Episode 47 Homes Under the Hammer

Hello. Now, nobody can predict the future, and knowing how best to

invest in property, well, it's always unpredictable.

That's true, Lucy, but it doesn't have to be too overwhelming.

My advice would be, how could you add value?

Well, one way you could do that is to head down

to your local property auction.

Well, property auctions throw up all sorts of auction lots.

Over the years, I've seen everything from public toilets to water towers.

But what was in the auction catalogues for today's buyers?

Yes, what did they walk away with? Let's find out.

First up, in Stratford, London, I put my foot in it.

Yep, floorboards need replacing.

Whilst in Peterlee, County Durham, I can't really get my head around it.

Checking the accuracy of instrumentation.

That has just completely gone over my head, that.

And in Newcastle-upon-Tyne, Lucy needs to watch her step.

Well...

Oh! Talk about literally falling in the front door!

All these properties have been sold at auction, and we will find out

who bought them and what they paid when they went under the hammer.

Sold!

Stratford in east London is about seven miles from central London.

It's seen a lot of regeneration, with spin-offs from the Olympics,

like the Queen Elizabeth Park,

various sporting venues and one of Europe's biggest shopping centres.

With all of that going on,

it's bound to have a buoyant property market.

Well, just down the road from West Ham Park,

ten minutes' walk from the nearest Tube

is the property I'm here to see.

£360,000 was the guide price for this. It's a three-bed mid-terrace.

As you can see, lots of shuttering on the outside.

Not an auspicious start. Let's hope it's better inside.

So, hopefully better, we come inside.

And... Well, it obviously hasn't been lived in...

Possibly lived in, but not updated for a while,

which could be good, because there could be features...

In fact, look at that. Some coving, very pretty indeed.

A nice sort of feel the moment you walk through the door.

A little corridor there and then into this room here,

one of the main living areas here.

A little bay window there. That could be quite nice.

Ooh, Yes, lovely. Original features. A bit of a ceiling rose going on.

Nice fireplace.

Wooden flooring that looks to be in really nice condition,

so you could strip at back.

Large archway through to the rear sitting room and, yeah,

it's going to take a bit of imagination,

and it's a lot of money for a house in this kind of condition,

but it's looking positive.

# I am beautiful

# In every single way

# Yes, words can't bring me down

# Oh, no

# So don't you bring me down today... #

OK, OK.

So it's not beautiful in every way, and lots of stuff will be coming

down, but there are some really lovely period features in here.

Well, it's quite extensive, this property.

Not so much at the front, but it goes back and back and back,

and down this corridor here, you've got a little access to the rear

garden area, and then this sort of what I imagine was originally...

Well, I can't imagine...

A kitchen, I guess,

although it doesn't show any signs of having been a kitchen.

What it does show signs of is, look at this.

Not good.

At all.

Yep, floorboards need replacing.

Perhaps even more than they did three seconds ago, but not to worry.

Consider it a small token of thanks for allowing us to be here.

Anyway, the kitchen. No, there is one. I was wrong. I'm so sorry.

Here it is, and it's perfect, look.

A little bit of cream cleaner on that, what's the problem(?)

And we are delighted to say that this house comes with white goods.

Well, they're not so much white...

Oh, look.

Lovely...

No.

Anyway... Yuck.

What is more serious and is going to take slightly more time

to resolve is this.

A very, very nasty crack. That needs investigating.

I wonder what's going on there.

So, anyway, the joy continues because, just there,

is the only bathroom in the property.

And there is no running water either. Oh, dear.

I wish I hadn't done that. Yeugh!

# Don't do it

# Baby, please don't do it

# Don't...do it. #

Yes, you'd think, after all these years, I'd know better than that.

Anyway, back to the house, and just off the hallway there are

stairs down to a useful little cellar.

Upstairs, there is yet more space.

Three really good-sized bedrooms,

and all obviously need a lot of work,

but the potential is there and... Well, I spoke too soon earlier.

There IS a bathroom up here, albeit a rather small one.

It might be an idea to use some of the space up here to make

a bigger family bathroom.

While you're at it, how about looking into the roof?

I happen to know that several properties on this road have

converted their attics into extra bedrooms.

You'd need to get planning permission, of course,

but in such a sought-after area, it's bound to add value.

At the back, there is a modest garden and

a very dodgy-looking lean-to type of thing that will need to come down.

But in London, any outdoor space is a bonus, so another tick.

There is a lot of house here in London terms for that guide price

of 360,000, but it's going to take a really healthy budget to

make it habitable.

Time to get the thoughts of a local property agent.

The size of the property is actually quite good.

Evidently, it needs quite a lot of work, however,

it's got quite a lot of potential

and it's definitely worth looking at

extending the property into the loft.

Adding an additional bedroom to the property would add great value.

Also, in addition to the fact that,

if you were to rent the property out, you'd obviously be

getting a much higher rental value on the property as well.

OK, so that's something for the buyer to consider,

depending on their plans for the property.

What kind of values, sales and rental,

would the agent put on the property if it stayed as a three-bed?

As a three-bedroomed house, once the refurbishment

has been done on the property, we would be confident in

achieving anything between £525,000 up to about £550,000.

We would be confident in getting £1,800 a month

up to about £1,900 a month,

subject to whether the property is furnished or unfurnished.

And what about if it did get turned into a four-bed?

We would be confident in achieving around the region

of £600,000 up to about £625,000.

With the additional fourth bedroom in the property,

we would be looking to achieve about £2,100 per month.

Well, it's got no windows downstairs,

the kitchen is horrendous,

the bathroom... Don't even talk about it,

It's got rot, it's falling to pieces, it's got that massive crack,

you don't know what it's all about.

Honestly, what a fantastic opportunity!

You are in a really good location with this one,

and all those big problems that could make people go,

"No way," make this a really interesting investment opportunity,

because it could put people off.

Let's see who saw the opportunity, rather than the mess,

when it went under the hammer.

I'm going to start at 430 on this one.

So 430 down here, 430.

435?

435. 440.

445.

450?

455.

New spot. 455 standing up. 455.

460.

The property got off to a flyer, and we re-join it at 480,000.

480. 485.

485. 490.

490.

495.

495.

499.

500.

500?

If not 499.

First time. Second time.

Third and last time, if you're done...

No, it can't quite sell at that.

The bids didn't quite meet the reserve, however, after a little

bit of negotiating, the seller did agree to a final figure of 476,000.

The successful bidders were

married couples and friends Kawal and Savita,

there on the left,

and Rags and Richa.

This was their first project together,

and it fell to Kawal and Richa to tell me about their plans.

-Kawal, Richa, good to see you both. Congratulations.

-Thank you.

Tell me why you wanted to buy this house.

Basically, we saw the potential in this property,

kind of an investment,

-because we've known each other as family friends.

-OK.

She's a good friend of mine

and of my wife as well,

and they have good skills of interior designing,

so that's the reason we thought,

"Let's do some business together and see how it goes."

What was it particularly about this house that you liked?

We liked that it has got big scope,

good ceilings and, at the moment, this is a three-bedder.

We can convert it into five if we want, or, if not,

four is the minimum we could do there.

What was it you liked about it?

We plan to do the loft conversion, basically.

So, right now, it's three beds so, the loft, we'll see how it goes.

We could put two bedrooms or maybe one with an en-suite in it.

So, was that one of the big things that appealed,

the fact there is this potential to extend upwards?

Yeah, it opens so many avenues,

so we are just going to expand on it and see how it goes from there.

What is the conversion going to involve?

Right, so if we are going to have, like,

five bedrooms, then we might put a dormer in,

otherwise we may not.

It depends on whether planning permission gives us approval.

Having a fourth and maybe even a fifth bedroom is ambitious

and will definitely depend on planning.

This new property team are certainly not afraid to take on

a challenge, and their plans don't end with the loft extension.

We just applied to open the kitchen,

to knock down all the walls to the end of the house and just make it

open plan, a big kitchen-diner sort of thing.

Nice.

And then bringing the WC from the behind of the house to

the middle of the house, and then adding another toilet upstairs,

-and the loft conversion.

-OK.

So, what budget have you got set aside?

Overall, it's going to be 70K, if we include the loft,

plus 10K contingency,

so it's 80K we have budgeted for.

Adding bedrooms and opening up the kitchen is bound to increase

the value, although, at the moment, they are planning to wait

and see how the market is before they decide whether to rent or sell,

and they're hoping the work to get it ready for either market

will take around two months.

So, who is going to do the work, in terms of the physical work?

Of course we'll not be doing it.

We've lined up a few builders and I've got some quotations

-with them. We have shortlisted, in fact, two builders.

-OK.

We still need to finalise, you know...

At the beginning,

everything looks very perfect.

When we get there, we might have some issues with the builder

and all, so we're just thinking which one's good, which one's bad

and we just need to take a call on that.

-Well, listen, congratulations.

-Thank you very much.

-Look forward to seeing how you get on.

-Thank you very much.

Well, it seems like there could be money to be made

on this house in Stratford.

How will the team get on sorting it out,

and will they go for four bedrooms or five?

You can find out later in the show.

Today, I'm in County Durham, and it's a place of contrasts.

This is the pretty seaside town of Seaham

and yet I'm only six miles away from former coal-mining villages

like Easington on the outskirts of Peterlee.

Both towns have plenty of amenities, so you've got loads of choice.

So, not far from the town centres of Peterlee and Seaham

is the property and I'm here to see, and here it is.

And it looks in really good condition.

This wall actually looks pretty new as well.

It has got three bedrooms, a guide price of £20,000,

and you get yourself a bit of a yard area as well.

Not bad.

Nice.

As soon as you come in, you've got the bathroom right in front of you.

It looks like a brand-new bathroom suite,

it looks like it has been painted.

New flooring as well.

Down a small step into what should be the kitchen.

There isn't a kitchen in here as yet.

Now, if you were looking to get a mortgage on this property,

you'd find it difficult, because mortgage lenders won't lend

on a property that doesn't have a kitchen.

Believe it or not,

most mortgage lenders set a minimum amount you can borrow.

It varies from lender to lender,

but anything below 40 grand can be tricky to get a mortgage for,

so this looks like it's going to be a cash buyer.

In the house itself, there's central heating throughout,

and the master bedroom has generous proportions.

In fact, all three bedrooms are a reasonable size.

And as like downstairs, new carpets,

and it's recently been painted.

Now, let's say you got this place for £20,000,

which is the guide price,

and you rented out for £400 a month.

You could have this place paid off in four years.

This is an absolute bargain.

If I leave now, I might just make that auction.

See you.

Yes, I know, I've missed the boat on that potential 24% yield.

Now, joking aside,

in order to combat antisocial behaviour and low demand,

the council have brought in a selective licence scheme in

this particular area.

The downside is, the landlords have to apply and pay for the licence,

but the upside - it's definitely worth it.

Landlords get support on vetting and dealing with tenants and, overall,

the licensing scheme has helped to improve the values in this area.

So, I'm out the back...or out the front, I'm really not sure!

On that side of the property, you've got a paved area,

a bit of a back yard on that side,

and here, you've got a small grassed area.

It needs a bit of weedkiller, a bit of grass seed,

this would be fine,

but what I have noticed is the local authority must have

spent a few quid in the area,

because the bricks have been re-pointed,

there's a brand-new door on, and almost all the houses have

got brand-new double-glazed windows, so this place has got everything...

apart from the kitchen sink.

We called in a local estate agent to see if she could shed

some light on the area and this property.

She might be able to tell us

which is the front door and which is the back.

# Back to back, back to front

# Will you come backwards with me? #

Well, the area has been the subject of local authority

regeneration over the last five, ten years, which has worked

really well, you know,

brought it up quite a bit from where it was.

You have a lot of people who will rent the properties,

but they're also good investment for potential landlords.

What about this property?

Well, first impressions are, the property has had

a lot of work done to it, which is only beneficial,

and I think you would get landlords who would be interested,

have minimal work to do, in consideration to some

properties where they've got to come in and do a total refurb,

and I think it'll be attractive for them.

The return and everything would be good. It would tick boxes.

Apart from the kitchen box, that is.

But is this just landlord territory? Could it interest home-buyers?

I think the property would appeal to both landlords,

investors and for people to live in.

It's cheap, affordable housing, not bad-size housing for the area,

and a good return for a landlord.

But before they can rent it out, potential landlords will need

to apply to the council for the licence, which costs around £450.

So, what rent could they expect to achieve?

If you were to put this property on the rental market,

with the kitchen installed, I would expect to achieve somewhere

in the region of £425 per calendar month

to £475 per calendar month.

Wow. That rental figure is even higher

than the one I used for my calculations.

So it's a rental machine, or it's a good, affordable home.

But what if you wanted to fit a kitchen and

a general refurb to sell it.

Would it be worth it, bearing in mind that guide price of 20 grand?

We would probably look to marketing the property anywhere

between £25,000 to £30,000.

All in all, this house has a lot going for it, but it might take

a landlord with a bit of cash to recognise the real potential here.

Let's see what happened when it went to auction.

OK, we're moving on now to lot number 18.

I've got a telephone bid on this one. £20,000.

What can you buy for £20,000? At £20,000... 15, then?

Let's move it away quickly. 15 I'm bid.

16. 17. 18. It's against the phones, with you.

18, 19, 20.

Here at 19, 20 on the phone. 21. You're out.

You're at 20.

At £20,000. Are we done?

Phone's getting it at £20,000. As you sure? You're away.

At £20,000, then. First time. Second time. All done, then?

To the phone.

So, the telephone bidder won the day with a bid bang on the guide price.

The bidder was Steve, who came along to tell me about this bargain.

Steve, nice to meet you, sir.

-And you.

-Congratulations.

-Thank you.

What was it about this property that you liked so much?

-I think the starting bid initially...

-Is that what it was?!

Yes, that's what it was. It was the starting bid initially.

I had looked at other various other properties at the same time,

round about similar sort of values.

This was the last property that I saw,

and I basically couldn't believe it,

compared to what I had seen, so I thought, "I'm need go for this one."

What were the other ones like?

The other ones were in a right state.

A lot of money needed spending on them,

just to correct other bad workmanship, in a sense.

Of course, there is one thing other houses have that this one doesn't.

-A kitchen.

-I had a good look round, realised it didn't have a kitchen.

That wasn't an issue to me. I was a cash buyer, so...

OK, so you knew it would have been difficult to get a mortgage...

It is difficult to get a mortgage without a kitchen...

Not a problem to you.

-Not a problem to me, no.

-Ready to go.

-Yes.

What are your plans, Steve?

Tell us what you are going to do with this property.

I've had a good look round the place.

I've looked at everything that needs doing and, really,

it is just the kitchen. Everything else is in good order.

The kitchen, it's not a big problem to fit in.

It's more or less, "What are you not going to do?"

-Because it's all more or less been done for you.

-Yes, it is.

The last person that had the property has obviously done

a bit of decorating themselves and, for whatever reason,

they haven't fitted the kitchen. That's fine.

It's a blank canvas for me. I can fit whatever.

So, have you done this many times before, Steve?

What's your day job first of all?

-Metrologist.

-OK, you might have to explain that to me.

I'm not quite sure what that is.

Well, basically it's calibration work.

It's to do with weights and measures in various fields - electrical,

pressure, temperature -

and it's checking the accuracy of instrumentation.

That's just completely gone over my head, that.

I'm actually still none the wiser on what's Steve's job is here,

but, anyway, he also rents out a pub

and has some residential developing on his CV.

Having rented and sold in the past,

he hasn't made up his mind on what to do with this one.

OK, so, in regards to the property, what's your budget going to be?

I know you have got to put a kitchen in,

but what is your budget for this property?

1,000 to 1,500, depending on the type of quality of the kitchen

that I'll be putting in. There's obviously a sink, taps going in.

There is a little bit of work on the boiler as well.

One of the pipes is broken there, so I'll have to fix that as well.

How long is it going to take you just to turn this place around?

I'm going to turn it around within two weeks but, mainly,

it'll be just a full weekend.

So, who's going to be doing the measurements in the kitchen?

I'll certainly be doing the measurements in the kitchen.

-Please don't get them wrong, whatever you do.

-Yes.

What I did notice, Steve, as I was walking down the street,

all the windows in the street seem to be brand-new.

They do. That surprised me as well.

When I saw the starting bid of the property,

that intrigued me first of all,

but when I came to see the property, I noticed all the windows,

and there had been other exterior work that had been done to

all the properties prior, which, again,

obviously added extra interest to make sure I got this property.

-And you've got a little bit of garden at the front as well.

-Yes.

The back garden, or back yard,

is more favoured to the residents round this area but,

you know, it does have a front garden as well,

which is a nice little size, easy to maintain.

And this has got to be one of the easiest, surely,

-that you'll be turning around?

-It is unbelievable. Unbelievable.

Were you surprised when you... Well, you got it for 20 grand, didn't you?

I was notified that I won the bid. I just couldn't believe it.

I was absolutely speechless. Still can't believe it.

It looks like we will be coming back very quickly to

see how you got on with this one. I wish you all the best.

-Thank you very much.

-Good luck, pal.

-Cheers.

So, metrologist Steve has only got the kitchen to put in,

because everything else has been done for him.

But when we come back, will that kitchen be made to measure?

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

Still to come, in Lemington, Newcastle-upon-Tyne,

Lucy comes up against a familiar foe.

First things first, it absolutely stinks of damp.

And in County Durham, sometimes everything just falls into place.

Everything just went according to plan.

We return to the booming area of Stratford in east London.

After the 2012 Olympics, Stratford has undergone something of

a renaissance, although the three-bed mid-terrace

I was here to see looked more likely

to pick the wooden spoon than Olympic gold.

Look at this.

Not good.

At all.

Yep, floorboards need replacing.

With a guide price of 360,000,

this property was damp and dingy, although there were some positives.

We're delighted to say that this house comes with white goods.

Well, they're not so much white... Oh, look.

Lovely...

Yes, a property like this needed vision and imagination,

so four heads were bound to be better than one.

Buying the property for 476,000

were married couples Kawal and Savita

and Rags and Richa.

The foursome have been friends for ten years,

and this was to be their first property investment.

They certainly didn't lack ambition.

We plan to do the loft conversion, basically,

so, right now, it's three beds, so the loft, we'll see how it goes.

We can put two bedrooms, or maybe one with an en-suite in it.

So, was that one of the big things that appealed,

the fact that there is this potential to extend upwards?

Yes, I mean, it opens so many avenues so, yes,

we're just going to expand on it and see how it goes from there.

Including a loft conversion,

they had a budget of £70,000, plus a £10,000 contingency,

and they hoped to get the work done in three months.

Well, we've returned three-and-a-half half months later

to see if they've managed to turn this property from bog standard

to Olympic gold standard.

# Gold

# Always believe in your soul

# You've got the power to know you're indestructible

# Always believe in

# You are gold

# Gold... #

Talk about transformation. It was dirty, dilapidated and depressing.

Now it is a huge kitchen-diner.

Kawal explains exactly what they've done.

What we have done is, we have knocked all the walls.

There was a loo there and there was kind of storage space there,

and there was a wall here,

so what we have done is we have extended it to make

the open, wide kitchen, and we have put everything literally brand-new.

We have done everything - rewiring, re-plastering, so, in the end,

we are pleased with the results, really.

Yes, it's stunning, and it doesn't stop there.

The living area at the front of the property is really beautifully done.

They've maintained the period features, while bringing it

up to date, and the new flooring is a real touch of class.

The idea to add a door into the garden also shows they've really

thought about how best to use the space they had.

Of course, the big question here was always whether they would

convert the loft, so time to find out.

Wow, they really went for it. A really nice loft extension.

We'll need Rags for this.

Quite a lot has changed here.

Well, it's a brand-new floor, as you can see.

This initially was only a three-bedroom and we

converted it into a five-bedroomed house. A brand-new big bedroom.

We have a Juliet balcony, which is always an asset because,

again, it lets more light into the house.

On the other side,

we have a brand-new bathroom with shower and a skylight window.

It gives a lot of light.

And another bedroom there, which is a good double-size bedroom so,

all in all, it is a pretty spacious one and, you know,

a very bright house, I'd say.

Down a level, the three pre-existing bedrooms have been completely

renovated to the same standard that runs throughout.

They've extended the bathroom into the landing to make it large

and family friendly.

Downstairs, they've moved the WC under the stairs.

Outside, they've made the most of the space they had.

Extensions, conversions, renovations, you name it,

they've done it.

It was fantastic, really. It was a really great experience.

We went along together, no issues at all,

because we've been, like, family friends for ten years now.

This is an addition to that, so it's a really great journey,

a great experience.

We actually help each other out so when I was busy,

Kawal stepped in and vice versa,

so that's how it works on the project,

and the same with the wives as well.

Structural decisions, architectural decisions,

it's all their contribution.

Unfortunately they couldn't come today but there we go.

In fact, financial issues also, they were the main contributor.

We thought, "OK, we'll save money here".

But they said, "Let's not do that, cut the corners and save money,

£because it's a big time investment".

So wives Savita and Richa were pulling the purse strings

and I'm glad to report that they've stayed within their budget,

spending £75,000 in total.

They only overran their three month timescale by two weeks.

The couples plan to sell the property,

but they are also open to renting.

An ideal time to hear the opinions of two local estate agents.

A loft extension to the property adds value to the house

and also brings in the family market which presumably the vendor

is looking for, to sell this particular property.

It's not your typical refurbishment.

He's obviously set it out so he gets the maximum either a rental

or sale price on it. I think he's done a very good job.

You certainly have a demand for five-bedroom properties in this area as well.

And obviously for him to achieve the maximum for his investment

five bedrooms definitely would be the right decision to make.

Well, let's find out if it was a wise move financially.

The couples ended up spending a total of £551,000 here.

So what kind of a rental return could they expect?

I think we should be quite confident in achieving

a minimum of about £2,750 per calendar month.

You are looking to achieve

within the region of 2,750 per calendar month to 3,000.

That top rental figure would equate to a rental yield of

around 6.5%. Not too shabby.

But what about resale valuations?

This property should be put on the market at £650,000.

If I had this property on the market I would have it at a

valuation of £650,000-£675,000 with a view to achieving the maximum.

That top valuation would mean a whopping pre-tax profit of

£124,000, which makes their maiden property project a stunning success.

So what does the future hold?

If we put the property on the market we'll see how the response is

and then possibly, if you sell the property, then possibly we will move

on to the next one.

If not, also we might just rent it out and move onto the next one.

Yeah, that's a plan.

We might take a short break maybe and go on a cruise.

THEY LAUGH

-You know?

-Yeah. That's a good idea.

Lemington in Newcastle-upon-Tyne is Lucy's destination today.

It's an area steeped in industrial history,

illustrated by the great brick glassworks cone built in 1787.

Around the area, there are the remnants of the arteries of industry

from coke ovens to ironworks.

But the heart of Lemington is still beating strong as an ideal

commuter area close to the A1.

Well, the property I'm here to see is just over here.

It's got two bedrooms, and the guide price £36,000 plus,

so not bad really.

But to tell you one thing I really do like, well,

you can see it's off the main road here so there'll be

hardly any traffic noise, which is a real bonus.

Let's see if there's more good news on the inside.

Looks like you might have to do some work out here.

That fence has seen better days.

And the garden hasn't seen a mower for some time.

Well... Ooh!

Talk about literally falling in the front door!

That does not look safe. Goodness me.

I'd want to investigate underneath that lino.

So walking in the hallway, first things first, it absolutely

stinks of damp.

I'm sure a lot of the walls are wet to the touch, but look at this.

I mean look. There you go. Just peel the wallpaper off.

Not a good start. So through here we've got two reception rooms.

Now, you can see there's a little door divider here.

I'm just wondering, this probably would have been two separate rooms

because if you come in to here

and you give the walls a little knock, well, you

can see originally there would have been a doorway there.

So you could reinstate that doorway, close this up and have

a nice cosy little room.

And actually there's some nice cornicing in here.

Then you've got a second reception room, which, if it were mine,

I would probably open up the kitchen to have

a nice open plan kitchen-diner and have that as a separate entity.

It's a real house of the senses, this one.

You can see some nice original features

and the potential for a new layout.

You can hear it crying out for modernisation, but there is

a scent in the air that suggests a lot of work ahead.

# And I smell trouble

# I smell trouble ahead of me... #

But before even thinking of any changes to the kitchen or the

layout, Lucy needs to follow her nose to the source of the damp.

So let's have a look around upstairs.

It still absolutely stinks of damp up here. And the bathroom...

leaves a lot to be desired, don't you think? And it's a bit too small.

Bit of a shame because the further up the property you come,

the most spacious it feels. But that is the culprit I think.

You can see a big old damp patch up there. And millions of cobwebs.

They're everywhere. In my hair. Ugh! I don't like cobwebs.

So bedroom number one, a really good size but in a terrible state.

But right at the front of the property, the master bedroom,

look at the space in here. What a luxury to have a bedroom this big.

You've got a lovely view out to the park just out there,

but I'm wondering how you could utilise this.

Is it worth putting in a partition and creating that third bedroom

or do you want to maybe install an en-suite bathroom in here?

It's great you've got so many options

and I love it that it's so spacious upstairs.

Before thinking about turning this big bedroom into two

or altering the bathroom, you'd need to focus on that roof

and getting a damp proof course.

It might be less wet outside.

With these workmen's houses, you don't always get

a back garden and sadly with this one you just get this back yard.

But I suppose you have got a little bit of outside space.

But quite a lot needs to be repaired here.

The wall needs to be tidied up.

And, well, I've seen a roof garden before, but never a drain garden.

# Watch my garden grow

# Watch my garden grow

# Watch my garden grow

# Let the seasons come and go... #

The greenery and the guttering, and the fact that some of it

seems to be unattached to the building, might just be

a clue to one factor in the damp issue.

We asked a local estate agent along to have

a look at this property guided at 36,000.

The properties needs a complete refurb throughout.

It's in not the best condition so certainly with the time and effort

and care spent with a potential buyer

it should make an attractive purchase.

I'd estimate to spend between £15,000 and £20,000 on this property to get it fully up to speed.

What does the agent think of the idea of adding a third bedroom?

In my opinion, I'd be looking

to keep this property as a two-bedroom terraced property.

It should attract more potential buyers and tenants that way.

Third bedroom could be a costly exercise,

so two bedroom is probably the way forward.

OK, in that case, what would the house be worth

as a two-bed for sales and rentals?

If this property was refurbished throughout, I would expect it

to achieve somewhere in the region of £65,000.

In my opinion, if this property was fully refurbished, I would expect

it to rent for figure of £500 per calendar month.

And the agent believes the three-bed might sell

for £75,000, or rent for £650 per calendar month.

Whatever you choose to do, there is some serious graft ahead.

Now, there's no getting away from the fact

this house needs a lot of work.

I don't think you could or would want to salvage much in there.

But I do think there's a great little property lurking somewhere.

And the fact it's opposite a park means it could really appeal

to the family market.

And that guide price should also spark a fair bit of interest.

Let's see what happened when it went under the hammer.

We move over the page to Lot 43 and we have telephone bids in on

this property. 38,000 to start me? £38,000?

36. 36,000. 36, I've got by the back. Thank you.

At £36,000 the opening bid. At 36, 37 somewhere? 37 is bid. 38.

On the phone at £38,000. 39 is bid.

At 39. At 40? 40,000. £40,000. 41 quickly?

The auction battle was locked between the phone bidder

and the bidder in the room.

We re-join at 46,500.

47, on the phone at £47,000.

Five? 500? £47,500. 48. 48,000.

One more, sir? 49. 49. 500 again?

49,000 on the phone. 500? Yes?

49,500. £49,500.

Once, twice, third time. Sold at 49,500. Thank you.

So in a ding-dong battle between the phone bidder and the room

Chris prevailed with a bid of 49,500.

He's an experienced full-time developer

and he knows this area very well indeed.

Time to find out his plans for this soggy property.

-Chris, congratulations. Well done.

-Thank you.

Why did you want to buy this property?

Well, I've got two in the street there that I'm currently working on.

And I'm buying the houses in this area for about £20,000 less

than I buy in other parts of Newcastle.

Is this an area that is probably due to come up,

but it hasn't quite reached its peak?

Well, I'm hoping so because it's close to the A1, the main route,

it's not far from the airport. It's handy for Newcastle.

I don't think there's going to be

a great capital appreciation immediately,

but maybe long-term it might.

How long have they been doing this?

Have you got a collection, a portfolio of these properties?

-I've got 25 now.

-You've got 25?

-Yes.

-Wow!

And how long has it taken you to accumulate all of those properties?

About '91 I started.

I used to work for a company from London,

shop fitting all over the UK.

So you were shop fitting. What were you, a joiner?

I'm a joiner by trade, yeah.

You are a joiner, so you were doing it for everybody else

and you thought, "Hold on a minute, I'm going to do it for myself".

Yeah, well, it was just on the side when I bought the first one.

And I just continued from there. But since 2011 I've bought ten.

So with this property here, the thing that really smacks you

-in the face is the smell of damp.

-Mm-hmm.

-I mean how bad is that?

I've done a lot worse properties than this so it doesn't really...

I'll just strip them out completely now on the inside.

-So you're going to completely gut this place?

-Yeah.

-You're going to really take it back to the bare brick almost?

-Yeah.

Chris is clearly not fazed by the problems here,

so once he's got his dry house, then what?

-French doors in the back there, probably.

-OK.

-New kitchen.

-Yeah.

-I'm not sure about this. I might make this back into two rooms.

-Yeah.

And I might put the bathroom at the front

and just use that small thing as a study.

Why are you going to change the bathroom that's already upstairs to a different location?

Just to get a bigger bathroom with more facilities in. I'll probably put a shower cubicle in as well.

I was thinking that you might have put a stud partition up somewhere

and told me that you were thinking of converting this

into a three-bedder, but you're not going to do that?

I might consider that, but... I've done other ones, but I think I'm

probably going to put the bathroom at the front.

You'll see when you come back.

We will certainly see.

The space where the bathroom is currently would probably be

too small to be classified as a bedroom but an additional

study is usually welcome.

And a good bathroom and kitchen might be more appealing to

people renting, which is what Chris plans to do.

-What sort of budget have you got to spend here?

-10,000. 10,000-12,000.

Do you have to be really strict about that or can you afford to go over a little bit?

It has to get finished, so it takes whatever it takes.

Is this a process that's going to take you quite a long time or

do you just get in, do the work, get out, put it up for rent?

It takes 10 to 12 weeks I would think. 10 to 12, in that region.

But it doesn't matter because it's my full-time job anyway.

The quicker the better, but it takes however long it takes

and probably a little bit longer.

Chris is now reaping the rewards for steadily building his portfolio

and doing most of the hard work himself.

He's also overcome some big challenges along the way.

I had cancer in 2011.

And thanks to the wonderful staff at Freeman Hospital, I'm pretty good.

-I feel like I've had a new lease of life.

-Do you really feel like that?

-I feel great.

-Do you feel like a totally new person?

-I do.

-I feel great, yeah.

-Do you?

-Aye. Fantastic, aye. I've got a fantastic team round us who help.

I've got a lad works for us.

Everybody, my old friends all help and...

it's thanks to them I'm probably where I am.

It's been lovely meeting you today and it's brilliant to see you

-looking healthy and fit and really enjoying your work.

-Thank you.

And I look forward to having a look at how fabulous you can make

this place when we come back.

-Thank you very much.

-No pressure.

-Thank you. Thank you.

THEY LAUGH

Well, it's pretty obvious that Chris isn't going to be fazed by

anything that this house throws at him.

He's been there, seen it, done it, bought the T-shirt.

Although I do think there's an awful lot of work

for that 10 to 12 week timescale.

Do you think it might be too much to achieve?

You can find out if Chris manages it later on in the programme.

One property down, but we're not done yet. Still two more to see.

Will we witness creative changes or catastrophic chaos?

That's a bit dramatic, Lucy. Whatever. Let's find out.

Earlier in the show, I was just outside Peterlee in County Durham.

The property I viewed was

a smarter than average three-bedroom terraced doer-upper.

And, when I did my sums on its potential,

they produced some impressive results.

Now, let's say you got this place for £20,000,

which is the guide price, and you rented it out for £400 a month.

You could have this place paid off in four years.

This is an absolute bargain.

Absolute bargain is right for anyone who's got the readies to part with, because there was

no great hope of getting a mortgage as there was no kitchen,

just an empty room where one should be.

The man with the money was metrologist Steve.

# It's raining men Hallelujah

# It's raining men... #

OK, guys, I said metrologist, not meteorologist.

Metrologists measure and calibrate things,

and Steve got his measurements spot on with his phone bid.

20 grand, bang on the guide price.

Normally at this point I would give you

a list of things that need to be done.

So here goes. He's got to fit the kitchen and... And that's it.

Well, I've had a good look round the place.

I've looked at everything that needs doing and really it is

just the kitchen. Everything else is in good order.

The kitchen is not a big problem to fit in.

So here's the jeopardy. Steve had a kitchen to fit and thought it

wasn't going to be a problem and should take only two weeks.

I get the feeling the next programme after us might be starting

sooner than scheduled at this rate.

But we're back three weeks later to see how he did.

Are you ready for the big reveal?

Remember this is what the empty room looked like.

And this is it now.

MUSIC: Fanfare for the Common Man by Emerson, Lake & Palmer

Steve's agreed to take us through

some of the finer points of the design.

Kitchen layout is a conventional U-shaped kitchen based on the actual

general design of the kitchen, of where the actual window is

and where the door is.

The sink has been located slightly differently to where it was

initially, or where it would have been, to try and maximise the

amount of light in. Fitted cupboard units.

The hob and oven has been more centralised as well to where

the actual gas point was, which was over to this way.

And we've actually fitted an extractor hob as well.

We've also fitted a new LED panel light which is low energy

which looks quite good.

Steve says the kitchen took two weekends to complete.

The first weekend to order the bits and the second to fit them.

But, whatever the size of the project, often unforeseen snags

come to light to frustrate developers.

I haven't experienced any challenges or problems at

all with this project. Everything just went according to plan.

How about the budget?

In Steve's case it was £1,000 plus a £500 contingency.

The overall kitchen pricing

was £1,388 for the actual kitchen units themselves

and all the auxiliary components to go with that,

including the hob, sink and oven.

There was some extra work that wasn't really planned,

like the lighting and the tiling as well.

That cost an additional £130. And then the extra building work

from a professional builder was an extra £220.

What was actually spent was £1,750.

Actually, for the sake of accuracy, I make it £1,738.

Which is more or less £250 over the maximum budget.

Oh, well, to get the valuations since the improvements,

we've called in two local estate agents.

First with an opinion on the kitchen

who better than the agent who saw it before the work began?

The kitchen's been fitted out really well,

and I think, for a developer, he's done well.

He's done what he's needed to do.

It's clean, it's tidy, it's neutral, and it works.

Steve's decision to sell or let

is going to be guided by the valuations.

So far, he's spent £21,750.

So what's the property worth now?

If I was to put this property on the market, I would recommend

an asking price of offers around £39,950.

If this property was to be entered to the rental market I would

recommend an asking rent of £450 per calendar month.

The resale for this property would be anywhere

between £30,000 and £35,000.

For the rental market, I think you would achieve somewhere

around about £475 per calendar month to £500 per calendar month.

Taking the top valuations, that's a potential profit

in three weeks of £18,200 before taxes and expenses.

On the rental side, the top value equates to a whacking, wait for it,

27.5% yield. So what's it to be, Steve?

I think going off the two figures, the resale value and the potential

rental income. I think it's best option to go for the rental income.

Steve will have to shell out £450 to the local council to become

a landlord here with the property being in a selective licensing area.

He intends to keep developing and hopes one day to build his own home.

Back now to Newcastle-upon-Tyne and the area of Lemington.

It was here that Lucy had a look around this two-bedroom

property that had a guide price of £36,000.

From the outside, it didn't look in great shape

and it held no false promises because inside it wasn't any better.

First things first, it absolutely stinks of damp.

I'm sure a lot of the walls are wet to the touch but look at this.

I mean look. There you go. Just peel the wallpaper off.

# It's no good, no good It's no good

# Baby, it's no good... #

Yes, our old friend damp ran throughout this property.

But the spacious upstairs gave pause for thought.

But I'm wondering how you could utilise this?

Is it worth putting in a partition and creating that third bedroom

or do you want to maybe install an en-suite bathroom in here?

It's great you've got so many options and I love it

that it's so spacious upstairs.

But the buyers were keen on auction day

with two bidders battling it out.

Sold at 49,500. Thank you.

The successful bid of 49,500 belonged to Chris,

a seasoned developer and local man.

He already has 25 properties in his portfolio,

including several properties in this area.

But, for his latest acquisition,

he was keeping us guessing about his plans.

I was thinking that you might have put a stud partition up

somewhere and told me that you were thinking of converting this

into a three-bedder, but you're not going to do that?

I may consider that but...

I've done that in other ones, but I think

I'm probably going to be put the bathroom at the front.

You'll see when you come back.

Make no mistake, inside and out, top to bottom, this property

needed a lot of work to get it ready for the rental market that

Chris was aiming for.

He had estimated a budget of 10,000 to 12,000

and a timescale of 10 to 12 weeks to get the job done.

We returned ten months later

and straightaway there is a great improvement

to the front of the property.

But what about inside?

Unrecognisable. The transformation here is phenomenal.

From damp and dated and dreary, to contemporary, cool and clever.

He created a singular kitchen-diner

by sealing the doors leading into the front living room

and opening up the once poky kitchen, and it works a treat.

The living room now has its own entrance from the hall

and, like the rest of the property, it's had a damp proof course.

It's been decorated to a high standard whilst also keeping

the original features.

Time to head upstairs where I can't wait to see what Chris has done.

Chris did decide to split the large front room into two,

making this a three-bed property.

The bathroom stays where it was although it's completely new

and looking great.

Out the back and it's looking much better.

A brand-new roof, not to mention the new guttering will safe-proof

the property against any future damp.

Chris has really gone the extra mile here.

He's created a property ready and waiting to be moved into.

I'm particularly pleased with the kitchen-dining area, and the

whole house I'm pleased with, but in particular the downstairs.

I think the rooms look really nice.

It took about 16, 17 weeks or something.

Obviously, I just look at these houses. I have a walk round.

I don't have surveys done

and that threw up a few more things than I thought.

It's took a bit longer because of the extra work with the roof

and the damp. To be honest, it was more work than what I envisaged.

It's been quite a tough one.

# So take care of your homework, fella

# If you don't, somebody will... #

Yes, Chris didn't have a survey done, and the damage to the roof

was much more than he originally thought.

Plus he was also working on not one, not two, but three other properties.

So his timescale didn't quite go as planned.

What about his £10,000-£12,000 budget?

It's probably in the region of £17,000, £18,000 I've spent on it.

The extra money incurred was the cost of the new roof

and the floors, extra floors, the renewal of the floors.

And probably a bit time and labour, that took a bit longer.

But I'm still happy with the outcome.

And hopefully the return will still be decent.

Well, let's find out.

Chris has invested a total of £67,500 in this property

that he hopes to rent out.

But will two local estate agents

think he's made a wise investment?

This is my first time in the property and my first

impressions are that I'm really impressed with the standard

of finish throughout the whole of the property.

It's been a while since I've seen this property, but I'm really

impressed with the quality of the finish.

He's done a fantastic job throughout

and the property really looks great.

The property has been converted from a two bedroom

to a three bedroomed house.

And the layout works really well because you've still got

a double bedroom at the rear of the property whilst the two bedrooms

at the front are really good proportions.

OK, so the agents are impressed, but what kind of value would they

put on the property now it's complete?

I'd expect to achieve a place somewhere in the region of £75,000.

I would hope to achieve in the region of £80,000 for the property,

potentially a little bit higher, due to the standard of finish.

A sale price of 80,000 would mean a pre-tax profit of 12,500.

But for now Chris has his eye set on the rental market.

I would think it would achieve

in the region of £600 per calendar month,

but because the standard of the accommodation is so high,

I would be prepared to test that a little higher

with a maximum of £650 per calendar month.

We'd be looking at the figure of £650 per calendar month.

I'm going to try for 650. But 600 still gives an OK return.

A man of few words is Chris,

but that top rental of £650 per calendar month would mean

a rental yield of a whopping 11.5 %. And, with numbers like that,

you can afford to let your work do the talking.

Well, from Scotland, England, Northern Ireland to Wales,

there are property auctions going on all the time.

We like to try and capture the action whenever we are.

-Yes, so please join us again here on Homes Under The Hammer.

-Goodbye.

-Goodbye.

-Bye-bye.