Episode 2 Homes Under the Hammer

Hello and welcome to the programme. I don't know about you guys,

but I love properties with a bit of character,

and if they're a bit quirky, you know?

Yeah, it doesn't matter how unique a property is,

there'll be somebody out there it's perfect for.

Yeah, that's the beauty of the business.

Variety is the spice of life

and maybe you can find your next property under the hammer.

Auction catalogues can be overwhelming,

with hundreds of lots. It's hard to know where to start.

And if competition is fierce, well,

it can be a real bidding battle to get the property you want.

Yeah, so let's meet the three buyers who won their lots on today's show.

In this Derby three-bed house, there is a difference in measurements.

That seems bigger - wider - than downstairs.

And, in London, there are some differing opinions

with two sibling property developers.

-I don't...

-I will be project-managing.

-I thought I was.

-No.

And, in Warrington, the buyer of this flat thinks

a distance of 6,000 miles makes no difference at all.

Well, I was... I was sitting at home in Cape Town.

Adrian was there bidding on my behalf.

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.

Sold.

Today, I'm in northeast Derby, and the suburb of Chaddesden.

This lovely parish church is a Grade I listed building,

which dates back to the mid-14th century.

I'm in Chaddesden,

on an estate consisting largely of ex-local authority houses,

to see what's described in the catalogue as a "mid-townhouse",

but you could call it a mid-terrace if you like,

but £60,000, three bedrooms...

It sounds like a very interesting investment opportunity.

So, I'm expecting nice-sized rooms, solid walls -

the usual things you get in an ex-local authority property.

And, sure enough, through the front door, stairs facing you

up to the bedrooms, then into your main living area.

Looks like we've got double glazing.

No, it actually looks like we've got a radiator.

It's the hottest day of the year.

It's not surprising I'm confusing a radiator with double glazing.

It doesn't matter. Ha-ha(!) Lovely. Double radiator, that was it!

Second word, not glazing, is radiator.

So, it looks like we've at least got central heating. Phew.

One thing we don't have, oh, look, is double glazing.

Could that be more wrong if I tried? I don't know.

Anyway, let's assume not.

Passing through the room with the double radiator,

one of my favourite features so far,

and we come to the rear of the property.

At the back is this dining area, which is quite pleasant,

and then somebody's done something quite imaginative -

they've built an extension on the back, extending the size of

the kitchen and turning it into a really lovely

family, sort of, living area.

So, as downstairs go, and as central heating systems go,

it's all looking brilliant.

There's a double radiator, too, in what used to be the kitchen.

A few things need replacing

but the majority would clean up to be brilliant enough for letting.

There is even space for a small office under the stairs.

As I said, brilliant.

MUSIC: Brilliant by Ultravox

So, upstairs, three bedrooms - smallish one there.

Good-sized double bedroom at the front.

Bathroom and loo up here, which is good news.

Obviously, they could do with updating.

But at least all the facilities, the sewage pipes, the rest of the

pipework, they're all in the right place to make that job fairly easy.

And then through into your rear bedroom. Sounds pretty good.

Hmm.

There's something not quite right here. Upstairs, the house...

The bedroom's here. That seems bigger - wider - than downstairs.

I need to check that out.

MUSIC: Mambo No. 5 instrumental

Three. Three.

One, two, three, four, five.

So it's three metres, roughly, wide,

from that same point downstairs - it's five metres up here.

What is going on? I need to head outside to find out.

Well, I think I might have found my answer

because, at the side of the property,

there is actually this little passageway that links front to back,

and above it is where that extra bit of the bedrooms is situated.

So, what you've got is a classic case of a flying freehold.

Now, that's not necessarily an issue,

but it's really important to discover who actually owns

and has access through this passageway,

and who owns this bit of land.

That should be in the title deeds, something which your solicitor

should easily be able to check out, but you do need to know.

Especially as mortgage lenders can be

put off by the presence of a flying freehold.

For instance, it raises questions of who's

responsible for maintaining the ground underneath.

# Fear of flying... #

So, at the back, and a pretty decent-sized rear garden,

although clearly it could do with a bit of a hedge-trim, but it's

a nice-sized space for what could be a really pleasant family home.

And also, we get to see the extension.

Now, I like the way this has been done.

Obviously, it matches the brickwork of the original property,

so that's good. But, of course, with any extension,

you want to make sure that it was built properly,

so did it have foundations that were right?

Has it got damp-proofing? All that kind of stuff.

You also want to know that they obtained the correct

planning permissions and followed

building regulations when it was built.

All that kind of information should be in the legal pack,

so whenever you see an extension, make sure that you

double-check the legal pack to see the things like

planning permission and building regulations approval

have been included.

We asked a property expert at the auction house that sold

the property to come and give us the benefit of his local knowledge.

To start with,

what sort of market would this property best be suited to?

Because of the type of property it is -

it's an ex-local authority house - and because of where it is,

I think there's no doubt about it,

that this will appeal to the rental market,

and there is a strong demand for rented accommodation here.

So, the likely prospect is the lettings market but,

if an outright sale could be made, after refurbishing,

what's the potential for this £60,000-guided property?

I would say, once renovated,

you'd put this on the market sensibly at no more than £79,950.

You may have to drop to £75,000 to sell it

but that would be about as far as it could go.

Not much room, then, for the costs of refurbishment and profit.

What about rental income?

In terms of rental value, renovated, it's £475-£500 a calendar month.

Well, a few things to check out in the legal pack on this one -

the flying freehold, and the planning permission

and building regulations for that extension.

Apart from that, though, a good, solid house at a good price.

Yeah, an interesting investment.

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

We come back into Derby. Lot 48 in Chaddesden.

It's a gas centrally-heated, three-bedroomed mid-townhouse.

It's got a good investment potential and it's a vacant freehold property.

Start me where you like with this one. May I say 60,000?

58, then, to put it into the bidding? 58? Thank you. £58,000.

58, I've got as a start. 59, I'm looking for. 59 is bid there.

At 59,000, and 60, £60,000...

Having eventually reached the guide price,

the bidding continues to where we rejoin at 62,500.

62.5, 63, 63.5,

63.5, 64, 64.5,

64.5, 65? 65.5. 66.

66.5. 66,500? Sure?

All done. Sold at 66,500.

The successful bidder was Darren, who is local to the area.

He bought his first property here eight years ago

and has been getting experience in refurbishment since then.

We met up at his latest £66,500 purchase.

-Darren, good to meet you.

-And you.

-Congratulations.

-Thank you very much.

-Tell me why you wanted to buy this house.

Erm, just the area.

-I've got one down the road. The daughter wants this one.

-Oh?

-How old's your daughter?

-Not my daughter.

The tenant that I've got down the road - it's her daughter.

Oh. Now, that's interesting, because that sometimes happens, doesn't it,

-to landlords?

-Yeah.

-If you've been a good landlord

-they pass the message on down the family.

-Yes.

Right. So, did you know that before you bought it or...?

-Yes. Yeah, yeah.

-So, you bought it with that in mind.

-Mm-hm.

-Tell me more about you. What do you do?

-I'm a local builder.

I work for the local council authority,

doing disabled adjustments to properties, wet rooms, extensions...

I love it and this was a bit of a hobby.

-You've built up a portfolio of properties over time?

-Yeah,

I started eight years ago and bought one just down the road,

which I bought for my young lad.

-Right.

-Who's 13 now.

-Right.

-Just to give him a bit of a kick-start in life.

-Oh, wow.

So, yeah, I loved it that much, I got a bit of a bug.

So, tell me why you wanted the specific house.

Just the tenant was ready and waiting.

It's on the doorstep to where I live and,

if there is an issue or problem, I can be here in 10-20 minutes.

So I just like to keep all of them in the same location.

Yeah, well, I mean, there is a strategy that works.

That makes perfect sense.

So, the fact that you've already got somebody lined up to come in here,

do they get some input into what you do here?

Yeah, definitely, no, the thing that I've learnt through doing them

is I try and get the tenant involved from day dot.

She will come in and she's going to paint and things like that.

-Oh, right?

-A choice of carpets.

If they've done a bit to it, it feels their...their own place.

What a great idea.

Does that add to your budget at all, or does it make any difference?

Slightly, slightly, but it's just, I mean...

Just, having the respect for the property, it pays off long-term.

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

Erm, possibly clean the kitchen up, give it a good scrub.

It's not that old when the extension was done, it was fitted.

We need a new boiler going in as we've got the old back boiler.

A few new windows at the front that have not been done yet.

-New front door and decor, carpets...

-Right.

Obviously, the bathroom is where it needs to be, upstairs.

Yeah, the bathroom in the right place.

I can't make my mind up whether it will be replaced as yet, but, yeah,

a good chop down in the bushes in the back, so we can see the grass.

-But, yeah.

-So, what do you know about the passage at the side,

with the, sort of, potential flying freehold?

Yeah, well, I knew from the beginning that the passage

was owned by this property and, obviously,

the bedrooms fly over the top of the passageway.

-Yeah.

-But it's actually not a flying freehold issue, then, because...

-No, no, no. Yeah, we own the ground below.

-Yeah.

Thankfully, the passageway isn't an issue,

but the same can't be said for the rear extension.

I think it was the solicitor that picked it up,

that there was no planning or building control was

applied for, but, being in the trade, I knew it would...

Some things were possible, like an insurance indemnity

and things like that, which has been taken out for it.

-How much does the insurance cost?

-£14.10.

-£14.10?

-£14.10, yeah.

-That's a crazy amount of money, isn't it?

-Well, it is.

It's one thing that I hoped I didn't miss it in the pack,

cos I'd be kicking myself, but at that price,

I knew it was similar to the property I live in now.

It was a similar thing I had to take out on that.

The idea is the insurance would cover the cost of rectifying

the work if the council decided

you were in breach of building regulations.

If you do end up with work done without planning permission

and it doesn't fall within permitted development,

you can apply for retrospective planning permission but, really,

to avoid hassle, always consult the council.

-What kind of budget is there?

-About £3,500-£4,000.

-OK. A timescale?

-The electrician's coming tonight.

-Oh, is he? Oh, wow.

-Yeah.

What's he doing? Is he checking it out?

He's going to fit the smokes, check the electrics, so we have

smokes and heat detectors where we need them, and a general check over.

-Right.

-But, yeah, the...

-The tenant's going to start painting next week.

-Wow.

And when do they start paying rent?

Sometimes I give them a week free rent just to get in there, possibly

two weeks, but, yeah, hopefully, in two or three weeks, the rent.

-Great, well, listen, congratulations.

-Yes.

-Thank you very much.

-I look forward to seeing how you get on.

-Thank you.

Yeah, so, there you go,

another property tip you've learnt on Homes Under The Hammer.

If you're thinking of renting out your property,

why not get your incoming tenant to choose how you do it?

It makes perfect sense and they'll even pick up a paintbrush.

So, with the tenant's help,

how will Darren get on sorting this place out?

You can find out later in the show.

I'm in the city of Westminster,

close to one of the BBC's earliest buildings, Maida Vale Studios,

where thousands of music recordings have been made, including this one.

SWING MUSIC

London's Maida Vale got its name from a public house named

after John Stuart, Count of Maida,

which opened soon after the Battle of Maida in 1806.

Nowadays, this affluent area has some lovely cafes

and restaurants and it's made up mostly of large,

late Victorian and Edwardian blocks of mansion flats.

You might have guessed it - a sought-after place to live,

and property prices here, they don't come cheap.

They certainly don't, and the average value of a flat

in this desirable area currently stands at over £700,000.

The flat I'm here to see is in this building, here.

It had a guide price of £340,000,

and it's described as having three rooms.

Now, what does that mean, I wonder?

Well, it is on the ground floor,

so I haven't got to walk far to find out.

This is a handsome Art Deco building, no less

a fashionable residence today than it was back in the 1920s and '30s.

Although parking is forbidden in the surrounding roads,

around the back are some car parking spaces,

but they are allocated, so it really is first-come, first-served.

Right, I'm quite intrigued to find out the layout of this property.

It's small, it's quite angular and awkward.

You've got a wall slanted there.

So, this is what it means by "three rooms".

A rather small bedroom there. Lots of cupboard space here,

which I would get rid of instantly to open up this hallway.

A ridiculously small...

I wouldn't even call it a box room, because it's tiny. It's a...

It's a coat cupboard. It's a very small room.

I would never call that a bedroom, so that's a rather weird space.

You've also got a bathroom on the back wall, here,

and into the main living area.

Now, I'm guessing that this kitchen probably used to live in that

rather small room, and somebody's opened this up to call it

two bedrooms, although you can't really call that two bedrooms.

I'm not sure if this works, lined up along the back wall.

This is the only source of heat at the moment,

so that will need to be upgraded.

And I'm just wondering, if you could knock this wall down,

and incorporate the very tiny,

little room next door into this space, and put the kitchen back

in there, you could have a really nice, open-plan, L-shaped space.

You could put the kitchen back. You'd have two lovely windows.

It would make it lighter and brighter.

And I just think a one-bedroom flat, rather than a very small,

compromised two-bedroom flat, would be so much better.

The compactness of what should be described as a one-bedroom flat

could certainly be improved upon.

Leaving the configuration as it is really is a nonstarter for me.

Even if it was occupied by just one person, I think they'd be saying...

# Small world... #

Opinions are divided when it comes to

the popularity of ground-floor flats,

but the general consensus is that

they are less desirable than being, let's say, on the first floor.

A lack of security is often cited as a major concern,

so no leaving your windows open on a hot summer's day

when you pop out for that pint of milk.

However, there are some positives, too.

They are easier to access,

opening them up to a wider range of residents.

Plus, you really don't have to traipse up and down those

flights of stairs and worry about, maybe, lifts not working.

Really, well, there are no hard and fast rules,

and I think it all comes down to personal preference.

We invited a local estate agent along to get his opinion

on this three-roomed flat and to see what his view would be on making it

a two-roomed flat, bearing in mind that this is a leasehold property.

If you wanted to change any configurations of the flat,

you would either need the management agent's consent or...

the freeholder's consent.

It's not just the number of rooms that buyers look out for.

Other factors influence the value of this property, guided at 340,000.

Whether it's a one-bedroom or a two-bedroom,

it doesn't really matter.

Flats in this area tend to go by pound per square foot,

so I would say, as a one-bed or two-bedroom,

you're probably looking in the region of £500,000.

That's fully refurbished, of course,

but plenty of scope there if you can get it for the guide.

Now, what about rental?

Once totally renovated,

I would think you'll be looking at around £1,700 per calendar month.

Well, there's not much of a kitchen, a second bedroom or a hallway, here.

Compact is the way I would describe it at the moment.

Still, with some layout changes,

it could be transformed into a lovely bijou home

for someone in the capital.

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

Lot ten, Maida Vale, W9.

Who'd like to start off on this?

I'll start at three... I don't know, 320? Go from there.

The 320, anywhere? 320, with you, madam. 325, elsewhere?

The guide price is soon overtaken

and we rejoin the bidding at £417,000.

417. 418. 419. 420.

420, madam? 421. 422.

Well done. 423?

It's Maida Vale. 423. 424.

424. 425.

426.

Lady on my left, 425.

First time... Second time...

Third and last time...

Sold, 425, madam.

And the successful bidders, paying significantly over

the guide price at 425,000, were brother and sister David and Lorena.

David has a background in IT and Lorena is a dancer.

They've both dabbled in property independently as well

as together, and they joined me back at the flat to tell me

about their latest joint venture.

Guys, congratulations. Lovely to meet you today,

-Lorena and David.

-Lovely to meet you.

-So, who found this property, then?

-We both found it.

-We were going through an auction catalogue.

-Yeah.

And we picked out about five or six properties that

had potential for renovation

and this one was the one we ended up with.

-And why did this appeal to you?

-The location.

But, I must say, we were leaving the auction after the lot that we were

going for went, and I heard "Maida Vale" and I just went back in.

-I put my hand up.

-We had forgotten about this property, actually.

I mean, you just took it as, "It's in Maida Vale - it must be OK."

Well, it was...

We did chat to the chap who shows people round all the properties,

and he gave us a...

-He said, "It's not two-bedroom."

-He did tell you that?

Yeah, so we knew it was only one-bedroom.

The hammer went down, you bid for it, you got it. You got the keys.

-Were you eager to get in here to see what you'd bought?

-Yes.

-Very. Yeah.

We walked in and my first reaction was, the wallpaper was lovely

but it was too small.

"Too small"? With those two words,

Lorena has hit the nail squarely on the head with this flat.

But I think we're on the same page

when it comes to remedying the situation.

Well, I happen to know that, in an area like this,

it's all sold or rented on square footage.

It doesn't matter whether it's one bedroom or two bedrooms,

and you certainly couldn't call that a second bedroom,

so please tell me, now, that you are thinking about knocking through

-and opening the space up.

-Yes.

-Hurray!

-Yay!

-Good.

Right, we've got that sorted,

so you are going to have an L-shaped space in here.

-Yeah, absolutely.

-Yes, open-plan kitchen into the...

Fabulous, because can you imagine walking in and having, you know,

two lovely windows? Cos it's a little bit dark and dingy in here.

To have that extra window is going to let so much more light flood in.

Yes. It will.

So, how is this brother-sister machine going to work?

Who's going to be playing what role?

-I do women's stuff like tiling, flooring...

-Do you?

Yeah. Yeah.

I was taught by the best, my brother.

Erm, so, I can do a few bits. The...

The decorating, obviously, and...

And keeping him at... Make sure he does what he's got to do.

-Make sure I'm in work on time every morning.

-Oh, yeah.

And what will you be doing?

If you're doing the tiling and the flooring and the decorating,

that doesn't leave an awful lot for you to do, there.

-And I'll be doing that, as well, I suspect.

-Probably.

When she says she'll be doing it,

she'll be passing me a paintbrush, I suspect.

So, who's in charge and who's going to set the schedule?

-I would say I'm in charge.

-I don't think so.

-I will be project-managing.

-I thought I was.

-No.

-OK!

You can see we're going to get on really well.

Well, they'd better agree on who's in charge soon, because David

is leaving his career in IT to go into developing full-time.

Thankfully, they have agreed on a budget of £15,000,

but could sibling disharmony disrupt this project?

Apart from joking around, we do get on very well, which is great

and, yeah, we're going to carry on doing this as long as we can.

-I think we will.

-Yes.

-So, what are you most looking forward to with this?

-Finishing it!

-My next question, how long is it going to take you both?

-Two months.

-Three months.

-Two.

We're hoping!

-Erring on the side of caution, I say...

-Three months tops?

-Yes, three months tops.

-Shall we go with that? £15,000.

-Yes.

Is there any chance you might not get permission

to take that wall down? What if you don't?

Yes, always a possibility. You never know.

Until you've gone through it, there's no way of saying whether...

There is no guarantee but...

I think that is the only way to add value to this property.

If you can't take that wall down,

you could be in a little bit of danger,

so let's keep our fingers crossed.

-Yes.

-And hope you get the permissions required.

-Yup.

-Good luck.

-Thank you so much.

-I look forward to seeing it.

-Well done.

-Lovely to meet you today.

-Thank you.

-Well done.

-Thanks.

-Thank you.

-Thank you.

Well, location is important,

but I would still never advocate buying blind.

Tut-tut, Lorena and David.

Still, I do like their ideas for turning this flat around,

and I just hope the freeholder's permission,

or any sibling squabbles, don't cause problems for them.

Will they quickstep to success?

You can join me later in the programme

and find out how the brother-and-sister team get on.

Still to come, an overseas investor buys into Warrington.

Have you done a little bit of research in the area?

It's the first time I've ever been in Warrington

so I don't know this area well at all.

And we find out if David and Lorena are still on speaking terms.

I'll tell you the truth...

Back, now, to the Chaddesden district of Derby,

where I looked around this three-bed mid-terrace,

which was in need of a bit of sprucing up.

Like most former council properties, it's a solid house,

with good-proportioned rooms, including a kitchen extension.

And no great surprises upstairs, with three bedrooms and a bathroom.

Well, hopefully, lots of things in here would change,

under the ownership of Darren,

a builder and part-time property developer.

He paid £66,500 for this house, and was in the fortunate position

of already having a tenant lined up, even before he went to the auction.

So, the fact you've already got somebody lined up

to come in here, do they get some input into what you're going to do?

Yeah, definitely, no, the thing that I've learnt through doing them

is I try and get the tenant involved from day dot.

She will come in and she's going to paint and things like that.

-Oh, right?

-A choice of carpets...

If they've done a bit to it, it feels their...their own place.

What a great idea. It...

Does that add to your budget at all or does it make any difference?

Slightly, slightly, but it's just something I think...

Just, having the respect for the property, it pays off long-term.

-What kind of budget is there?

-About 3,500-4,000.

-OK. And timescale?

-The electrician's coming tonight.

-Oh, is he? Oh, wow. What's he doing?

Is he just checking it out?

He's going to fit the smokes, check the electrics, so we have smokes

and heat detectors where we need them, and a general check-over.

-Right.

-But, yeah, the...

The tenant's going to start painting next week.

So, Darren was already off

and running on his two-to-three-week timescale.

In fact, his tenant moved in so quickly, it's been five months

until we could arrange a mutually convenient time to see the progress.

There's a neutral colour scheme

and the old gas fire and hearth have long gone.

MUSIC: Hey Boy by Take That

# Oh, it's only going to drive you crazy

# Don't wait for someone to change your life... #

Darren's not waiting for anyone to change his life.

He's hoping his buy-to-let properties will take

care of him in his retirement.

# Don't wait for someone Go and change your life

# Hey, boy, what ya got?

# Don't leave me on the floor... #

Speaking of the floor, all floor coverings have been refreshed

with new carpet or laminate.

Darren says his new tenant has settled in

and is very much at home here.

# Uh-oh, don't want no trouble in the house... #

Darren decided not to renew the bathroom suite.

# Don't want no trouble in the house. #

But his garden tools got quite a workout in the back garden.

The garden itself, in the rear, yes, we...

It was a bit of a jungle at the beginning,

so we spent a day or so hacking it all back to...

Yeah, it's a garden now.

One of the problems we had was the boiler itself.

The Government did have in place a scheme where

they change boilers, but that seemed to have changed since my last house

I did, so a bit of a problem, but we just fitted a boiler ourselves.

Was that the only thing that didn't go as planned?

The one thing that we did change our mind on was

the windows at the front of the property.

They are timbers. The rear is plastic.

So, at some later date, they'll be changed.

Apart from getting the new tenant in to help paint,

were there any other tricks in meeting the two-week schedule?

With having my own building firm, we had a couple of rainy days,

so we dropped the guys on here to give it a kick-start and,

yeah, it helped out no end.

And how's the £3,500-£4,000 budget fared?

The budget came under the original figure.

We did it for about £1,500.

I think it was a bit lower than the original budget because

the windows wasn't done, but, yeah, well happy with that one.

We called on two local property experts to give us

their thoughts and valuations.

Their local knowledge will be especially useful.

This is my second time in the property.

I came here originally when we took the instruction,

before it was offered for sale at the auction.

My first impressions are that it's now bright and clean,

and fresh and ready for immediate occupation.

The main selling points of the property, I would say,

would be the nice-sized garden,

there's off-road parking, and it's not too far from town.

I think the standard of finish is OK. It's kind of what

you would expect for a property of this type in this location.

It's not fantastic, but it's OK.

Darren's already let the property,

but is renting a sensible long-term option here?

The rental market is very strong and three bedrooms is always a bonus.

Most of the properties, or a lot of the properties

that come to the rental market, are often two-beds.

So, yes, three-bedroom property, great for a family.

Darren probably won't want to be selling any time soon but,

if he did, what kind of profit,

before taxes and expenses, could the hey expect?

Remember, he spent £66,500 at auction and a further

£1,500 on refurbishment, taking his total investment to £68,000.

If this property were offered for sale on today's market,

I would anticipate a sale being achieved

somewhere in the region of £80,000-£85,000.

If we were to put this property up for sale,

I would ask just shy of £80,000,

and I'd expect offers between £70,000-£75,000.

I purchased the properties purely just for my pension.

Values are going to go up and down, no doubt,

in the next 10-20 years, but I'm not in it to sell them on.

-It's my pension pot.

-I thought so. Now, what about rental?

I would say that, if this property were offered to the rental market,

it would achieve somewhere in the region

of £500-£525 per calendar month.

The rental value for this, I would imagine, would be

in the region of £500 per calendar month.

It's already rented out at £595 per calendar month.

So Darren's punching above his weight with the rental income,

which equates to a yield of 10.5%.

So, is he keen to keep adding to his pension in this way?

I would buy at auction again because, yeah,

there's some good properties at some good prices.

This green and pleasant landscape is Sankey Valley Park in Warrington.

Stretching for 1.5 miles,

the park runs alongside a section of the Sankey Valley Canal.

It was the first-ever canal to be cut into England

and was opened in 1557 to transport coal from mines

around St Helens to Liverpool and Cheshire.

Just under a mile away from Sankey Valley Park,

and not too far from Warrington town centre,

is the auction lot I'm here to see.

It's a ground-floor, one-bedroom apartment,

with a guide price of £30,000 plus.

I'm going to take a look inside.

So, I'm in through the side door,

which would have been the back door when this was one house,

but now it's split into two apartments -

one on top and one on the bottom. So, what have we got?

A decent-sized bathroom in good condition,

with a shower over the bath, as well.

You can keep that, no problem at all.

You could get that painted in a different colour,

just to suit you, but quite easily keep that.

Into the kitchen - long galley kitchen.

Again, this seems to have been looked after.

Great condition, decent size, double-glazed windows...

You might want to personalise it and maybe change the flooring,

but you'd get away with keeping it,

and a combi boiler so you've got central heating.

Into the bedroom, which, again, is in good condition,

decent size, again.

I'm repeating myself but it's the truth.

Get a double bed, single bed, double glazing... Lots of light.

It's a good start.

# You got me stuck on repeat... #

Well, good things are worth repeating and it's the same formula

in the lounge - lots of light and plenty of space.

With so little needing to be done in here,

this is obviously going to make a great rental opportunity.

One-bed flats in this area are currently renting at around

£350 per calendar month,

which, if you get this place for anything near the guide price

of £30,000, means a whopping yield of 14%.

I'd better repeat that - 14%.

So, I've just come out to the back garden and, as you can see,

it's split into two, just as the house is now

- an apartment on the top and an apartment on the bottom.

What I would say, when buying properties like these,

make sure there's a proper lease in place which makes both owners

equally liable for any repairs or any damages at all.

Maybe the roof needs doing or the guttering needs to be sorted out.

Make sure there's no grey areas.

Saying that...

easily-maintained back garden, a bit of outside space...

I don't think it's too bad at all.

So, this flat looks increasingly like a great investment opportunity,

but what's the area like?

Who better to ask than an agent from the auction house who sold it?

The area is very close to Warrington town centre.

You're within a five-minute drive and it's really accessible

to the motorway network system - the M62, the M56, the M6 -

so in terms of getting access to other cities,

it's a really good location. And it's a good residential area

with lots of local amenities as well.

The local market's been really good in the last 18 months or so.

And we've seen an upturn in activity in all price ranges

and also with the same for lettings.

There's been a strong demand for rentals

and we're seeing that properties coming on to the market,

whether for sale or for let, are going really well.

And, if this flat was given a bit of a polish,

what could it achieve on the resale market?

I think they could probably achieve somewhere between £45,000-£50,000.

This is a popular rental area

and the agent was confident this flat would exceed the going rate

I mentioned earlier, pitching it at £395 per calendar month.

This is a rare one for Hammer,

cos there's not much that needs doing at all.

And it's difficult to see how you can add much value.

This one is definitely for the rental market, for me.

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

Over in Warrington, the self-contained,

ground-floor one-bedroom flat.

At £30,000 for this. Over at Warrington, 30,000. 25.

25, I've got. At 25,000. Six now.

At 26. 27. 28. £28,000...

Dropping the starting price by £5,000 certainly sparked

the interest of two bidders keen to buy this property.

We rejoin the auction with the price at £35,000.

35. 500.

36.

500. 37.

500.

37. Still on my left at 37, the standing bidder.

Are we all done, then? The hammer's up at 37,500. On my right. 38.

38,500... No. 38, standing.

38,000. Are we all done? The hammer's up.

Final call. At £38,000...

Thank you very much.

Making that final bid was Adrian, who's been on the show before,

but this time he paid £38,000 on behalf of his client Mark.

Mark was looking for a better investment for his money

and enlisted Adrian's services to find and purchase

properties in the local area.

Why can't Mark do this himself? Well, since retiring from his job

as a geologist in the oil and gas industry, he lives in South Africa.

# Get your rocks off, get your rocks off, honey... #

Mark, nice to meet you. Congratulations.

-Good to meet you, Dion.

-Adrian, good to see you.

-Yes.

-Welcome back to the show, again.

-Thank you, Dion.

Mark, tell us first and foremost, why this particular property?

Well, this is the third property that I've bought

through Adrian's help in the last couple of years.

It seemed like a very good deal, especially at the price,

so here we are. I'm very happy with it.

Good man, have you done a little bit of research in the area?

It's the first time I've ever actually been in Warrington,

although I grew up in Cheadle just down the road,

so I don't know this area well at all,

but I've bought a couple of properties in Liverpool and Bootle.

So, I'm getting some familiarity with the area, certainly.

Being familiar with the area is tricky

when you live in South Africa and so Mark knew he'd have to find

someone in the UK to help him locate the right investment

properties, which is where Adrian came in, around three years ago.

# I'm just a stranger

# A stranger in this town... #

You know, sitting over there most of the year,

you don't know the area, you don't know the market, you don't...

I wouldn't be able to get a hold of a builder, or a plumber,

or a rental agent, indeed.

So, I basically tracked him down and then we spoke some time after that.

In fact, I was actually in London at that time. I've been doing

a bit of work in London, and we kind of went from there.

Over 6,000 miles separates Warrington from Mark's home

in Cape Town, but, thanks to good research,

he finally managed to track down his man.

# Whoever said a good man's hard to find... #

This is a joint investment between Mark and his mum,

who lives in Buckinghamshire, and they are more than happy to let

someone else do the research and the auction buying for them.

So, tell us about the auction situation, were you on the phone?

Tell us how that worked.

Well, I was sitting at home in Cape Town, Adrian was there

bidding on my behalf and he sent me an SMS after the fact and said,

you know, "Bought at 38,000 - bargain."

Or words to that effect, so good result all round. I was delighted.

And what was your instruction on the day, Adrian?

-We had an agreed maximum mark of 44,000.

-44 something.

-44,500.

So, it came well under that, so, delighted.

-Right on the mark and a good buy.

-Very good.

-Good work.

-Very good indeed.

-Bit of money in the budget then?

Absolutely, and in fact, I think Adrian's given me

the guideline on what he suggests we do with this.

I think there may be one or two small, additional things

that we contemplate doing which will add a very small amount

to the budget, but the budget's what?

-2,500, more or less?

-Yes, just under 2,500.

And what will you do with the budget?

Where is it going to go, Adrian?

It'll go on redecoration completely, we'll update the kitchen

slightly. We won't change it cos it's a good, modern kitchen

and we've got a good modern bathroom in place already,

so we'll just make small changes to those.

New cooker, a new fridge freezer, new flooring throughout,

we'll modernise it.

The paper's a bit dated, the curtains

and the net curtains are dated, so we'll change all that.

But basically this property already has the main ingredient,

shall I say. It has the double glazing,

it has a modern central heating system fitted,

it's well insulated, so it's a small budget. That's all it needs, really.

2,500 grand to spend, what about your turnaround time?

Two to three weeks we'll have this one done and back on the market.

-So this is a very straightforward one.

-No hanging about, Mark,

-is there?

-No, not at all. It's a relatively low budget

and it's a fairly fast turnaround time, which I think is important.

You don't want something to be sitting for two or three months

before it's actually ready for the rental market,

so, from my point of view, this is great.

-Is it the same guys you use all the time, Adrian?

-Yes, regular team.

The guys we've used for years, we can trust and we know

they're going to turn up on time and they'll be in here tomorrow

starting to strip out the flooring and the wallpaper and on we go.

So, there being a flat above this one,

is that any cause for concern at all?

No, because the lease has been drawn up properly.

It's a long lease, 999 years from 2007, so it's a really good lease.

It's very clear that we will share the cost.

The owner of this one will share the costs with upstairs 50-50.

So, even if it's the roof or guttering, in the downstairs flat,

so we know where we are,

and we know what the lease is stating, so it's very clear.

Is it only the rental market that you're looking to venture into?

It is, it is. Yeah.

I think of myself as an investor rather than a speculator

in that respect. I'm not really interested...

I mean, eventually, there'll be some capital growth, of course.

-Yeah.

-But I'm not interested in a quick turnaround, no.

Not in terms of putting it back on the market for selling, no.

When are you travelling back home?

Well, I'll be in Europe for the European summer.

Which is a weekend.

LAUGHTER

-Friday, Saturday.

-It's probably three weeks in July, yes.

My mum lives in England near Buckingham,

so I'm spending some time with her at the moment.

I'll be going over to France, I've got a little holiday place there.

So I normally spend three or four months there in the summer

and then I'll be back in England again for a month towards the end

of the year, and then back home to Cape Town probably in November.

So, will you be flitting back and forth seeing how this is getting on?

Yes, I'll be back here after the refurbishment

to see how it's looking and,

hopefully, that'll be in a short time.

-I wish you all the best.

-Thank you very much.

-Good luck to you.

-Thank you.

-Safe travels.

-Thank you.

-Adrian, good to see you again.

-Yes, you too.

-Well done, sir, well done.

-Thank you very much.

Mark has every faith in Adrian and you can see why.

He's done it again, he's got a property that needs

very little doing to it, got a small budget of £2,500,

but will he get it done within that two to three-week window?

You can find out later on in the programme.

Well, we've seen how it played out for one property,

but there's still lots more to see.

Yeah, it's been a while since we visited.

Think there will be any changes? Let's have a look.

Well, I'd say they'd be a good chance.

You never know though, here we go.

Earlier, I was in Maida Vale in London, famous for many things,

including being the birthplace of Robert Smith, front man of The Cure.

I came to look around a brick-built Art Deco style apartment,

which claimed to be a three-roomed ground-floor property.

It sold at auction for 425,000.

It's small, it's quite angular and awkward.

You've got a wall slanted there.

So, this is what it means by three rooms. Rather small bedroom there.

A ridiculously small...

I wouldn't even call it a box room because it's tiny!

It's a coat cupboard, it's a very small room.

I would never call that a bedroom, so that's a rather weird space.

The main living space was dingy

and had a very impractical kitchen arrangement.

A full scheme of renovation was called for

and I believe getting rid of the tiny second bedroom

and reutilising the space was the best plan.

MUSIC: Close To Me by The Cure

And I just think a one-bedroom flat rather than a very small compromised

two-bedroom flat would be so much better.

Taking on the product project were joint owners,

brother and sister duo, David and Lorena.

Now, Lorena was hoping to fit the work around her commitments

as a professional dancer, while David was planning on leaving

his IT career behind and going into property development full-time.

But they'd have to get the ground rules laid out first.

Do you two get on well? Are you going to have a bit of banter

-and a laugh while doing this?

-No, we hate each other.

-Are you

the bossy older brother or are you the bossy big sister?

-She's the bossy big sister.

-He's the bossy one.

-Who's in charge and who's going to set the schedule?

-I thought I was.

That was easy. You can see we're going to get on really well.

The schedule was set for two to three months

and they had a budget of 15,000.

I do hope sibling rivalry wasn't an issue in the end.

We're back seven months later to find out how they got on, or didn't.

MUSIC: What Do You Mean? by Justin Bieber

# What do you mean?

# Oh-oh-oh

# When you nod your head yes but you wanna say no

# What do you mean... #

The high-quality fittings look very appropriate

for this affluent area

and should help with the plans to sell on at a decent profit.

# Oh, what do you mean?

# I said, you're running out of time What do you mean? #

The living space was closed in with very little natural light.

Now, by opening up the wall into the tiny second bedroom

it's much brighter and airier.

# What do you mean? #

As well as opening up the lounge/kitchen space,

David removed the false chimney breast and hearth

to open the lounge further,

but not before getting a structural survey.

The full ceiling was next on the list, as it was the only way

to achieve concealed lighting with an original concrete ceiling,

which doubles up as the upstairs flat floor.

Now, the only bedroom is clear, uncluttered,

with new laminate flooring and is much more appealing.

So, for the best part of seven months working in a confined area,

how did brother and sister fair?

# Gotta make up your mind What do you mean? #

I'll tell you the truth.

We've actually got on really well.

I think it was a good thing in the end.

But you did outrun the two to three month timescale quite a bit!

That was more Lorena's timescale.

I was more three to four months, which we did go over,

but that was mostly due to not being able to get trades in,

so me having to do a lot of the jobs that I wouldn't normally do.

So what was the reasoning behind taking out the bath

and just having a shower?

I think, basically,

who would be buying this flat would be someone that's

a get up and go person,

so that's the reason why we did a shower in there.

Does anyone use baths any more?

Probably not at the cost per square foot of floor space in these parts.

What were the main problems?

Couldn't find people who wanted work in London, funnily enough.

Mm, and were those that you could find punctual?

Actually, I was the one that was always late.

I bet that went down really well,

especially as David had to travel further.

Now what about the budget?

We spent £15,200.

Our budget was 15,000, so I would say, yeah, we kept to budget.

What were the big expenses?

I think it was about £800 for the structural survey and the licences

from the managing agents were about £400, so quite a big chunk.

When it comes to making alterations, leases can differ greatly,

but, in most cases, consent is required and your landlord

may insist you obtain a formal licence to make those alterations.

You may charge a fee to cover any legal and valuation expenses.

Dancing to the landlord's tune is one thing,

but did Lorena manage to get a bit of dance practice in

whilst she was working?

Oh, yeah, all the time. My brother couldn't stand it.

That was one thing that really wound him up, me dancing

and singing in the flat while we were working.

I told her off, yeah.

She was chastised.

And can you sum up the design and decor philosophy?

Simple, modern, neutral.

Well, David's not one to beat about the bush.

So, anything learned by this process?

I've learned to cut worktops, as I couldn't get a carpenter.

I did tiling before, I've learnt how to box in.

Erm...

Looks like Lorena's got the giggles!

Let's hope she's still smiling when she hears what two local

estate agents think of all the hard work that's been done here.

First up, the agent who saw it before any work was started.

I think the property has been refurbished to

a really high standard. It's all done very nicely

and neutral colours, which is a great help.

I like the layout of the flat. I think it works very well. It flows.

I like the fact that you've got quite a lot of light

coming in from both the windows.

David and Lorena bought for 425,000 and spent,

let's say, £15,000 on refurbishment, so a total spend of 440,000.

Will they have added enough value to sell on, as intended?

On the resale market,

I believe this flat would be worth somewhere in the region of £500,000.

If the apartment was to come to the market right now,

I would advise it to come onto the market at £525,000.

525,000 would be good for sale.

-Good? That would be excellent.

-Yeah.

So it looks like this will be on the market soon.

Is refurbishment something you'd consider doing together again?

Absolutely, but I would say that I would make sure that

I look at it before I buy it.

Well, now you've got me wanting to do a jig.

# I'm in the mood for dancing... #

We're back in Cheshire now and the town of Warrington,

where I earlier visited this ground-floor one-bed flat

up for auction at a guide price of £30,000 plus.

In a quiet neighbourhood close to motorway links,

there wasn't much in here that needed improving.

Great condition, decent size, double glazed windows.

I don't think it's too bad at all.

-AUCTIONEER:

-Thank you very much.

It was purchased at auction by property agent Adrian for 38,000.

Adrian was buying on behalf of his South African-based client,

Mark, who wanted to add this to his growing number

of rental properties in the northwest.

Well, I was sitting at home in Cape Town. Adrian was there bidding

on my behalf and he sent me an SMS after the fact and said,

"Bought it at 38,000 - bargain," or words to that effect,

so a good result all round. I was delighted.

Adrian's property team were set to begin work the very next day.

And with a timescale of three weeks and a budget of £2,500,

this project looked as straightforward as, well...

# A-B-C

# Easy as 1-2-3... #

To see if everything's gone to plan, we've come back five weeks later

to take a look around Mark's refurbished flat.

Well, it's not just the sunny weather that's made a difference.

All that was required in here was a freshen up, but Adrian and his team

have done a brilliant job.

Today is the first time Mark has seen the finished property

and I'm keen to hear what he thinks.

It didn't look too bad when we first bought the property

but the guys have been in here for about three weeks

and they've done a really nice job of painting and the flooring,

and they've made a really nice job, overall.

The flat is looking better,

but what work was carried out to take it up a notch?

Basically, we've redecorated throughout,

walls, ceilings, woodwork.

We've replaced the kitchen worktops, retiled the kitchen, the bathroom,

new flooring down where required,

a new shower screen, refreshed the bathroom, new window blinds,

jet washed the outside, really spruced it up

and bring it a nice and modern look for the tenants.

The work has been completed within the three-week timeframe,

but how has the budget held up?

The budget we had was £2,500 and we have actually come in slightly

under, just £50 under, at £2,450, so very pleased with the outcome.

The refurbishment has run like clockwork.

But there is one thing that casts a shadow over this project.

The biggest problem with this property is the presence

of this very large tree right outside the living room window,

and, in fact, the tree's actually giving potential major problems

with drainage and certainly these paving stones are raising up

already, so we are going to remove this tree as soon as possible.

There's been a bit of an issue trying to contact the freeholder.

The neighbours upstairs have agreed

that it's a good idea that it should go.

# Going back to my roots

# Yeah... #

Tree roots are a property pain, but getting rid of one with

a large root system can also cause problems, so best to get

a qualified and insured tree surgeon to do the job for you.

# Zippin' up my boots... #

Getting someone else to do it seems to have worked for Mark

when it comes to increasing his property portfolio.

This has been a very good experience in terms of the ease

of purchasing at the auction, and the fact that Adrian's team

just walks in and does all the work is great from my perspective.

I've actually bought two more properties subsequent

to that auction, so, you know, erm...

It's going very well.

# A-B-C... #

This project may have been as easy as A-B-C for Mark and Adrian,

but have their sums been as good as their letters?

We've asked two local estate agents to come around,

assess the work, and get their calculators out.

Well, it's an attractive one-bedroom converted flat.

The standard of finish in the apartment is to a good standard,

and particularly the kitchen and bathroom

I think have been done well.

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

It's a great apartment, nice area and very good finish.

And certainly very appropriate for first-time buyers

looking to move into the area.

As Mark has bought this as a buy-to-let investment,

let's get some rental valuations.

I feel, in the rental market, this apartment would make

in the region of £375-£400 per calendar month.

In my opinion, this property will rent for a figure

of £380 per calendar month.

A monthly rental of £380 would earn Mark a yield of just over 11%,

but what about the resale values?

Could there be a quick profit on Mark's total investment of £40,450?

If we were to put this property onto the market,

I would expect to achieve a figure in the region of £60,000.

In the sales market, this property should achieve

in the region of £50,000.

Well, I think those valuations are very good.

Obviously, I like the higher number more than the lower number,

but I think that even at £50,000,

that represents a not-unreasonable capital growth.

I think this property altogether will cost about 44,000,

including all of the fees and the legal costs,

so if we're looking at some equity already, I think that's very good.

But 60,000 would be excellent.

So, things look promising for this property,

but what does Mark have planned for the future?

I've now got six properties in total,

so it might be time to take a bit of a back step, or a step backwards,

and just see how they go over the next few months,

but it's always tempting to go back to the auction room,

especially when there's some good bargains coming up.

Well, as you can see, this property developing lark

is not necessarily easy.

We've seen the ups, oh, but we've seen the downs.

And there's plenty more buyers getting ready to get stuck in.

Come and meet some more next time on Homes Under The Hammer.

-Goodbye.

-Goodbye.

-Goodbye.