that here?

-Who knows?

-Oh, really?

-SHE LAUGHS

-Watch this space.

-Watch this space.

But this project wouldn't all be fun and games.

It was going to take a lot of hard work

to knock this house back into shape.

And the state of the roof certainly put a frown on Brian's brow.

Are you worried about the roof?

It's worse than I thought it was going to be.

He worries about everything. If he wasn't worried, he'd be lying.

Giving themselves six months and a maximum budget of £50,000,

Gaynor and Brian set out to transform this tired,

run down and leaky HMO

into a warm and welcoming family home.

We've come back eight months later to see the results.

Gaynor and Brian appear to have finished this project beautifully,

and in the kitchen, not a sheet of wrapping paper in sight.

My great idea of we were just going to tart up the kitchen

was to paint it.

And, on a previous kitchen, I had used wrapping paper.

They looked very nice, I've got to say.

Not everybody agreed with me, but as it turned out,

we ended up putting in a whole new kitchen,

so the wrapping paper's still in the cupboard

ready to be used for another day. SHE LAUGHS

Bringing natural light into the new kitchen

meant losing the shower room, the back extension

and the lean-to at the side of the house,

making way instead for French doors

which lead out into a newly turfed and decked back garden.

To finish off this kitchen/diner, a small loo had been added.

Upstairs, the family bathroom has had a complete makeover,

but the biggest change is in the master bedroom

where Brian has added an en-suite.

We thought, with a house with four bedrooms,

you know, it would really benefit from having an en-suite

in one of the rooms.

This has been a thorough renovation.

The roof has been fixed and the whole house re-plastered.

Brian has fitted a new consumer unit

and replaced various electrical circuits.

A completely new boiler and central heating system has been installed,

and this has led to an unexpected but very welcome discovery.

We decided to put in a new boiler,

and with that, it also meant taking up all the floors.

-But what we found were beautiful pine floors...

-Yeah.

..underneath the laminate flooring, so it was a...

It worked out really well in the end.

Uncovering those floorboards was a wonderful stroke of good fortune.

Original features just make such a difference

to period properties like this one, and in my opinion,

make this a really desirable family home.

Brian and Gaynor have taken eight months to complete,

but I'll forgive them for the two months overrun

because I think they really have done such a fantastic job.

But did they stick to their budget?

We've spent just about £55,000,

which is 5,000 over the top of the budget

that we had allocated to this project, which was 50.

I should think a small celebration might be in the offing.

This project has all the makings of a potential success story.

But before Gaynor and Brian crack open the bubbly,

let's get the opinions of two local property experts,

starting with the agent who first viewed the house.

The layout of the property is fantastic,

and it really suits the family market.

The large kitchen/breakfast room gives space for a dining table,

and the ground-floor cloakroom is a real benefit as well.

The addition of the en-suite to the master bedroom is perfect.

Location, location, location - the selling point for me.

It's yards from the beach. You've got town centre shopping,

restaurants, main line station

and good quality family accommodation.

Well, let's get some values now.

Remember that Brian and Gaynor purchased this property for 225,000,

and have spent 55 grand on its renovation,

bringing the total cost to 280,000.

A property like this for the resale market

should achieve around £400,000 to £420,000.

And for rental purposes, a town centre property like this

should achieve around £1,800 per calendar month.

The retail value of the property is in the region of £405,000,

and the rental value will be in the region of £1,600 per calendar month.

Those rental figures could mean a potential yield of nearly 8%.

However, the couple always planned to resell,

so what do they make of those valuations?

We've already had an offer that we've accepted for £406,000,

so we're very happy with that and we're going to sell.

Wow! That's a whopping pre-tax profit of 126,000.

So, just time for a little glass of champers

before they start their next project. Right, guys?

Are we doing it again, then?

-I don't know. Shall we?

-SHE LAUGHS

You said, when we were doing it, we weren't doing any more.

THEY LAUGH

Apparently, we are. SHE LAUGHS

# Let's get together

# The two of us over a glass of champagne... #

I'm in the town of Risca in South East Wales.

The town got a bit of a boost in 2008

when, after a gap of 46 years, the railway returned.

This made the area much more accessible

to hill walkers and mountain bikers.

Well, in Risca, will the property I'm here to see

be a risky investment?

Well, first impressions, I think possibly not.

Three-bed semidetached. £78,000 was the guide price.

Lovely brick exterior, so that's a lovely start.

Let's explore.

So, what have we got?

OK, that's a nice start.

Quite an impressive sort of entrance little area here,

but a few indications that, in its day,

this would have been quite a prestigious house.

There's some nice detailing along the coving there.

But entrance area here

through to your living area that's there.

Again, you've got a few nice original features

with those built-in cupboards with the lead glass windows in them,

which is quite pretty. Stairs up to your bedrooms.

And straightaway, you just get a really nice feel about this place.

Lots of light coming in through the windows and good size.

Look at this. Nice, high ceilings.

Slightly dated fireplace, but, you know,

at least you've got something there which could be a feature.

And then, very much of its day,

lots of sort of ancillary reception rooms.

Down this little step here and into this room here,

which is a sort of parlour,

I suppose you would have called it in its day.

Another open fire there.

There's probably something you could do

with the internal layout to modernise it a bit.

Or, I think, possibly, in a new layout,

this could be the kitchen

because you come through here and this is the existing kitchen.

As you can see, it's right at the back of the property.

It's too small for the size of the house,

even though you've got this nice little

utility area/larder thing there.

I would make this a really nice-sized utility area,

make that the kitchen, and suddenly, you've got a very workable space.

# A design for life. #

This house is only a nip and a tuck away from being a great family home.

Yes, there are a few corners that need attention,

but with three great-sized rooms downstairs,

you have plenty of space to shuffle them around

for a much more 21st-century layout.

So, upstairs, and at the top of the stairs,

you've got a bathroom and a separate loo.

Now, for once, I would contemplate knocking those two together

cos, for a house this size,

it isn't quite big enough to my mind.

A smaller bedroom towards the back,

and then a really nice landing area here.

Strip that back, that'd be really pleasant.

Then your two big bedrooms toward the front of the property.

What's that all about?

You've got this sliding door between this bedroom...

..and this bedroom.

-# Hello, wall

-Hello

# How'd things go for you today? #

What's that all about?

I mean, you'd expect that in some hotel bedrooms,

but not really in a semi in South Wales.

Hey, it's a design feature you don't see very often,

so you could either make the most of it or block it up.

# Too many walls have been built in between us... #

I like a bit of open-plan myself,

but not generally between two bedrooms.

Up here, you can start to see a few more renovation pounds

disappearing into the essential repairs pot.

There are signs of rotting floors,

but there are still lots of original features

and lovely proportions.

So, it's pretty spacious inside. What about outside space?

Well, I've come to the rear of the property,

and a few little outbuildings, which are always useful.

I don't think much scope for an extension,

although some of the neighbours have put one on,

so that's something you could consider.

But what you have got is a really nice-sized back garden.

It's sort of terraced, which is good.

Some existing plants, which is also good.

You've got a greenhouse.

It benefits from its own garage, which is doubly good.

A, you've got the garage,

and B, you've got an access road at the back there,

so it's just adding to an already pretty nice, livable house.

Other additions to the house are not quite as successful.

You can see the way extra bits and pieces have been bolted on,

like the cute little...

Hmm, I guess it's a conservatory.

And keeping that period feel going,

there's also an authentic loo lurking amongst the outbuildings.

But you could have a lot of fun with this house,

and I think it would make a great family home.

Time to find out if a local estate agent agrees with me.

It needs a fair bit of work doing to this property,

from sort of decoration to new carpets.

I've noticed as well that it's single-glazed windows,

so obviously, I think probably most people

put double glazing in now.

There has been a few sort of damp areas I've spotted as well,

so I think they need addressing.

I would probably think in the region of about £20,000 to £25,000

needs spending on the property.

Assuming you got it for anything like the guide price

and spent £25,000 on its upgrade,

that would take your spend to just past the £100,000 mark.

So, would it be worth it?

Once the work's complete,

I feel the sale value would be between £135,000 to £140,000,

and rental value, I feel, would be around £550 per calendar month.

Well, yes, a bit of updating required,

but nothing too daunting.

Do that and what you've got yourself here

is a really good quality, solid, semidetached property.

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

Lot number 24.

I have a proxy bid on this. Guided at £78,000.

I don't know. Start with a proxy bid at 70,000.

At £70,000, I've got proxy.

71. Thank you. 71.

And two here now. 73. 73.

74. 75. 76.

77?

77. 78. 79. And 80.

81? 81. 81. The proxy's now out. 81, I've got, towards the back.

82. It's with you at 81, sir.

82 now, can I see? Thank you. At 82 there. 82.

83. Back to you, sir. 83?

83. 84 now. 84. 85?

85. 86. 86, no.

At 85 with you right at the back.

You're now out, seated, and the proxy's out.

At £85,000, and for the first time.

At £85,000, then, for the second time.

Third and last time, right at the back of the room at £85,000.

-GAVEL BANGS

-Yours, sir. Well done.

Your number, please?

The successful bid of 85,000 was made by Owen.

Owen was at the very back of the auction room,

so we couldn't see him, however, he came along to meet me

at this nice house,

which, it turns out, he knows rather well.

-Owen, good to meet you.

-Right. Pleased to meet you.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy this house.

Well, it's opposite a property I own, where I live.

-Opposite?

-Yeah.

-You live across the road?

-I live across the road.

-Oh, right.

-Yeah.

-So, you saw it up for auction, then, did you?

-Yeah.

I tried to buy it before auction, but we couldn't get anywhere,

so we let it go to auction and bought it at auction.

Right. Can I ask the price you were trying to pay for it beforehand?

Was it more or less than you paid at the auction?

Well, it was less I was trying to get it for,

but I had my figure before I went to auction.

Once I knew it was going to auction, you know, I didn't negotiate then.

-I just let it go to auction.

-Right.

-Were you happy with what you paid in the end?

-Yeah, it came on my mark.

-That was my mark.

-Right.

-And that was it.

Brilliant. So, why did you want to buy it?

Just something to do up, and I had some money to move around,

so I thought I'd just buy it.

I can fall out of bed and jump into work and...

MARTIN LAUGHS ..easy as that.

-Yeah, it's certainly a great commute.

-That's right.

-Is this something you've done before?

-Yes.

This'll be the fifth in this street that I have done up,

-and I've built three houses in the street.

-Oh, wow.

So, I just like to keep it local.

-HE LAUGHS

-Very local.

# Just like me

# They long to be

# Close to you. #

Normally, Owen sells on his properties,

but for this one, he has a potential tenant lined up,

so he might rent it out.

And living across the road will make it handy to keep an eye on things.

-So, is this what you do full-time?

-I do do it full-time, yeah.

Any other things you get involved in?

I do a bit of farming. I've got about 160 acres.

A bit of farming? 160 acres?

-Well, I bought the land for future.

-What kind of farming?

-Beef.

Do you do it on a daily basis or do you have a team of people

-who look after the farm for you?

-No, no, a daily basis.

I do the farming before I go to work

and I do the farming when I finish work.

-HE CHUCKLES

-And your work is doing up houses?

-Yeah, well, and building work as well.

-Right.

Houses. New houses. Whichever takes my fancy.

So, what was the interest in property?

That's the day job, in a way?

-Well, it's always been 50-50, more or less.

-OK.

People complained cos I went to the houses early in the morning,

so I thought I'd do the farm first

so I could get to the houses a bit later.

-HE LAUGHS

-Wow. And do you have weekends off?

-Not very often, no.

-No.

And the game plan is to build up a pension pot, is it, then, or...?

No, I just fancied this because it was opposite.

So, tell me what you're going to do to this one.

Well, a new damp course, rewire, new central heating system.

Um, that's about it, really.

-And redecorate.

-Kitchen?

-New kitchen, bathroom.

It's a complete gut-out, really. MARTIN LAUGHS

But no, no, it'll be up to, you know, a good standard.

A good standard. And how much of that work can you do yourself?

I can do it all, but with the regulations today,

-you've got to get a ticket for everything, so...

-Right.

..there's two tickets I can't provide.

-Gas and electric.

-Gas and electric.

Yeah, the tickets Owen refers to

are gas and electrical safety certificates,

and they are a must for landlords and homeowners.

He has set aside a sensible budget of 20 grand,

but given his 160 acres and 60 cattle to look after,

how long is gutting and renovating this house going to take?

-Depends on the weather and how the farm is going.

-Right.

-I'm governed by the hay and silage and everything else.

-Wow.

-Hopefully, three to five months.

-OK.

And then, when will you decide whether or not

you're going to rent it or sell it?

Depending on what the market's like,

if it's picked up a bit, then it'll be sold.

If it doesn't, then I've got the option of putting a renter in there.

OK. Have you scouted the street out?

Are there many more that could come under your wing?

There's one, potentially. HE LAUGHS

-You're already thinking about it.

-You know, just wait.

-Right. Wow.

Does anyone ever tell you to slow down and chill out?

-My daughters do, yeah.

-And do you ignore them?

-I am taking notice now.

-Are you?

-Yeah.

I'm only doing 16 hours instead of 18.

MARTIN LAUGHS But other than that...

Well, listen, congratulations, and good luck with it.

-Thank you very much.

-We'll see how you get on.

-Yeah. Lovely.

Well, there's an old expression, isn't there?

If you want something done, ask a busy person,

and Owen is certainly that, starting his day as a farmer,

having the middle bit as a property developer,

and then going back to being a farmer again.

-HE LAUGHS

-At least he hasn't got very far

to travel to work.

You can find out how he gets on

sorting this place out later in the show.

That was the tale of the first property,

but what about the other two?

Yes, have the renovations been plain sailing

or floundered on the rocks?

I think it's time to find out.

Back to Telford in Shropshire now,

and a short walk away from the rejuvenated town centre.

I like this two-bed flat guided at £55,000.

Granted, it was a bit unloved,

and I couldn't help thinking the space could be better used.

I always want to try and create as much space as you possibly can.

I'm hoping this is the bedroom.

So, why couldn't you...? Let me just investigate.

Unfortunately, due to the freeholder restrictions,

that particular option was a no-no.

There was plenty to be getting on with, though,

but none of it seemed all that scary.

All seems pretty cosmetic at the moment from what I can see,

and there's no change in here.

All just looks a little bit tired, could do with a lick of paint.

Could do with some carpets, some new flooring in here,

and a brand kitchen as well, but nothing major.

The flat was bought for £62,000 by Kumar,

who is a part-time developer with a whole load of local properties.

Surely he'd make no mistake when buying at auction.

-Did you read the legal pack?

-No, I didn't read the legal pack...

-Ah!

..and I didn't view the property.

-Two! Two of our rules.

-Two, yeah.

You know I will never tire of reminding you guys

to read the legal pack. I'll never tire of it.

And, of course, there was a bit of expensive detail

in that legal pack as well.

The costs and charges in the next five years,

which will be spent on the block,

-which is roughly about £4,000 to £5,000.

-OK.

Yeah, even the most experienced developers make mistakes.

Let's hope he doesn't pay for it in the long run.

Kumar paid £62,000 for the flat, and had a budget of only 3,000,

but his secret weapon was Amrit, his builder,

who was confident he could turn around the flat

in around two to three weeks.

We've come back four weeks later

to see if his fast turnaround has happened.

# But if you're looking for fast love

# If that's love in your eyes

# It's more than enough

# Had some bad love

# Some fast love is all that I've got on my mind... #

This fast and furious flat fix has turned

a tired, old apartment into a bright, modern home.

But it's not just a lick of paint and some wallpaper.

The whole bathroom was replaced,

so all the units are brand-new units.

Then, in the kitchen, a good cleaning went up,

and then the whole kitchen was kind of,

you know, decorated, painted.

In every single room, the flooring was replaced

just to give a bit of lift to the property.

Kumar has been renovating properties for over ten years now,

and he and his builder Amrit have it down to a T,

and they don't hang around.

But not everything is under their control.

Just when they thought they'd crossed the finish line...

I came, after a week's time,

and I saw the bathroom a little bit flooded,

so I noticed there was a leak in the radiator.

Because of this, the water was going on the floor.

Obviously, it was a brand-new floor, so I called Amrit.

"Amrit, come on. Save my life, mate."

So, he came back and sorted it out.

It was just, like, for Amrit, a ten-minute job,

but obviously, it was a nasty surprise,

which I wasn't expecting, really.

But was the radiator the only thing to spring a leak?

How did Kumar's two to three grand budget hold up?

Well, give or take, I've spent about £2,300 altogether,

and that includes the new flooring

and it includes the painting work, new bathroom and everything.

# That's why I'm easy... #

It's no real surprise

to find that Kumar and Amrit are on time and in budget.

They're like a well-oiled machine

when it comes to turnaround in Telford.

But Kumar skipped a couple of key points when he bought this flat.

He didn't view it before the auction,

and he didn't read the legal pack.

Yeah, I took a bit of a gamble on this property,

but it was a calculated gamble because it's a leasehold property.

Structurally, anything couldn't be wrong

because it's a leasehold apartment.

Previously, I bought properties at auction

where they were in good shape.

But because I viewed those properties before,

this one, I didn't view it,

but I still would have gone for this property.

But the learning curve has been always see the property,

view it before you actually bid for it.

That confidence in the leasehold

has luckily held true for Kumar on this flat.

And as we know, leasehold properties

can cost you money in common repairs,

so do read the small print or at least read the legal pack.

Kumar bought the flat for £62,000 and spent 2,300 on renovations,

bringing his total spend to £64,300.

It's time to find out what two local estate agents think

of Kumar and Amrit's work.

It's the first time I've seen the property.

It's in a great area, great rental location,

and it looks like it'll make a good rental yield.

Having had the second visit, I'm quite impressed with it.

It's been given a brief makeover - nothing special -

but I think, with a view to the kind of market it's meant for,

it's really spot-on, I suppose.

I wouldn't have suggested spending any more on it,

and to do it on a budget is probably the best idea.

It's always important not to overspend

if you have your eye on a profit, so knowing your market is crucial.

And now, the moment of truth. What about those valuations?

I would value this property for sales at £62,000.

I would value this property for rental at £475 per calendar month.

Rental potential for the property is £500 per calendar month.

As for sales, it would be £67,000.

Based on those figures, if Kumar sold the flat,

he would either lose £2,400

or make 2,700 before costs and expenses.

But the rental figures mean a yield of between 8.8% and 9.3%.

So, what does Kumar think?

I would be happy with 65,000 if that's the valuation.

I'm much more, you know, for the rental yield

rather than the value of the property going up.

And there speaks a man who knows his priorities.

Anything around 9% is a very healthy yield indeed.

But what's next for this part-time property developer?

I have already bought another investment property in an auction.

I'm quite content with the portfolio I have,

I'm quite happy with the day job I have,

and I'll just carry on as it is for the next 15 years so -

maybe ten years if I'm lucky -

and then call it a day and retire, really.

It's time to go back to Risca near Newport in Wales

to see what happened to that semidetached house

with elegant, spacious rooms

and brick-built outbuildings that just went on and on and on.

The kitchen had seen better days,

but it presented opportunities aplenty.

You come through here and this is the existing kitchen.

As you can see, it's right at the back of the property.

It's too small for the size of the house,

even though you've got this nice little

utility area/larder thing there.

Upstairs, the tired feeling continued

with each of the three bedrooms needing a whole lot of love.

The bathroom is just about the right size

for a small studio flat, not a three-bedroom house.

And there was a special feature that had me guessing.

What's that all about?

You've got this sliding door between this bedroom...

..and this bedroom.

The property was bought by Owen for 85,000.

Owen is a local property developer and builder,

and when I say local, I mean across the road.

And since developing properties wasn't enough to keep Owen busy,

he saw that he could squeeze in

a bit of cattle farming in the mornings.

People complained cos I went to the houses early in the morning,

so I thought I'd do the farm first

so I could get to the houses a bit later.

-HE LAUGHS

-Wow. And do you have weekends off?

Um, not very often, no.

In what time he could spend away from farm work,

Owen planned on a thorough upgrade.

He hoped to spend no more than £20,000,

and aimed to complete the job within three to five months.

Well, we're back seven months later to see if this builder,

developer and farmer has managed to sow the seeds of success.

# I wish I lived in the golden age... #

From tip to toe, this semi has certainly got its glamour back.

I decided to do it before I bought it.

It was a house that had to be gutted.

There was no half measures, and it had to be done.

All new ceilings, new floors, central heating,

done the damp course.

The damp course was up to standard,

but if you do sell the house, you need a warranty,

so we were better to do it while we were doing it.

Then you've got that safeguard, you know, to sell it.

In fact, the only thing that hasn't been replaced

on the ground floor is the staircase.

The star of the show down here is the brand-new kitchen,

which has been created by knocking together

the old kitchen/parlour/store room and ramshackle outbuildings

to make a fabulous, south-facing kitchen/diner.

And there was even space left over to create a downstairs loo as well.

And upstairs, there's been a bit of a room revolution.

My thought was to combine the bathroom and toilet,

but Owen has gone one better.

Yeah, a lot of changes. The bathroom was in this room here.

We've moved that and put it in here now.

And the walls upstairs,

we've pulled in and rejigged them about

just to bring the extra bedroom spaces,

and take out the dead spaces to make it larger and more roomy.

So, we haven't altered the structural side of it.

It's just, well, rejigged it.

Spoken like a true builder.

Rejigging the walls sounds like he's shuffling a pack of cards.

Outside, the odd outbuildings have been either removed

or incorporated into the house,

and it's resulted in a sheltered patio

and a much better-looking house all round.

I hadn't done a whole property for a long time,

and an hour into the job, I realised why I stopped doing it.

Oh, I'm well pleased with the finish on it.

You know, I could go on spending money forever and a day,

but you just draw the line, and once you're happy with it,

that's where you finish.

Owen took a bit longer

than his original three- to five-month time schedule,

but he did have to fit in his beef farm around his building work.

He spent slightly over his estimated budget of 20,000,

coming in at £21,600.

And added to the purchase price,

this brings the total spend on the house to 106,600.

Time to find out what two local estate agents think

of Owen's handiwork.

I really like the layout.

It's got, obviously, individual rooms,

so people can have a bit more space, especially if they've got children

and want extra rooms rather than just one, big, open-plan room.

They've changed the layout upstairs as well,

which I really, really like.

I think it's a lovely property,

been renovated to a very high standard.

The selling points of the property are the sizes of the rooms,

the layout where the kitchen goes

into the dining room, the garden is south-facing,

and you've got the advantage of

the off-road parking with a garage.

All very positive stuff.

So, will Owen be reaping rewards on his investment of nearly 107,000?

I see this property being in the region of £135,000 to £140,000,

and on the rental market, I see it being £550 per calendar month.

The resale value of the property

would be in the region of £145,000 to £150,000.

The letting value would be in the region of

£550 to £600 per calendar month.

Based on that top figure,

there's a potential pre-tax profit of around 43,000.

If he did decide to rent, the yield -

again, based on that higher figure - would be just under 7%.

So, will these figures make him plump for rental or resale?

I'm surprised at the value. More than I thought.

I never budgeted for that, so it's all a bonus.

Rental - about on the mark.

Probably will put it on the market to try and sell.

I don't like renting, not when I've got a good property.

I've done about five other properties in the street,

sold them over the years,

so, you know, the street's been good to me.

Well, I've been good to the street as well

cos I put the properties back to right.

And with the property finished and the summer over,

is Owen finally going to get a chance to take a rest?

Our plan is now...

The cattle are going, most of them.

Flights are booked to Australia.

See my grandchildren, then I'll come back

and decide what we'll do from there.

Well, property development is always full of potential problems

and hideous hazards.

Yeah, but there can be rich rewards if you get it right.

So, join us next time for more Homes Under The Hammer stories.

-Goodbye.

-Bye-bye.

-Goodbye.