Episode 36 Homes Under the Hammer

Hello there. Whether you're a seasoned pro or absolute beginner,

your local property auction might have just what you're looking for.

Yes, but unexpected problems can catch you out

even if you are experienced.

Yeah, and how you deal with those problems

can be the difference of making money or losing money

when you buy your property under the hammer.

Well, property auctions throw up all sorts,

from tired terraces to sublime semis.

Yep. The options are vast and varied and so are the opportunities.

Yeah, so what's on offer on today's show?

In the railway town of Crewe in Cheshire,

I really do mind the doors.

Look at that door!

(I think we'll replace that with something else.)

Whereas in Sittingbourne, Kent,

there's plenty ROUND ABOUT this property.

Look, right in the middle of town!

And I see a house in the Lake District

that's ready for a fresh start.

You can actually put your own stamp on it

and make it into a lovely family home.

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.

You bought it, sir. Well done.

Crewe in Cheshire was a 19th-century railway powerhouse

and is still today a major rail junction.

It also has a good selection of shops, bars

and a recently renovated public park

that I'm sure makes many people happy to live in Crewe.

# Time out

# Feelin' all right with the crew... #

Well, I'm in a really lovely, leafy, suburb very close to the town centre

to see a three-bedroom semidetached.

Guide price - ?59,000.

Straight away, you look at that and you think,

"In other parts of the country, how much is that going to set you back?"

You've got off-street parking,

looks like it's in reasonable condition,

can't go wrong really, can you?

'I know, I know. Famous last words.

'So let's follow the Homes Under The Hammer rules

'and take a look inside and see what we've got.'

Well, through a really tiny little porch -

that's actually very cute - into the main part of the house,

and I'm expecting a fairly traditional layout.

But a nice feeling the moment you walk through the door.

It doesn't smell damp, it looks a little bit dated

but, you know, in terms of the layout,

it's sort of what you expect and that is quite comforting.

There's a large, sort of, entrance area here,

stairs up to your bedrooms, you're facing the kitchen

down that little corridor and then into your lounge.

You know, again, yes,

it's obviously been someone's home relatively recently.

So, lots of bits and pieces left around

but you can tell it's been, well, you know, a loved house, actually.

Um... Fire there, looks like some solid fuel sort of stove thing.

So we need to check out what the situation is

regarding central heating, cos I can't see any radiators,

although there's a little electric fire there.

But there's this archway through to the sitting room.

So, as I was saying, very standard layout.

Definitely crying out for a set of patio doors at the end there.

That would be brilliant. And yet more archways.

This is definitely arch-tastic, that's for sure.

And also polystyrene-tastic, as well, which isn't so good.

We've got polystyrene ceiling tiles -

they've got to come down, they're a definite fire hazard.

Got polystyrene or something similar on the walls.

It just fits into that whole thing of this place

being little bit dated. And then through to the kitchen.

Well, you know, it's not a bad space. Again, it's a bit tired,

it's a bit dated but you've got stuff to play with.

You've then start thinking, "What would you do doing here?"

Open-plan living is definitely we're at right now.

So maybe think about taking down some of these walls

and make sure you put some supporting beams across the top,

but maybe take out that archway, open the whole thing up,

then you've got a really nice space

but what you've got to play with here

is just a really pleasant feeling home.

The heating situation does need investigating.

I'm assuming the stove is heating the hot water

with a back burner to heat the radiators in the hall.

That's not ideal,

and the electric hob tells me we're not cooking with gas.

# Life's a gas

# I hope it's going to last... #

Now I don't see a gas meter either, so you'd need to sort out a supply

with the gas distribution network and get the meter

and pipes installed. Getting connected could cost a bit of money.

# Life's a gas. #

So upstairs and a very traditional layout.

We've got a little landing area here,

the three bedrooms and the bathroom head off it.

I mean, again, when you come up here the whole thing

just feels a little bit dated but the basics are really, really good.

We've got a nice-sized bathroom there and then the bedrooms, yeah.

A smaller one there but two good-sized doubles.

So it just adds to that whole feeling

that this is a really, really solid family house.

There really are some amazing throwbacks

to the '60s or '70s, aren't there?

Look at that door!

(I think we'll replace that with something else.)

No, those doors don't offer the best privacy.

But the garden certainly does.

Well at the back of the property, a real find.

My kind of garden, for sure.

Lots of pants in planters and just in general all sort of things here.

Cost you a fortune to buy these at a garden centre.

And then, my second favourite thing, lots and lots of little buildings.

Outbuildings! There's an outbuilding there to put stuff in.

There's something on the way out there. There's a toilet.

There's a greenhouse.

Behind that, believe it or not, there's a shed. It's brilliant!

You could almost think you're at some villa in France, actually.

It's great.

Tres bien, indeed. In fact you could even say it's Nice...

..nice. Sorry.

But does an agent from the auction house that sold this property

think this house is a good buy

or will you have too much "Toulouse" by taking it on?

(Ugh, that was really...)

Yeah, it's very dated,

but you can tell it's been looked after over the years.

Obviously needs a lot of work

with the polystyrene tiles on the ceiling

and it's probably a rewire, central heating system.

You know, somebody coming into the property would need to spend

in the region of about 10,000 to 15,000 to get it up to standard.

It's a lot of house for that ?59,000 guide,

what kind of return could you hope to achieve here?

Once the property's been modernised, from a rental point of view,

it should be achieving around ?525 per calendar month.

On the sales market,

the property would achieve around ?105,000 to ?110,000.

Well, this clearly has been a much-loved house

and it is instantly appealing.

It doesn't need too much to bring it bang up-to-date.

Possibly the whole central heating issue

but other than that, yeah, a great auction find.

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

It's a three-bed semidetached house. Lounge, dining room, breakfast,

kitchen, driveway and a back garden. Lot Number 12.

55 to get it going.

55 bid, thank you. At 55. 56, can I see you now?

56 in the aisle. At 56. 57? 58.

59. 60?

At 60,000. The bid's in the aisle at 60,000.

61, took it there, seen you. 62. 62.

63, 63. 64.

65, 66, 67, 68, 69, 70, 71.

No. 71. In at 72, 72.

73? No.

72 with you, madam. 72. Over there at 73.

No? 73 against the side wall. Your bid, madam, at 73.

74 anywhere else?

If not, ?73,000 for the first time,

?73,000 for the second time,

third and final time, ?73,000, pointing at her now, no mistakes.

GAVEL BANGS

You bought it, madam. Well done.

Right at the back of the room with the winning bid of 73,000

were Sue and Mick.

The couple already have a few other rental properties

and hope they've got another success here to add to their portfolio.

Sue, Mick. Great to meet you both. Thank you. Pleasure to meet you.

Nice to meet you as well. Congratulations. Yes.

So why this particular house then?

We looked at all the auction properties

and some were out of reach

but this one we thought we'd a good chance of getting it and...

It is a nice size, isn't it? Quite spacious rooms, really.

And little garden front and back.

You can park off the road as well, so that was nice.

It's got a lot going for it. Yeah.

Obviously needs a bit of updating, though, doesn't it?

It does, yeah. Yes, just a bit.

Well, it's obviously been a well-loved house.

Yes, that's what we thought. It's got some character,

but you've got to just update it a bit. Exactly.

Tell me what you're going to do to it?

Go on now, I'll let you. Well... You're in charge of the project?

Yes! Well, I don't know, really. It's a joint effort, really.

There's polystyrene tiles on the ceiling,

so we'll start with taking those off, won't we? Yes. Good.

Think it needs rewiring, doesn't it? Yeah. Re-plumbed.

So a new bathroom, new kitchen.

There's no gas central heating here but we have looked into it.

We've been in touch and there's some live gas in the area,

we just need to get it connected here. OK.

And then perhaps have gas central heating put in.

But keep the layout pretty much the same?

Are you keeping in the archways? We think so.

Well, we're thinking about those and it's divided opinion, let's say,

so we don't know if you have any thoughts on it yourself...

Oh, well, you know, some people like it, some people don't.

I mean, the more you can take out the better as far as I'm concerned.

Open-plan! Do open-plan! Knock all the walls down. Oh, no!

As long as they're not supporting walls. Yes.

Well, I'm certainly looking forward

to seeing what they do with the layout in the end.

But the changes there will be tied into

how much they have to spend on the property.

So you paid 73 at the auction for it. Any idea of your budget?

Yeah, we're hoping to get it done

within about ?20,000, really, aren't we? Oh, OK.

If you're putting in new central heating,

that's going to swallow up quite a big chunk, isn't it? Yeah.

So what's the timescale?

We're hoping to try and get it completed in about six months. OK.

But you never know what sort of hidden snags will crop up,

do you, really?

Maximum nine months. Yeah. OK. So a realistic timescale as well.

So what about you two? How long have you known each other for? Ooh!

40-odd years, I think. Many years!

Have you been married all that time? No, we're not married, you know.

OK, whatever. That's the next project, actually.

Never got around to it.

We were at Macclesfield College and there was a college disco

and we met there.

And Mick wrote my phone number on a ten-shilling note.

On a ten-shilling note, right. Shows you how long ago it is. Right.

So we were together for some years then, maybe ten years.

We drifted apart really, didn't we? Because of our careers.

And got back together sort of... In fact, 20 years apart.

Yes, we had 20 years and didn't see...

20 years apart? And how recently did you get together then, again?

Was it maybe 14 years or something? Wow. Yes. So ten years together.

Following his romantic gesture on the back of a ten-bob note.

That is brilliant. Then 20 years apart. Then 14 years back together.

I know. Wow. And are you going to get married sometime?

Well, we hope to, really, yes. Yes, that's the plan, isn't it?

Sometime in the future. When we get round to it.

Mick says he deserves another 20 years off now, you know.

I think Mick looks pretty happy where he is, Sue.

I'm a big softie for a romantic story.

I've taken even more of a shine to them

given that they've done all their homework.

Researching the location - yep.

Viewings - several. Legal pack - tick!

Anyone would think they'd been paying attention

to a certain TV programme.

Our friends say we've got the HUTH bug -

the Homes Under The Hammer bug.

cos we're addicted. We watch it all the time.

Oh, well, that's good to hear.

Have we been responsible for your passion in property?

Well, we're blaming you. Yes, yes. You can take the credit.

When it does well, send me a thank you card.

I will do, yes. "Living here's bad and I've left the country." Yes!

You sound like perfect Homes Under The Hammer students, actually.

Read the legal pack, you visited the property loads of times

you haven't overstretched yourself, you've got a realistic budget.

That's brilliant.

We didn't want you to catch us out but we'll see in the end.

I bet we'll go over the budget, but I hope not.

Didn't want me to catch you out! That's funny.

Well, listen, really lovely to meet you both. Congratulations.

Thank you, pleasure to meet you, thank you. Thanks.

I look forward to seeing how you get on. Thanks for your tips.

Well, how gratifying to hear Sue and Mick

following all the Homes Under The Hammer golden rules.

Take a lesson out of their book and, look,

they've got a really nice house here and an interesting project.

Can't wait to see how they get on.

You can find out later in the show.

We're in Sittingbourne in Kent, about eight miles from Gillingham,

and about an hour by train into Central London.

We always say on the show that it's great to buy

in a location where there's a lot of investment plans for the area.

Now, here in Sittingbourne,

a huge, multimillion-pound regeneration project

is about to start.

There are plans for a multiplex cinema, restaurants,

new car parks and a traffic system.

So, generally, the centre of Sittingbourne

is set to be transformed,

which can only be great news if you're buying property here.

And the property I'm here to see is right in the heart of it all.

# Stuck in the middle Stuck in the middle... #

And when I say, "It's in the middle of town,"

I mean slap, bang, boom! Look - right in the middle of town!

We're on this roundabout here,

very close to the railway station, in a prominent position.

Now the property used to be offices for an electrical company

and it went auction with a guide price of ?140,000 to ?150,000.

And what a lovely house.

It stands so proud. It's gorgeous.

# I'm stuck in the middle... #

BEEP

Ooh! That's a bit annoying. And loud. A little beep!

BEEP

We'd have to sort that out for starters.

OK, so first in, well,

there's none of the character that's on the exterior.

It's as you would expect from a commercial building.

Magnolia walls, hard-wearing carpet, strip lighting and, through here,

I think this was probably a reception area of some sort

and again look, you've got big old strip lighting up there.

This is where you would have walked in and gone,

"Morning. Can I help you?"

# We need to talk Need to talk

# Step into my office, baby... #

Actually, I think it's this property that needs the help.

Along with the hall and reception,

there's a small office to the right of the entrance,

then, towards the rear...

Well, it all gets a little bit cluttered.

Well, it looks like the rest of the ground floor

is being used as a furniture store. Gosh, look.

There's beds and frames and sofas everywhere -

stacked up against the walls.

But if you ignore the piles of stuff and you see beyond that,

well, it's almost a rather large open-plan space in here.

And it goes right the way through there and beyond.

Stairs at the back lead up and down to other floors.

Go down and there's a basement -

it's a bit of a warren of small rooms

which are being used for storage.

There are no windows, but at least it seems pretty sound and dry.

It's only when you get up to the clear and empty first-floor

that you can get a real sense

of how much square footage this property offers.

So what could you do with this property?

Well, you could keep it as offices

or you could apply for Change Of Use for another business.

Maybe a restaurant could work downstairs

because you're so close to the train station. Look.

You're in such a prominent position.

Or there's yet another option.

Maybe you could convert this into residential use.

Now I think flats would work best here.

Maybe two, maybe four. Maybe more.

Since 2013, it has been permissible to convert some offices

into residential using the permitted development rights.

But there are still some exemptions in force,

so you should always check with the local planning officer

before ploughing your cash in here.

What does a local estate agent make of the potential

of this interesting lot, guided at 140,000 to 150,000?

Because of the square footage of it, I think it you could probably

convert this into four reasonable-sized flats

if someone put their mind to it

and, you know, went down the planning route correctly.

Personally, I don't think there's a great need or a great demand

for commercial where this is situated, right by the station.

I think it's much better as residential.

So, the agent's keen on the idea of converting it

into residential properties,

but what kind of rental value could one-bed flats generate?

It's ideal for a rental. There's a lot of rental round here.

And I would have thought, for a one-bedroom flat in this area,

being so close to the station, you'd probably be around the 650,

?650 a month mark.

What about the sales value of one-bedroom flats?

Due to the location of the property,

I would say that you could probably achieve about ?135,000.

I absolutely love a property

that offers so many different options for redevelopment.

Now this building, it could stay as offices,

it could become a different business altogether,

such as a restaurant or a retail outlet.

Or could it be converted into residential use flats?

What will the new owner pick?

Let's find out who bought it when it went to auction.

Good-looking detached building right in the town centre.

Obvious potential for different uses, subject to planning.

So, where will you start me? 140, 150 is the guide.

Is there a bid of 140 to start me? ?140,000?

Give me 130 then. 130 to start. ?130,000.

130, in at the back. 130, I'm on the way.

130, and 2?

132, I have. 135 if you like. You were just behind 132.

135? 135.

138? 138. 140, and 2.

142 at the back. And 4.

144, keep with it.

144?

144. And 6. 146.

There was some real auction tension

as two very determined sets of bidders chased the lot.

We rejoin when we've soared way past that top guide price of ?150,000

to ?174,000.

At 174, it's with you, standing at the back now.

176 is against you in the front. 175? 175 - I can read your mind.

175, 176?

176? 176. 177?

177. And 8? 178.

Why not make it 180? Get there first. 180.

180.

At ?178,000, standing at the back.

At 178 standing at the back for the first time.

For the second time at 178.

If you're sure you're done, third and final time, ?178,000.

Sold to the back at ?178,000 and that's G664.

The successful winning bid of 178,000

was made by full-time property developer Sunil,

and we've featured Sunil on the show a couple of times before.

Last time, in December 2013, Sunil and his wife, Gita,

bought an old pub, also in Sittingbourne,

which they converted into flats.

So, here we go again.

# Can I come back for more?

# Can I come back for more? #

Sunil, congratulations. Thank you so much.

This is the third time we've met,

but you've not got lovely Gita, your wife, with you today.

No, unfortunately, she's got the property bug.

But she's also unwell, so she's not been able to make it today.

So she's got the property bug and she's also got a bug. Yes.

Oh, my gosh. Well, look, tell me the story.

Why have you ended up buying this?

This is right on the doorstep of the new development

and the regeneration that's going on in Sittingbourne. Yeah.

And it's five minutes' walk from our offices,

so it made sense to go to the auction and look and buy.

Do you feel you got this for a good price on auction day?

On auction day, I always have after-auction regrets.

Do you feel you might have got a little bit carried away

and paid a little bit too much? Oh, definitely.

Really? Yeah.

But looking back in a very short period of time, I think, you know,

if the generation does happen and everything does take place,

I think it'll be good.

So, even an experienced property developer like Sunil

can get auction fever, but he's got it now.

So what are his plans for it?

Because of the regeneration,

we've made a pre-application to the council

and asked them, what would they like to see here?

To see if we can somehow fit in with the plans,

which will make our planning process easier later.

That's a really sensible, savvy thing to do.

My architect said, "You know, maybe if we put a plan in,

"it might get refused, because of the regeneration."

And that takes so much of your time. And money, of course.

So they decided that, you know, "Let's do a pre-application.

"Maybe they can come up with some ideas of what they would like

"to see happening with this particular building."

Of course, all that regeneration planning

and negotiation could take time.

While Sunil waits on the planning guidance,

he's got a short-term plan to make this property pay.

The first opportunity that we saw

was that there's going to be a lot of builders in the area,

coming out from other areas because of the regeneration,

and they're going to need accommodation

whilst they're working, rather than travelling each day.

So, we've divided the property into ten rooms,

which were previously offices.

with shared bathrooms and shower rooms, et cetera.

So that's the first opportunity to get some income coming in.

So, it'll be more like an HMO? Yes, definitely.

For the time being? Yes.

So stage one is to turn the property

into a house of multiple occupancy, or HMO.

Sunil hopes this will take two months.

His long-term plan - depending on the council's advice -

is to turn the ground floor into a commercial unit

and the first floor into two high-end flats.

Phew!

So lots of plans and ideas, but will it all be worthwhile?

So, how much you think you're going to have to cough up

to get it to this stage? I mean, you've got to put two kitchens in,

four, three bathrooms, a couple of showers.

Yeah, between 15,000 and 25,000,

in order to get everything up to standard.

So you think it's worth spending 15 to 20 grand for the time being?

I mean, you'll easily make that, won't you? Definitely, yes.

If they're here in the area for two, three years,

they're going to need accommodation.

So, you could leave it like this for two, three years,

while you've got your plans in motion... Yes.

..for ultimate scheme, which is what you want to do. Yes, yes.

I mean, how much can you rent one of these for?

The total income, it's...

Well, we're looking at ?400 per month, per room.

So it's ?4,000, anticipated income.

A month? Yes. That's fantastic. Yeah.

Sunil, congratulations.

I am sure we're going to meet each other again soon.

But well done, and good luck with the scheme. Thank you so much.

As always, Sunil is being very savvy

when it comes to maximising the potential of this property.

Stage one, he hopes, will be an HMO,

with ten letting rooms cashing in on the redevelopment in the area.

But will he get the permission he needs?

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

Coming up in the Lake District,

I see a house that starts off pretty well, but how will it finish?

Down here, I'm quite happy.

It's got a lot of potential.

And I return to Sittingbourne in Kent,

to find out what Sunil and Gita made of their old office block.

Everything's finished now, so we're quite pleased.

But, first, it's off to Crewe in Cheshire.

It was here that we saw a three-bedroom semidetached house.

This was a property in good order, with a large, well-stocked garden

and nicely proportioned rooms, although somewhat dated.

Downstairs was distinguished by one common feature.

More archways.

This is definitely arch-tastic, that's for sure.

# Underneath the arches

# I dream my dreams away... #

And the people hoping this was their dream and investment

were long-term partners Sue and Mick,

who bought it at auction for ?73,000.

It obviously needs a bit of updating, though, doesn't it?

It does, yeah. It's a shame. Yes, just a bit.

Well, it's obviously been a well-loved house.

Yeah, that's what we thought. It's got some character,

but you got to just update it a bit. Yes. Exactly.

Keep the layout pretty much the same, are you keeping the archways?

We think so. Well, we're thinking about those

and it's divided opinion, let's say.

So, I don't know if you have any thoughts on it yourself or...?

Well, you know, some people like them.

I mean, the more it you can take out the better, as far as I'm concerned.

Open-plan! Do open-plan. Yes.

My over-ARCHING feeling it a lot of refurbishment is to open places up

and get more light in, but it was obviously up to Sue and Mick

how they spent their proposed ?20,000 budget.

With both of them in full-time jobs,

this was going to be an evening and weekend project.

So they'd given themselves six to nine months to complete it

and get it ready for the rental market.

Well, now, eight months later, we're back to check on progress.

Well, that's much more practical out front.

There's now off-road parking for two cars.

While, inside...

Yeah, the kitchen is revamped, clean and ready to go.

But it's that large through lounge I'm most intrigued about.

Did they keep those arches?

In this particular room, we've re-plastered all the room.

We've put the LED lights in the ceiling.

We taken the old fireplace out and replaced it with an electric fire.

The laminate floor we've put all the way through the building.

And opened this room into the garden more with the French doors.

Well, I have to concede, even with the arches still in place,

the room still seems much lighter and brighter.

With new central heating fitted, it should also be so much warmer.

Upstairs, the three bedrooms are also crisp, clean and bright.

Thankfully, those polystyrene tiles are a thing of the past.

But what about the bathroom?

Well, the bathroom, it was OK, but it needed to be updated,

didn't it, that bathroom? We thought,

"Well, I wonder if we could reconfigure the room?"

It would be great if we could fit a bath

and a separate shower compartment in, shower cubicle. Yes.

With some juggling around, really, it has managed all fit in.

That's worked really well and doesn't look crammed in at all.

With shower and bath, you've got the best of both worlds.

So the house is now looking spick and span.

Good job, guys. But what about that garden?

Well, we loved the garden at first.

It was a lovely country garden, wasn't it?

But it's not practical for what we are planning,

really, for this house. I think we're moving towards renting it out.

So, what we decided in the end, just to open up the area,

so you can sit out and have a cup of tea or a barbecue

or a glass of wine, can't you?

Well, I'm always sorry to see green spaces go.

Even in this case, it's the practical head ruling.

Gardens do need maintenance and unless you have

green-fingered tenants that are keen to look after it,

you're better off thinking of a practical solution.

But how have Sue and Mick got on,

while working on all the different aspects of the house?

I've found it OK, have you? Yes.

Yeah, it's been OK. Yeah.

I've enjoyed every minute. Sue's really helped a lot, so, yeah.

Is that the right thing? Ahh, no.

We do work all right together, don't we? It's fine. Yes, we do actually.

We decide what's best and then go along with Sue's idea.

He's got it right there. You see, you can't go wrong, can you then?

Well, Mick might know who's boss,

and he found himself delegated into doing the heavy work,

while Sue was in charge of decorating.

They did have professional tradesmen in where necessary.

And though there are really few jobs still to finish off inside,

and they want to tarmac the drive, the house is nearly finished.

So, how has that ?20,000 budget fared?

All in all, we've spent around ?25,000 altogether, haven't we now?

Mm. And that's included, obviously, the costs -

you know, solicitor and auction fees, et cetera.

So, 25,000 finally.

A ?25,000 budget on top of their ?73,000 purchase price

takes their total costs to 98,000.

I think that, for that money,

they've got a pretty impressive house.

But what do two local property experts think?

I think the standard of finish is not bad.

It is light and bright and it is what young couples are looking for.

I think the standard of the finish is OK.

The bathroom has been done and that's nice.

It's got a separate shower and a bath, which is always good.

The kitchen's decent.

It's double glazed and central heated,

and it's also got a nice-sized garden and a driveway.

So it's an ideal home.

OK, time to talk money.

Mick and Sue are planning to let the house out,

but with ?98,000 invested here currently,

could they see some return on the resale market?

If I was going to do this property on the market for sale,

I'd look to market it at ?115,000.

I think if this property came onto the open market,

we'd be looking at a sale value within the region

of ?105,000 to ?110,000.

That's exactly what we thought, isn't it? Yeah.

It's been worth doing. Yeah. So, yeah, we're pleased with that.

Although I think we'll probably still go for the rental for now.

Yeah. But it's handy to know what we could get if needs be, isn't it?

That's true. Yeah, yeah. Yeah.

So a pre-tax profit of between 7,000 and 17,000 might be on offer,

but what about that all-important rental figure?

If it were on the market for rent,

then probably about 575 per calendar month.

If the property came onto the rental market, I'd certainly envisage this

making around about ?525 to ?550 per calendar month.

Well, that's fair enough. That's about what we thought,

isn't it, really? Yeah, yeah. We have got someone interested

and that's the sort of figure we'd mentioned.

He's coming to have a look around this weekend, isn't he?

So, hopefully, he'll be pleased and sign up and be a good tenant for us.

And if they do get the tenant in at around ?550 per calendar month,

it would be seeing a nice annual yield of just below 7%.

And now that the house is nearly finished,

is their next project to finally tie the knot

on their 40-year relationship?

Well, we still... We definitely plan to get married, don't we?

Yes, yeah. It's not changed, has it?

We'll get the house out of the way, rented and then...

Either this year or next year, we think, really, don't we? Yeah.

Watch this space.

Penrith is a pretty market town in the County of Cumbria.

It lies less than three miles from the Lake District National Park

and I've got my eye on some of the town's older housing stock.

This post-war local authority housing scheme

is still doing what it was designed to do -

providing a great standard of living for those who actually live here.

Here's our house.

It's got three bedrooms and a guide price of ?80,000.

Plus, I think that's a lot of house for the money.

And it's just a short drive from the M6.

So, let's get in and see what it's got to offer.

# Some of us were meant to last... #

OK, so, we are in off the front garden into a nice, long hallway.

There's your stairs going up to the bedrooms.

And here, we've got the front sort of lounge/living area.

It's a good-sized room. Real fireplace as well.

I wonder what it's like in the kitchen.

Right, into the kitchen/sort-of-dining area.

It is a nice-sized room.

In here, a lean-to, which I'm pretty sure has passed no building regs.

Looks a little bit shabby and definitely has to come down.

But, beyond that, you've got a really nice-sized back garden.

So, all in all, down here, I'm quite happy.

It's got a lot of potential.

Well, the main structure of the house might have been built to last,

but this lean-to definitely wasn't.

It might have been once upon a time, but now it really has to go.

# I've had it

# Well, I've had it... #

There's also a more substantial outhouse,

which, like the rest of the property,

is currently full of stuff.

It could make a useful storage area, though.

I also think there could be some merit in replacing the lean-to

with a conservatory or you could at least open up the kitchen-diner

with some patio doors to make the most of the good-sized garden

and the fabulous views, when the weather isn't so miserable.

There are a couple of really good points here.

The house already central heating and double glazing,

add to that a newish front door so those basics which can

sometimes be expensive to sort have been done and dusted.

Up to the three bedrooms and your family bathroom which is

a good sized space.

You would have to put a brand-new suite in there but once

you'd done that, that would be basically it.

Three bedrooms, two large bedrooms,

and just here more of a box bedroom to the front of the house.

This project does need a lot of work but while you are doing that work,

you can put your own stamp on it and make it into a lovely family home.

I do like houses that are structurally solid and have

a decent layout.

OK, it really needs to be stripped back to the bare bones but

you do have a blank canvas here.

# That's why I'm leaving it up to you

# You decide what you're gonna do... #

But once it has been given that love and attention,

is there anything else worth doing that and add value?

What does the auctioneer who sold it think?

I think it may be worth going into some of the outhouses but you

have to be careful with how much you spend.

You don't want to be the most expensive property in the street.

You want to be in the middle somewhere

so be careful about the cost of conversion or refurbishment

or extending and what the gross development value is.

So there is a definite ceiling price in this area, so could this

house that was guided at ?80,000 plus have much uplift in value?

If this property was refurbished to a good standard, if it was exposed

to the sales market, it would achieve in the region of ?150,000.

And what about its rental potential?

There is a strong rental market at the moment in Penrith and I

think if this property was done to a good standard,

it would attract a rate of definitely ?550 per calendar month,

you might even get a little bit more.

Let's not gloss over the fact this house needs

a lot of work doing but it is a good size and it is in a great location.

So, it should create a lot of interest.

Let's see if that was the case when it went under the hammer.

OK, lot number 13. Lucky for some. Penrith.

A mid-terraced three-bedroom house, gas central heating,

PVC double glazing in need of some improvement.

80 is your guide on this one. 80. At ?80,000.

82. 84. 84, bid.

86. 88. 90. 90, I am bid.

The Penrith property was popular and we rejoin the bidding at ?110,000.

110. 112. 111.

112 on the phone. 113.

113, I am bid. 114.

114, bid. 115.

Thinking about it. At ?114,000 against you and the proxy.

The proxy is out. With you, sir. On the phone at ?114,000.

For the first time. And the second time. All done? Selling away.

On the phone, well done.

So, the hammer fell at ?114,000 and the successful bidder at the

other end of the phone was Howard.

Howard is based a couple of hours away in York and has been

a property developer for many a long year.

# Cos I'm free to do what I want

# To be what I want, any old time... #

Howard, nice to meet you, sir. Congratulations. Thank you very much.

What was it about this house that made you buy it?

Well, Penrith is a great place.

It is a nice town, it has lots of independent shops around it.

The house itself has got well proportioned rooms,

three bedrooms, great views out to the garden

so hopefully it is the right house,

in the right place, and with a bit of luck at the right price.

Are you happy with the price he paid? Yeah,

I would have gone another thousand pounds on it but that was about it.

Is this the kind of project you look for, are these the kind of houses?

Yeah, it is something with a fairly quick turnaround.

Howard has worked as a property developer for over 20 years now

so this house was right up his street.

What are his plans for it?

It is a shade more than cosmetic.

It needs a new kitchen, new bathroom, redecorate throughout.

It might need replastering throughout.

But hopefully that is about it.

Are you keeping the same configuration and layout?

Yeah, I think so. It would be nice if

we could get a small cloakroom in here somewhere,

a separate WC and wash hand basin that just looking at the layout,

I don't think we will have room to do that.

What about your budget for all that work?

I am hoping to bring it in between eight and ?10,000.

That is tight. Yes.

A lot of the money is going on electrics and plastering but

the amount of stuff to clear away is incredible.

There was an extension at the back which needs demolishing.

That needs all the rubbish clearing away from that.

We will loosely call it an extension, shall we? Yes.

It may blow away before we come to demolish at!

So, that might take a lot of your time up clearing what is all

ready here. Yes. Possibly.

I'm hoping we will get the whole lot done in ten to 12 weeks.

It is just weather dependent, really.

A lot of the guys working here are coming over the A66

and the weather is bad. OK, eight to ten grand.

Ten to 12 weeks.

Who is going to do the work for you, will you do it yourself?

I do some myself if it requires no skill than I tend to do it!

Don't put yourself down! Seriously,

no, I do sweeping up and the demolition but I have guys I've been

working with for a long time now - joiners, electricians, plumbers.

They will be coming along and do their bit.

Once the builders have done their stuff, Howard hopes to sell the house on.

If he doesn't think there is enough profit in the resell,

he will add it to his growing portfolio.

Howard, what is it about the property world and buildings

that you love?

Well, when I left school I studied architecture at

Canterbury and then I went to work for various architectural

practices around Harrogate.

I was lucky enough when I got to 24, 25,

I built my first house and then it went on from there.

It was easier in those days. I wouldn't like to be doing that these days.

So, it's not just a job to you, then.

It's a passion, something I really enjoy.

I have been doing it all my working life.

And it is still there? Absolutely. Oh, yeah.

Will you continue buying properties?

Yeah, we have done around 50 so far.

Really? Yeah, yeah. Keep doing it, hopefully. That is the plan.

Good on you. I wish all the best, sir.

I don't think this is going to be a problem for you. I hope not, no.

Good luck. All the best, Howard. Take care. Thank you.

Howard has property in his blood, he has been doing it for 20 years.

So this project should be a walk in the park.

The only question I have is will the rent or will he sell?

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

We've seen how one of our buyers got on but what about the other two?

Have they been triumphant or have they just toiled?

We won't leave you hanging any longer. Let's find out.

It was Sittingbourne in Kent, slap bang in the middle of an area

of regeneration, and with good rail and road links almost literally

on its doorstep, where we first saw a large brick building.

Once a huge townhouse,

the building had been converted into a rather mundane office inside.

This is where you would have walked in and gone, "Morning,

"can I help you?"

Once past that smiling receptionist,

it was a warren of varying sized rooms.

But clearly with so much space,

it could be so much more and offered a range of possibilities.

From grand residential home to apartments or flats

and it was bought at auction by experienced property developer Sunil

for ?178,000.

So, do you feel you got this for a good price on auction day?

On auction day, I always have after auction regrets.

Do you feel you might have got a little carried away and paid a bit too much?

Oh, definitely. Really? Yeah.

# Regret, regret, if you never did it... #

Regretful or not, he had bought the property and together with his

wife Gita they had come up with a plan to make this investment work.

What is it going to be?

The first opportunity we saw was there will be lots of builders in

the area because of the regeneration and they will need

accommodation so we've divided the property into ten rooms which

were previously offices, with shared bathrooms and shower rooms.

The idea was that this would be a short-term solution while planning

was sought for a conversion into a mixture of office space and flats.

They hoped to convert it into a house of multiple occupancy or HMO,

on a budget of ?15-?20,000 and a timescale of two months.

Now, 13 months later, we're back.

Well, judging by the outside, some work has been carried out.

Let's hope the inside doesn't disappoint.

Right, well, I wasn't expecting that.

A corner kitchen in the room,

and a separate shower area

and also a separate bedroom.

OK, Sunil and Gita, what's going on?

We did look at HMO situations but when we looked

at the actual figures, and the bills we would have to pay on an HMO,

we decided to go for individual apartments.

Yes, so they did the maths and then they did the maths again.

Whatever way they looked at the HMO route, it just didn't add up.

So, having submitted plans for the flats, they put the project

on hold and waited until finally they got the go-ahead.

So we've got six flats, three upstairs and three downstairs.

They're all pretty much designed in the same way, just slightly

some colour differences but other than that, yeah,

they've been finished now so we're quite pleased.

All the properties are one-bedroom flats but because of

the nature of the building, each one is unique, with flats on

the upper floor slightly bigger than this ground floor flat.

This is the bedroom and this is the living room-cum-kitchen diner.

So, what we've done here is gone for different coloured tiles and

different coloured kitchen units to give people the choice but

basically all of them have carpets in the bedrooms.

This one has an en-suite because we were trying to get

the maximum layout in the overall space on both floors

so some had to be en-suite and some not but it gives people the choice.

They all have wooden flooring.

And the way the windows are positioned,

it's great because it brings in a lot of light

but this is the best one because the colour of the tiles.

And this overall design look is down to Gita

while Sunil project-managed the development.

So, how well did that work?

We did work really well together but we did have some incidences

where I wanted to do one thing because I wanted to save money

and Gita is going, "No, we need to got for the best design and best look" and now, looking at the flats,

I'm really glad she put her foot down and it looks really good.

It's the little things that make a place stand out, even if it's

little cupboard doorknobs to toilet roll holders or mirrors.

Those are the finishing touches, I think that does make a difference.

Gita's right.

It is the little things that can make all the difference but

I'm guessing one of the small things wasn't the budget.

So, in total it has cost us about 140,000 for all six flats.

140,000 on top of their ?170,000 purchase price takes their

total spend to 318,000.

So, it is a sizeable chunk of money.

But was it the right decision to convert the building into flats?

What do two local property experts think?

The whole development has come out very nicely.

It started out as a redundant office building and

has been turned into six very smart flats.

The standard of the development is very good.

It is exactly what you need for this type of property.

Everything is clean and fresh and they are ready to move into

so they should be good and easy to let.

Sunil and Gita run their own lettings and property

management company and the plan was always to keep the flats

as rental investments.

But if they need to sell them on,

have they invested their ?318,000 wisely?

The six flats are going to vary in prices but anywhere between

about 90 and ?110,000.

The smaller apartments, probably ?95,000.

Going up to ?110,000 for the larger ones,

probably in a better position within the block.

We estimated around 100 for each one so that's good.

Yes, they're slightly different in terms of size

so I think the valuations are spot-on.

Yes, an average of ?100,000 would be about right, which would mean

there would be a potential pre-tax profit of 282,000 should they

choose to sell all the flats on.

But what about the all-important rental?

I think the flats are going to be popular and will achieve

anywhere between 600 and ?650 per calendar month.

In terms of the rental market, you would be looking at

between ?600 per calendar month to ?650 per calendar month.

We've managed to let two already, we have applications on two others.

Two flats upstairs are being rented at 650 per calendar month and we are

hoping to achieve a rental of 600 to 625 for the four remaining flats.

So, when all the flats are let out, the total monthly return is

likely to be around ?3,750 per calendar month

which equates to a whopping yield above 14%.

That isn't bad for a property purchase that

Sunil thought might be a mistake.

We don't have regrets now that we spent that initially.

On the day of the auction, I was regretting having put my hand up

a few more times than I should have done, I got carried away.

You did a bit. He always does!

# Non, rien de rien

# Non, je regrette ne rien... #

Nestled in the heart of the Lake District is the town of Penrith.

It was here we first saw a three-bed mid-terrace house

clearly in need of improvement.

It had a ramshackle conservatory,

and was generally in quite a bit of a mess.

But none of that put off experienced property developer Howard who

snapped it up at auction for ?114,000.

The house itself has got well proportioned rooms,

three bedrooms, great views out to the garden

so hopefully it's the right house in the right place...

With a bit of luck, at the right price.

And Howard hoped it would work out right for him and his budget

of ?8,000-?10,000 and that timescale of around three months.

Five months later,

we are back to see if this house was the right choice for Howard.

Outside looks a little tidier,

but it was inside where most of the changes were going to take place.

That front room is so much better. And the kitchen diner?

Yeah, that looks a lot smarter.

So, all straightforward for Howard, then?

The biggest challenge we had with the job was the amount of

stuff that was left here.

# There's too much stuff...

# Too much stuff... #

Yes, there were a few bits and pieces but I didn't realise it was that bad.

We hadn't been up into the loft space and the joiner was

the first one up there and he couldn't believe what he saw.

It was absolutely full to the ridge.

There was so much stuff in the loft,

it was causing the ceilings to crack.

In the end, we had five skips of rubbish to lead away from the house.

# There's more stuff Is that your stuff?

# And you know what to do with it That's a lot of stuff... #

And to add to the unexpected surprises,

when he removed the wallpaper, most of the plaster came off

so he had to re-plaster the whole of the house.

With the old bathroom suite ripped out and replaced,

he had even more things to be skipped.

It didn't stop there.

The outbuildings also had their fair share of bits and pieces

but here Howard decided on a more drastic measure.

There was a lean-to at the back of the house which had been

assembled from, I think they were old pallets and things found

in a skip and that really had passed its best.

Well, it didn't have a best!

And so we took that down.

There's a lot of repainting and patching up to do at the back

which we haven't done yet but it

has opened the back out a lot and made a big difference to the area.

So there's a bit more tidying left to do in the garden

but at least you can admire the views when you're out here.

Is gardening the type of role Howard likes to help out with?

I was involved in anything that requires no skill!

I was here every day that the work was going on.

I was involved in the decorating, cleaning, just moving stuff around.

We had local tradesmen in for plastering,

electrical works and for plumbing and the joiner is

a friend that's been working with me for a long time.

Howard also had help from his stepson Stuart but was that enough

to keep control of his proposed eight to ten grand budget?

We've gone over budget.

It came in at ?14,800.

That increase was due to the additional plaster work

we had to do, and the skips.

So, a slight overspend on the budget

which now sits at just below ?15,000.

On top of his ?114,000 purchase price,

Howard has nearly ?129,000 invested here

but has clearing and tidying the house meant he's cleaned up here?

What do two local estate agents think?

First impressions of the property are very good.

He has done a really nice job.

More of a standard makeover, a very nice property in a great location.

The selling points of the property, I feel, are the good sized bedrooms

and the size of the garden.

The standard of finish overall is very good.

Walking around I was quite impressed.

There are one or two things to finish off but overall if

he continues to do what he has done,

whoever purchases this property in the future will be very happy.

Howard's first plan was to sell the house on

but he has not totally ruled out rental.

If his property came to the rental market I would expect it to achieve

somewhere in the region of ?550 per calendar month.

Rental valuation, I would say this property should bring

between ?575-?595

per calendar month.

I was thinking around six, so yeah, that falls within pretty well

what I was expecting.

Even 550 per calendar month will see a rental yield of just over 5%

but Howard would prefer to sell on his ?129,000 investment.

In terms of resale for the property, after the renovations that have

been carried out, I would imagine

I would market this property somewhere in the region of ?150,000.

In terms of the sales market,

I would put this property on the market at ?157,000

with the view to probably getting offers over the ?150,000.

Those are the sort of figures, I was thinking 155, actually

so there's no surprise there.

That 155 grand figure would mean a profit of just over 26 grand.

Is that enough profit for Howard?

I think what we may do is rent out for a couple of years because

at that level, that will repay all the money we spent

refurbishing it and then put it on the market after a couple of years.

And with 20 years' experience and over 50 property renovations

under his belt, if anyone should know how to maximise

a profit's return, it's got to be Howard.

While this house brings in a return on the rental market,

what will Howard do next?

We already have another property we're working on

that we bought at auction in Norfolk

so that's going to keep us busy for a while.

From north to south, east to west,

we go to auction houses all over the country.

We do, and perhaps you'll find us next time in your neck of the woods.

Yep, wherever you are, you won't want to miss it

so make sure you join us for more Homes Under The Hammer.

Goodbye! Goodbye! Bye!

Sir Terry was the ultimate master at talking to his audience.