Episode 77 Homes Under the Hammer

Hello and welcome to the show.

All sorts of people buy property at auction

and the auction house attracts people from all walks of life.

Yes, and the properties themselves

are many and varied.

There's so many things to look forward to,

buying your home under the hammer.

Well, the kind of properties at auction are many and varied.

I feel like I've seen them all over the years,

from former public toilets to water towers.

Yes, variety definitely is the spice of life on this show.

Let's see what's on the menu.

The property Lucy's at is in Tooting, London,

and it boasts three rooms.

We'll find out what "three rooms" exactly are, on the inside.

It's going to take me a while to look around this nine-bedroom house in Liverpool.

It looks some size, so I'm going to get started.

And I'm in Silverdale, Newcastle-under-Lyme,

to see a three-bedroom semi

that's been classified as a dangerous house.

It doesn't look to be in too good condition from the outside.

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

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

HAMMER COMES DOWN

Lucy's in Tooting, a popular area of southwest London,

famous for its Lido and restaurants, among other things.

But there is a less famous Tooting,

54 million kilometres away on Mars.

Yep, a giant crater there is also called Tooting.

Thankfully, Lucy's sat nav took her to the one on THIS planet.

Well, as you can hear and see

it's a busy road, and not everybody will enjoy overlooking a cemetery.

But it's on the bus route, and you have amenities nearby.

Well, I'm here to see a first-floor flat

and it had a guide price of £210,000 plus.

It's described as having three rooms and a kitchen and a bathroom.

We'll find out what "three rooms" exactly are, on the inside.

So, what have we got when you reach the top of the stairs?

Well, there's the kitchen.

The bathroom leads off, so not ideal straight away.

And the layout just gets a little bit more unusual,

the further through the flat you go.

It's not really working, is it,

because what do they mean by "three rooms"?

Well, here's one of them. I think that's the lounge.

And then, through here, well, here are the two other rooms.

There's one of them down there.

There's this unusual little corridor area which is quite pointless.

And, well, a partitioned wall into a tiny little bedroom.

So what you've got is two very, very small rooms,

which are pretty useless, and one other room through there.

So, straightaway, I just want to knock all this partitioning down

and that means that you've initially just got

a one-bedroom flat.

But it will be a nice one-bedroom flat

because you could have the lounge, this bedroom here,

and the kitchen and bathroom down there.

So this is a case in point, people -

always view an auction property before bidding at an auction.

We're always banging on about it, but you know we're right.

Homework, homework and more homework.

Now, if you were to reconfigure this flat and just have one bedroom,

there might be space for a second up in the loft.

But that means you'll need a bigger budget,

and time to apply to the planning department

and get permission from the freeholder.

You might not even own the loft space.

Now, back to Lucy.

Lucy?

Lucy!

Now... Get out of the way!

Oh!

You might wonder what I'm doing rustling around in the bushes,

but that's because I've got some great news.

This flat comes with this garden,

and there is a fair old garden back there.

Yes, it needs clearing,

and I've been trying to figure out how long the actual garden is.

It's about ten fence panels' worth.

So it does go on and on.

It needs to get this shed out of the way

because it just takes up so much of the space, but I'm so pleased that

this flat has this outside space because in my mind,

it's going to add that extra bit of value that this flat needs.

To find out exactly what kind of value that could add,

we've asked along a local estate agent to get his opinion.

That garden adds a lot of value.

People in London, we don't get a lot of sun,

but we love outdoor spaces

and I think the size of it is pretty amazing,

considered the property that it is.

So, yeah, I think that does add value.

With a figure in mind,

I would say in the region of about 15 or 20,000 on the guide price.

This green space makes this ripe for development and reconfiguration,

but there is a major catch.

It comes with a short lease, with only 58 years remaining.

The short lease can be a problem for buyers.

Being a short lease it is quite hard to get a mortgage from lenders.

So if you're looking to put this property onto the sales market,

it would have to be a cash buyer that would be willing to buy it.

Now, with the property prices in this area,

that would be extremely difficult.

This would decrease the property of the value by about £25,000-£50,000.

So, this flat adds value with a garden

but then the short lease takes it away.

So if the lease was extended

and the flat returned to a good spec one-bed, what could this property,

guided at £210,000 plus, be worth?

If it was to go into a one-bedroom flat,

this property could sell for £390,000 to £410,000.

No. This flat is not without its issues.

The layout doesn't work and it's in poor condition,

not to mention that short lease.

Still, if you can see past that, well,

this could be a very good investment.

Let's see who agreed when it went to auction.

Very popular location, I know this area.

So, first-floor flat, great potential.

Kick off at 200 on this?

200. 205? 205 anywhere? 205.

210.

215.

220.

225.

Two bidders at the back of the room went toe-to-toe for this lot.

We rejoin at £321,000.

321.

Over here, 321. 323.

Anyone else? If you're all done...

Sold, 321. Good buy, well done.

Are you going to go up into the loft?

Yes? Yeah!

Hey, auctioneer, no spoilers, please!

Well, the successful bidder, who paid 321,000, was Charlie.

He said he wanted to go "up in the loft" at auction.

Let's see what his thoughts are now.

Charlie, lovely meeting you today. Thanks for coming along.

What's the story behind you wanting to buy this?

Well, about two years ago, I bought a house in Brixton, in London.

It had loads of problems with it, leases...and basically I managed to

sort out the problems over a couple of years

and it's gone up in value a lot. And ended up being a good deal.

And I was sort of slaving away on selling popcorn for a company.

I like the job, but I was like, this is not what I really want to be.

-So, you were selling popcorn?

-I was selling popcorn, yes.

What, literally, selling it to people?

No, I wasn't in a cinema with a little thing, I was...

-Like a sales manager?

-Yeah, a sales manager.

From the KERNEL of an idea to quitting his job,

and inspired by the success of his Brixton house,

Charlie started working as a handyman

to gain practical skills before buying this place.

So, what are you going to do to this flat?

I would be quite intrigued to find out how you're going to change

the layout. Because it's a little bit awkward, isn't it?

Yes. Initially, I was literally going to make it into a really

nice one-bed and rent it out.

And then, because I didn't think I'd be able to get planning permission,

and now I've looked at it and I think I CAN get planning permission to go into the loft.

So, the first thing is,

this will become a bedroom and it's a reception room at the moment.

In the back of the house, where the kitchen and the bathroom is,

-that will all be ripped out and become a second bedroom.

-OK.

And then at the front,

I'm going to take out those lovely walls

that someone put up about two months ago.

They're going to be ripped down,

and then it's going to be made into a large kitchen diner at the front of the house.

And then, hopefully, if we get the planning permission,

upstairs will be a bedroom and a bathroom.

I mean, I think if you do manage to turn this into a three-bedder,

it's the little pot of gold at the end of the rainbow,

you've done very well.

What about the loft space? Because you can't take it as read that you OWN the loft.

I've read through the list. And I've shown it to a solicitor,

and they're like, basically you're 95%, you own that loft.

Is 95% certain enough, though?

Charlie has been proactive -

before the auction, he made contact with the freeholder

to enquire about this, and that much-needed lease extension.

And he thinks a deal is going to be possible.

But of course, it will come at a price.

If he chooses to negotiate there are no rules,

and the landlord could refuse to extend,

or charge what he or she wants.

Alternatively, if Charlie holds on to the property for two years,

he would have a right under law to add 90 years

to what is left on the existing lease.

Of course, the freeholder is still due a payment,

but there is a formula set to work this out.

That and the planning issues aside,

Charlie hopes to get the work done in three months.

So what sort of budget have you got to do all the budget work here?

You've got obviously the renewing of the lease,

which I think will be about £70,000, which is quite chunky,

but, you know, I think it's reflected in the price.

Then for all the downstairs, sort of around £10,000,

and then the loft, I'm sort of... I'm hoping to get it under...

somewhere between £25,000 and £30,000.

-OK.

-And that's sort of where I'm looking at at the moment.

So you are looking at potentially doing this up to then sell on?

Yeah. I'm looking to do up to sell on, but whatever happens

I'm going to keep it for two years,

just the way my mortgage is, I've got a fixed rate for two years.

Anything that you are worried about with having purchased this building?

-Yeah, the whole thing really!

-HE LAUGHS

You were filling me with confidence. Now you're worrying me!

Was that all just a load of chat?

Well, it's just obviously I've never done it before,

so everything's like...

-new. Yeah.

-LUCY LAUGHS

You sounded so confident for a minute there.

"Yeah, I'm going to do this, do that.

"Oh, actually, it's all worrying me!"

Yeah. Every single little bit is obviously worrying me because

I've never done any of it before. And it's all completely new.

So what did your family think when you decided to sort of give up your proper job, your monthly wage?

I didn't actually tell them. I just sort of...

I told them after I'd given up my job.

It is the second job I've quit,

and I remember how good it was the first time. I was,

"I've got to do that again."

-You've got to try and hold this job then, OK?

-This one?

-You need to keep this job.

No, but I will because it's me, you know, it's...

I can... If I don't, it's...

I've got a big loan and stuff to deal with,

so I really need to do it properly.

Sometimes you've got to take the risk to get the gain,

and I think that you should take that risk.

Yeah, because it's...

Don't tell anyone I said that.

No!

-Lovely meeting you.

-Brilliant.

-Good luck with this whole project.

-Thanks. Thanks a lot.

From popcorn to property.

Charlie's a brave man, quitting his job and starting afresh.

He's got his ideas, but there's still a few unknowns here.

Will he get permission to convert the loft,

and how quickly will he manage to extend that lease?

Liverpool's Victorian architecture isn't limited to the city centre.

Imposing houses in the east are now part of a conservation area.

Just across the road from Newsham Park, which is just there,

on this street, which is full of grand houses,

and it's one of those grand houses

I'm here to see today, and here it is. It's a bit of a monster.

And we're only two miles away from the centre of Liverpool as well.

It's a former care home,

it's got four floors, and a guide price of £190,000.

It looks some size, so I'm going to get started.

# I'll be home, my darling... #

OK, if you can hear a beeping, that's just the alarm,

so don't worry about that.

But look at this flooring. Originally tiled floor,

very in keeping with the outside of the property as well.

Really high ceilings, even more detail as well there.

You've got a really large sort of lounge area to the front

with a massive bay window, which WOULD be letting light in

but it's all boarded up, or it's got grilles round the front of it.

To my right, you've got a big room there with a huge hatch as well,

I'm pretty sure that is connected to the kitchen.

You've got stairs going up, stairs going down.

So, pop pickers,

we'll start at the bottom and chart this nine-bedder

all the way to the top.

MUSIC: Pick Of The Pops Theme

In the basement, a new entry today,

floodwater in the laundry

by the twin toilets.

Also, at the front of the house,

the blue storeroom, and a curious black bottle

by the window.

Bringing up the rear, it's a peach room

with dehumidifier.

Now we're climbing to the ground floor.

If it's china in your hands you want,

there's a WC and a wash basin.

Back at the rear, kitchen, store,

and I was right about that hatch.

We're climbing again but the half landings ain't half confusing.

So on the first floor, and its other half,

there's two bathrooms and four bedrooms.

Bedroom number nine has the green, green paint of home.

Number eight is mellow yellow.

Seven has got a purple haze.

Number six is peachy.

Up the stairs to the top five, just past the shower room,

number five is pink void.

Number four is all right

and staying bright.

At three, it's lavender blue.

And two, it's pale pink

and green skirting.

And number one, it's blue room

from up in the rafters.

One thing I did notice is that this place has got a lift.

You're probably thinking, fantastic!

But it doesn't look the newest lift I've seen in some time,

and it could be a bit of a problem.

Tenants could get stuck in there, maintenance costs...

For me, I would make it fire safe, board it up.

I wouldn't want it being used.

OK, this used to be a care home,

so I'm thinking the electrics and the heating will be in good order,

which is good for your budget.

I think the bill for rewiring a place of this size

or putting central heating in

would dwarf the average refurbishment budget.

I'd want to know what is causing that basement flooding.

It might need re-tanking.

Having walked around this place, a lot of you may be thinking,

why not turn it into flats?

And you could turn it into flats, but for me,

the configuration just doesn't lend itself, and those split levels,

I think it could be a lot of hard work for little gain.

Now, for me, this place is screaming out to be a HMO,

but it has its pros and cons.

Cons being, you'd need to put fire doors in,

you'd have to make it safe, bathrooms, kitchens,

you'd have to apply to get a change of use as well,

and get a HMO licence.

And then, you've got to find your tenants

and you've got to manage them.

They're just a few cons.

The pros are - and there's a lot of them

so I'll just get the most important one -

is they can be incredibly lucrative, and that's the key.

HMOs, or houses of multiple occupancy, are common in this area.

And that's hardly surprising because properties of this size

aren't normally inhabited by just one family.

We called in a local estate agent

to see if he could shed some light on ways of improving the living space.

There are a number of other additional rooms

that could be turned into bedrooms.

It could even make its way up to an 11-bedroom property.

And that would really maximise the income.

What income could you expect from a good HMO room?

An en-suite HMO room in this area,

I'd be looking to achieve £110 per week.

With 11 rooms, that could generate an income of 58 grand a year.

What about reselling the property once it's been refurbished?

Once this property's been completed and the works have been carried out

to a high standard, I would expect to achieve a figure of around £300,000.

It's a popular area, a good location and a good rental income,

so should be very popular.

The potential here is huge.

And whoever got their hands on this is definitely on to a winner.

Let's find out who that was when it went under the hammer.

So, 147, we're back off to Liverpool.

Leasehold semidetached, four-storey building, 14 rooms.

1.118 of an acre.

Start me at 165.

Nice looking building. Anyone here for it, 165...?

There he is. Good afternoon, sir.

165. 165, I'm bid. 170.

Lady's bid at 170.

Good afternoon, madam.

175, sir.

80.

85. 90.

95.

190, madam, on my left.

195, anywhere else?

190, I'm bid. First up at 190.

Second time at 190.

And last time, anybody else?

At £190,000,

are we all done?

OK, then.

Yours. Well done, madam.

Another happy buyer.

And this time, the happy buyer was Sarah,

who's been a property developer since 2014.

She paid 190 grand for what is now her 11th property.

Most of her other ten properties are, yes, you've guessed it, HMOs.

MUSIC: There She Goes by The La's

She met up with me, so I could find out

what her intentions were for this, her largest property to date.

-Sarah, nice to meet you.

-Lovely to meet you, too.

-Congratulations.

-Thank you very much.

Firstly, this is a monster.

-Yeah.

-Tell me why you wanted to buy it.

So, it's progression, basically.

At the minute we're dealing with sort of seven-bed HMOs,

and we want to move onwards and upwards.

So this has got huge amounts of potential to develop into, hopefully, 11 bedrooms.

-So did you know straightaway as soon as you came in what you wanted to do?

-Yeah.

There's lots of space where we can put en-suites in the rooms,

the kitchens can be moved around, so we get big kitchen-living rooms.

And then there was a lot of reception rooms

which weren't being utilised as bedrooms at the minute.

So we're going to convert those into bedrooms,

with the en-suite rooms.

So how about the communal areas? How many of those will there be?

So, communal areas, there will be two kitchens,

both with dining rooms in.

And then also a separate communal lounge.

Wow! You must have so many pictures going on in your head.

Yeah. It's been quite a thing with the architect to go round,

look at floor plans. It's taken a long time to sort of think about

the best way to utilise all the space.

A lot of HMOs going on in this area. It fits really well

and we're not having to do too much structural work.

And who's going to do the work for you?

Have you got a team of builders? Are you going to get stuck in yourself?

No, not me! Yeah, I've got a fabulous group of builders

who've been working on my other projects.

So they're going to move in here as soon the planning's through,

and hopefully sort of three to six months

for them to turn the place round.

-Really? That short a time?

-Yeah. That's the plan.

And what's your budget to get all the work done?

So, it's actually a leasehold building at the minute

-and there are 68 years left on the lease.

-OK.

Before it went to auction, we had a chat with the council about it

because the council own the freehold.

They have agreed to sell me the freehold,

so we have to get an independent valuer in to come and value that.

So, depending on what that comes through as,

we're hoping between 50,000 and 70,000.

OK. That's healthy.

-Yeah. Healthy budget.

-That's a healthy budget.

-We want a nice place.

-Yeah, exactly.

What kind of finish are you looking for? What kind of finish?

So, we tend to go for whitewash walls,

then a feature wall of some colour,

nice, brand-new furniture, pictures on the walls.

A young professional sort of vibe.

So what was your background? How did you get into property?

Always had an interest, and then went to university for five years

to study to be a vet. Of all things, as you do.

So, I qualified as a vet and I was working for three years.

Very much enjoyed the practice, working as an equine vet.

But realised that I really wanted to be my own boss

and a lot of the on-call work,

it just wasn't working out on the work/life balance.

So, the plan is to get the properties up and running,

so financially that I'll be stable from those.

And then after that, hopefully doing some voluntary vet work, possibly abroad.

Really? So you'd like to go and take your qualifications...

Yeah. It's a long degree to do to not use.

So, I'm sort of thinking five years I trained to be that -

really enjoy it but being my own boss

is what I want at the end of the day,

so if I can volunteer abroad, then that'll be great.

Good for you. Is it just you in the property world? Have you got a partner?

Yeah, my boyfriend's in the property world as well.

There you go, you see.

He's actually busy today doing three barn conversions at home.

One of which will be for us

and the other two will be for his two sisters.

-Wow!

-Quite a lot on our plate at the minute.

-Good for you.

Yeah, you can say that again.

It's not as if she doesn't have any bathrooms or bedrooms to worry about here,

without adding three barn conversions!

Sarah's energy levels are impressive. So what are her plans?

Six of the bedrooms will have nice en-suite shower rooms,

and then the other bedrooms will be sharing two shower rooms, and then

another two toilets as well in the basement by the communal areas.

So does that mean two different tariffs,

one with an en-suite and one without?

Yeah. So, the double rooms with the en-suites,

we're looking between £95 and £100 per week.

Potentially able to get couples in those rooms,

rather than sort of single occupants.

And then the other rooms, which are slightly smaller,

that don't have the facilities of the en-suites,

we're looking at £80 to £85.

Sarah, tell me about the basement.

-There's a little bit of a...

-Yes.

We arrived today, and I was walking around turning the lights on

and I heard quite a loud dripping noise.

So we rushed downstairs and yes, it appears that the water system

hadn't quite been drained down properly, as they thought,

so we've had a little bit of a flood in the basement. But not to worry.

-Not going to be a problem?

-Not a problem. It's all getting ripped out down there anyway.

-Oh, so you're starting from scratch down there.

-We're having to re-tank, there's damp issues anyway,

so what's a bit more water to add to it?!

Fair enough. Fair enough. Tell me about the ground rent.

Yes, so, my solicitor picked this up, actually,

when we were going through the legal pack prior to the auction.

And it's quite romantic. One red rose is the annual ground rent.

-That's incredible, isn't it?

-Yeah. Yeah. I like that.

-A romantic gesture!

-Yeah, definitely.

Sarah, I wish you all the best. You've got all the answers, hope it works out for you.

-Thank you very much.

-Pleasure.

Now, that is one confident lady.

She knows what she wants and how to achieve it.

This project is not for the faint-hearted.

One thing she HAS got spot on is changing it into a HMO.

I think that's the right way to go.

How will she get on? We shall find out later in the programme.

Coming up, in Silverdale, I sense problems...

There's just something not quite right.

You know you get a feeling?

And could Sarah's HMO turn out to be a no-go?

The planning application actually was rejected, originally.

Time for a trip back to Tooting,

where Lucy saw a flat in an upper conversion

that was described as having a kitchen, bathroom and "three rooms".

What do they mean by "three rooms"?

Well, here's one of them. I think that's the lounge.

And then, through here, well, here are the two other rooms.

There's one of them down there.

There's this unusual little corridor area, which is quite pointless.

And, well, a partitioned wall into a tiny little bedroom.

A reconfiguration of the layout seemed to be a good idea.

There was potential living space in the loft,

if ownership could be established.

It was something new owner Charlie had already taken legal advice on

before paying £321,000 for the flat.

But the flat wasn't without risk, having a short lease of 58 years,

and the loft extension depended on planning and freeholder permissions.

But Charlie was a bit of a risk taker,

having chucked his full-time job in popcorn sales

to hopefully become a serial developer.

-OK, you've got to try and hold this job now, OK?

-This one?

-You need to keep this job.

Yeah, I know, but I will because it's me, you know.

It's... I can...

If I don't, I've got a big loan and stuff to do this,

so I really do need to do it properly

-so erm... Yeah, I think I'll have no problem holding this one.

-Yeah.

Anything that you are worried about with having purchased this building?

Yeah, the whole thing, really!

Charlie had been working as a handyman to learn some skills,

but this project would definitely need the professionals.

Charlie's timescale was dependent

on those planning and freeholder permissions.

So we've returned just over a year later

to see if the former popcorn salesman

has pulled off something spectacular or something a bit more corny.

It's all changed here.

The old kitchen and bathroom has now become a double-aspect bedroom.

And next door, the former lounge has also been made into a bedroom.

So, what about those two tiny rooms at the end of the hall?

That is SO much better.

Now we have a very nicely presented open-plan kitchen/living room.

Every inch has been maximised,

and there is even a little breakfast bar.

But that's not all this flat has to offer, because...

MUSIC: Higher by The Saturdays

# I'm gonna lift it, lift it higher

# I'm gonna lift it, lift it higher... #

Charlie has his loft extension,

and the light and feel of space is fantastic.

As well as a smart bedroom, he has a beautiful bathroom.

And along the corridor, there is a wet room,

making this ideal for sharers.

Getting permission for the dormer proved a real sticking point

due to the roof facing a different direction to the neighbouring properties.

It took three applications before it was approved.

Charlie has encountered problems with his first builder,

which cost him time and money,

so the whole process has taken 13 months so far,

with some work still to do outside.

However, Charlie has used the delays to his advantage.

Yeah, so when it happened,

the builders came in and then planning permission failed,

so the builders had got no work, so I started finding them work and

from that, I've sort of got a team of like ten guys now, who I do other

jobs with, so we are actually about to start our second loft conversion.

And we do sort of anything, you know, internal decorating, painting,

outdoor paving, basically we can do anything anyone wants,

which has sort of come out of nowhere

and I am obviously learning a lot about it,

but my skills are more in the project management,

just making sure you have the right people doing it,

and it's better than sitting at a desk, what I used to do,

so I quite like it.

Charlie may have found a job he enjoys and one he won't quit, then.

Despite wanting to do more of the work himself,

he quickly realised it was best to get in professionals

for the right standard of finish.

This also included the finishing touches to the decor,

and it just so happens his friend Alex is an interior designer.

Charlie and I have known each other for quite a long time, since we were much younger,

so we're quite used to spending lots of time together,

and I definitely felt confident being able to boss him around

and delegate when I wanted things done on the project.

She did everything inside, and I just sort of carried out the work

to her specifications, really. But it's worked really well.

I'm really happy with it

and I don't think I could have done it this well.

Well, I KNOW I couldn't have done it this well.

I'm happy with the flat.

I'd like to put some additions to it to make it a bit more homely.

But I think, as a basic starting point,

I think it's worked really well.

Alex may have had her hands tied a bit, because Charlie's budget

for the internal furnishings was a tight £3,000.

The flat was stripped back to bare brick,

and ceilings had to be lowered

to accommodate the steel support for the loft conversion.

In total, the building work has amounted to 66,000

of his total £100,000 budget, which seems great

until you factor in one more thing -

his plan to extend that 58-year lease,

which he estimated would cost £70,000.

We looked into extending the lease

and I eventually decided to buy

a share of the freehold with downstairs.

It was easier, and actually not going to cost a huge amount more.

So we now own the freehold as well.

Charlie's share of the freehold came to 42 grand,

so coupled with his £66,000 renovation budget

and his £3,000 interior design costs,

he's gone over his original £100,000 budget by 11,000.

But what a cracking job.

Will two local estate agents agree?

Having had a look around the flat, I think it's a really lovely property.

The owners have gone to the trouble to dress the flat as well, which

makes a big difference, and really makes it feel really welcoming.

The layout of the flat works fairly well.

I think that the kitchen/living room area does feel a little bit compact,

but other than that it's a nice flat.

I think the loft conversion's very good because there's lots of light.

Quite often with loft conversions,

we find that they're lacking in light.

But they've done quite an intelligent job

with where the windows have gone.

So the agents like the flat,

and think that sales-wise, it would be worth around £500,000,

which would give Charlie a £68,000 pre-tax profit.

But his ideal plan is to rent it out,

so what kind of figures could he achieve?

This flat would rent

for approximately £1,850 per calendar month.

I think this flat could rent for £2,000 per calendar month.

I was hoping for 1,800 a month,

so 1,850 or 2,000 is really good.

So I'm really happy with that.

The top figure of two grand a month

would give Charlie around 5.5% yield.

Charlie hopes to rent this out for a year

whilst he has a fixed-rate mortgage,

and then sell on if the market is right.

So, after all the experience gained,

is Charlie ready to repeat the exercise?

I am totally skint now, so er...not for a while.

But I would love to do it again because I've made so many mistakes and learned so much,

I think, touch wood, it'll be a lot easier the second time,

so I kind of want to do it again,

to put into practice everything I've learned.

And would Alex be up for working with him again?

I think that all depends on how this one turns out.

But it's gone well so far, so optimistic.

Yeah, I don't think I would have ended up

with as nice a house without Alex's input.

She's made it really nice.

-So, yeah, I hope you want to work with me again.

-Yeah.

Silverdale in Newcastle-under-Lyme was for many centuries

known as a coal-mining area.

When the pits closed, the landscapers moved in

and the former colliery is now a country park.

Well, the guide price for the property I am here to see

was just £30,000, which, for a three-bed semidetached,

doesn't sound like a lot of money to me.

The reason? Well, it doesn't look to be in

too good condition from the outside.

Boarded windows and cracked glass are never a good sign.

And I also spy a concrete base,

which could signify this house is of non-standard construction.

Just occasionally, properties that look pretty awful from the outside

turn out to be a bit of a surprise

when you walk through the front door.

But that's not the case here.

It's bad.

But what have we got? Well, there's that sort of little porchy thing

on the outside there that you'd definitely want to get rid of,

into a fairly claustrophobic little entry bit.

And then you've got, oddly, a shower and sort of...

Is that a toilet as well? No, just a shower, that's a bit weird.

Just there.

Living room, well front living... No, it's not.

I'd say it's a living room because it's got a fireplace.

That's weird. It's a kitchen.

Wow! Nothing at all is what it seems in this property.

Through from that kitchen/living room to the real living room at the back here.

Nice open fire in here. We like that.

Glassy stuff leading out to a lean to-ey thing out there.

But there's just something not quite right.

You know you get a feeling?

The downstairs area is certainly very unappealing.

The pieces of this property puzzle

are slowly coming together in my head,

but my suspicions will only be confirmed by a visit upstairs.

POIGNANT PIANO MUSIC

Wow!

That's either very dark paint on the ceiling

or something a bit more sinister.

You've guessed it, it's something a lot more sinister.

What have we got upstairs?

We've got a loo there, which is good.

A bedroom towards the front of the property there.

Another bedroom towards the back.

And you've guessed what's going on here - we've got severe fire damage.

Now, this is unusual. You would normally expect fire damage

to be downstairs because fires invariably start in the kitchens,

maybe the living room, where there's that open fire.

But clearly, this is the epicentre of where

the fire in this property was,

and you can see the kind of damage it's done.

Windows broken, blown in with the wind,

we've got holes in the floor here.

I mean, I'm treading quite gingerly.

Fire and the ensuing water damage from extinguishing it

mean it's what you CAN'T see that you have to consider.

There could be structural issues - damaged timbers, electrics,

and then factor in that this place was lying empty

for a length of time before the fire.

There could be a lot to fix

before you even get to the regular renovation challenges like layout.

And obviously, the biggest issue is this.

It's upstairs. There is, well, a toilet. That's it, though.

The shower room is downstairs,

and obviously you'd like to have those on the same floor, ideally.

But for the life of me, I can't figure out

how you would achieve that,

how you could increase the size of the bathroom.

One option could be to put the bathroom,

shower and toilet and bath into that bedroom there.

But you'd lose a bedroom,

with the resulting drop in the value of the property, or rental potential.

Take out this wall, stick it in... No, it just doesn't work.

HE HUFFS

Yes, I'm definitely flummoxed.

So, I think it has to stay pretty much as it is.

Despite its drawbacks,

this is a three-bedroomed house in a popular location for £30,000.

We called on the services of an agent

from the auction house that sold the property.

# And I can't find a reason to change... #

If this was my property,

I would look to maybe taking some walls down

to create a larger kitchen, maybe add in a utility room,

rather than the downstairs bathroom, currently.

I would also consider adding a new conservatory on the back.

I think that would add value.

Talking of value, what could the property be worth

after refurbishment?

Once renovated, this property would have a resale value

of between £50,000 and £60,000,

and the rental value

would be in the region of £550 per calendar month.

Well, it's a nice location, but this is a house

that's certainly not for the inexperienced or faint of heart.

Lots of work required to sort this one out.

Let's see who fancied taking on a bit of a project

when it went under the hammer.

Want to sell this one, can we say £20,000 start?

17? I'll take it.

£17,000.

On the front row.

At 17.

18. 19. 20? 20. 21.

The bidding is quick for this bargain basement property.

We rejoin it with the auctioneer looking for 33,000.

33, sir?

Yeah, 33.

33,500.

34? 34.

34,500.

35.

Sure? 35,000, bid's on the second row.

£35,000 once, then.

£35,000 twice.

Third and last time. £35,000...

-HAMMER COMES DOWN

-Your lot, sir. Well done.

The new owners of this fire-damaged house are old friends Jim and Celia,

who have a very interesting reason for buying it.

I met them back at the property to hear their story.

# Friends

# I got friends... #

-Celia, Jim, great to meet you both.

-Thank you.

-Congratulations.

-Indeed.

So, tell me why you wanted to buy this place.

Because he hadn't got a roof over his head.

Oh, right. Tell me more.

Well, I'd been living in Chester

for 33 years as, like, an unwritten janitor.

And the landlord decided, 86, he's going to retire.

It was a listed building,

it had to be renovated and all the occupants had to go.

And just at that time, I became ill,

and this lady turned around and said she'd look after me.

Oh, wow! You ended up looking after him?

Oh, yes. I'm twice his age.

-Right.

-I looked after him.

How do you two know each other, then?

Well, I crashed my car, the one and only time,

somebody recommended me to Jim,

I got in touch with him

and he was going to do it up, and then I heard that

he'd been on his own over Christmas,

so I rang him and said, "What the hell were you playing at?"

"Why didn't you tell me and then you could have come

"and had Christmas dinner instead of being on your own?"

So, he said, "Well, I never thought, but I could come now, if you like."

-Aww!

-Later, when of course he had to get out, I said,

"Well, look, I've got a spare room, you can have a roof over your head."

-Wow.

-And I ended up looking after him.

-Wow!

-And I've been lumbered ever since.

Talk about damsel in shining armour!

You rode in to save him.

-Damsel?! An old biddy!

-I've had to do the polishing of the armour though.

But now it's changed, obviously. I'm nearly 88. And he looks after me.

-Anything wrong, you know, he sorts me out.

-Right.

# Thank you for being a friend... #

It was Jim who purchased the house, on the understanding

that they would both live there eventually.

They also have a close network of friends and family who live nearby.

# Thank you for being a friend

# I wanna thank you

# Thank you for being a friend... #

Because she looked after me, the basic essence was a case

that she would have somewhere as a return for looking after me.

-Oh, wow!

-So that was the concept which we worked on.

I didn't think I would be still around, but I am.

And now I'm in a position where to some extent I can do something,

look after her in a modest way.

-That's brilliant.

-Yeah.

So what's the story about buying this place, then?

-Neither of us can get a mortgage. I'm too old.

-Right.

And Jim... Without an income - it's based on income,

which he hasn't at the moment - he can't get a mortgage.

So basically, this came within your price range and your budget.

Yes. Within a capital price range, with the understanding, of course,

-that we're going to spend a lot on it.

-Yep.

-That's the point.

-Right.

Setting aside a budget of £10,000,

Jim and Celia hope to have the renovation completed in six months.

Jim will do all the work,

although Celia is determined to help in any way she can.

Top of the list is to make the place safe and secure.

If the building is causing a danger or blighting an area,

then the local council has powers to ensure repairs

or demolition can be carried out at the owner's expense.

The council had served notice on this as a dangerous property,

which had been declared in the legal pack.

So, Jim will be getting windows and fences sorted urgently.

What was it about this house that you liked?

I think I was a bit mesmerised at the state of it.

And I walked upstairs and I looked through the small bedroom

and I looked at the views across the way

and I thought to myself, "That's lovely views."

And we'd seen other properties,

and none of them had the sort of feel that

this one did, even though we had to bear in mind

that it was in such a state.

So what about the layout of the toilet facilities?

The toilet upstairs and the shower room downstairs.

-What are you going to do about that?

-It's ridiculous.

There's a toilet upstairs but no hand basin.

You can't have a toilet without a hand basin.

So we're going to put a sliding door,

so that we can put a wash basin in the upstairs toilet.

And also, I'd like to have a downstairs toilet as well

because I don't like going upstairs at my age.

Well, listen, congratulations. Good luck with it.

-Really look forward to seeing how you get on.

-Thank you very much indeed. Appreciate it.

Well, what a lovely story.

But a lot of work needed to sort this place out,

and I'm really not sure that £10,000 budget is going to cover it.

You can find out how Jim and Celia get on, though, later in the show.

We've found out how one property's turned out.

The clock is ticking - let's find out how the other two got on.

Will there be champagne corks popping

or will things have fizzled out?

Let's have a look.

Back now to Liverpool, where earlier,

I looked at this nine-bedroom house close to Newsham Park,

bought by Sarah for 190 grand.

Sarah, a former vet, had already got ten other properties

and intended turning this one into her biggest HMO,

which is a house of multiple occupancy.

This has got huge amounts of potential to develop into, hopefully, 11 bedrooms.

And who's going to do the work for you? Have you got a team of builders

-or are you going to get stuck in yourself?

-No, not me. Ha-ha!

Yeah, I've got a fabulous group of builders

who've been working on my other projects,

so they're going to move in here as soon as the planning's through.

And hopefully, sort of three to six months

for them to turn the place round.

-Really? That short a time?

-Yeah. That's the plan.

In fact, we're back just over a year on, so it did take more time.

And there aren't 11 rooms.

But we do have Sarah's top ten,

so let's do the countdown from the top.

MUSIC: Top Of The Pops Theme

And missing any bedrooms with tenants, at number nine,

what WAS ginger peachy is now yellow counterpane with matching chairs.

Number eight, last time, pink with green skirtings,

now gingham style by the three poppies.

And lavender blue gets replaced by an en-suite.

Down the landing, and purple haze has left the building

to be replaced by number seven,

yellow and grey harlequins with rejuvenated shower room.

Down to the first floor, six is tenanted, so on to number five.

Which had the green, green paint of home.

It's now olive-green, and desk with a view.

The last first-floor bedroom is number four,

with "We fade to grey".

But the bedrooms aren't the only changes up here.

Out with mellow yellow, and in comes communal kitchen with twin toasters.

The ground floor's three bedrooms are all occupied

but we CAN see the communal lounge,

with four two-seaters.

In the basement, twin toilets move over for the laundry and loo.

And finally,

what was a flooded basement is now

a new lower ground kitchen

with oodles of drawer space.

But what happened to bedroom number 11?

The planning application actually was rejected originally

for the 11 bedrooms.

Despite having written confirmation previously from the council

to say that we would be OK for change of use.

However, it was the local residents and local councillors that had the

issue, so I had to hold a residential meeting. And from there,

we discussed the plans for the property

and the local residents wanted private bathroom facilities

for each individual person,

so we went back to planning with ten bedrooms, ten bathrooms,

and that was then put through.

So, unforeseen planning caused the six-month delay.

I had wondered if that lift might be a maintenance liability,

so what have they decided to do?

It was decided in the end that the maintenance issues and the potential

that tenants on a Sunday night could get stuck in the lift,

we decided to fireboard over it and get rid of it.

There was talk of purchasing the lease,

and therefore avoiding

paying the one red rose ground rent.

What happened there?

It's Liverpool City Council that own the freehold of the building.

So my solicitor has been liaising with them to purchase the freehold.

Which we now have agreed, which including their solicitors' costs,

is £12,500.

So, have you gone over budget?

The original budget was 50,000 to 70,000.

We have gone over budget, to 85,000,

but that does include the additional bathroom facilities that were

necessary for planning and also the buying of the freehold.

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

of the property and its values.

My first impressions of the property

is the developers have done it very, very contemporarily.

Lovely colours,

ideal for young professionals. And quite on-point really.

The kitchens are really very, very modern and clean and hygienic.

And the bedrooms have got good space.

Standard of finish is to an acceptable level,

it's not fantastic.

But really, when you overspend, that cuts into your profit.

So I think all in all, a good job.

If Sarah wanted to sell, what kind of market would it appeal to?

The demand for properties

like this from investors is huge at the moment.

Our overseas market is fabulous.

It's going to achieve around about 10% or 11% as a return for them from

their investment. So all in all, there are a whole cross-section

of people who would be interested in this type of investment.

Sarah's total investment amounts to 275 grand.

The rental on a property like this per room

is around £60 to £65 a week.

And per calendar month, around about £350.

Roughly speaking, you'd be talking £240 per calendar month per room.

We are actually getting a lot more than that.

The two bedrooms that have the bathrooms across the corridor

are £95 per week. The double rooms with couples in,

which we've got four of, are £130 per week.

And the other four bedrooms are £105 per week.

So Sarah is getting an annual yield of just short of 20%.

Wow! But if she were to sell...?

In the sales market, this property would be very, very popular to investors.

I would think we would be looking to achieve

between £325,000 to £350,000.

As far as sales market is concerned,

there would be no difficulty in finding a buyer at around £320,000.

Again, with the top figure,

a potential profit, before taxes and expenses, of 75 grand.

What do you think, Sarah?

Well, my thoughts on those valuations are that it's a difficult property to value.

Because nobody would purchase a property to live in themselves,

so the real value is as a business.

And the way it's set up and running as a business

and the rates that I'm getting, I've actually had it commercially valued at 450,000.

But why sell something that's generating that level of income?

You'd just want to invest in more like it.

We're already on with another investment property just over the road from here,

which is going to be a six-bedroom en-suite HMO as well.

Sarah, do you ever rest?

By the way, how are the three barn conversions going?

Myself and my boyfriend, Josh, are moving into our new-build barn

this week. That's an ongoing project for 18 months,

but we are really looking forward to that.

And also, a bit of a break and going on holiday.

Well, if you do get bored,

you can always do some voluntary veterinary work.

Back now to the former mining village of Silverdale,

Newcastle-under-Lyme.

Back in 2014, I looked around this three-bedroom semi.

Now, just occasionally, properties that look pretty awful

from the outside turn out to be a bit of a surprise

when you walk through the front door.

That's not the case here.

The property had been empty for some time

and had suffered significant fire damage,

so being of a non-standard construction and having a terrible

layout were the least of its problems.

Deciding to take on the challenge were Jim,

along with his friend Celia.

Jim paid £35,000 for what he hoped one day would be their home.

So what was it about this house that you liked?

I think I was a bit mesmerised at the state of it.

And I walked upstairs and I looked through the small bedroom

and I looked at the views across the way and I thought to myself,

"That's lovely views."

And then we'd seen other properties

and none of them had the sort of feel that this one did,

even though we had to bear in mind that it was in such a state.

Their original timescale was six months.

We are back almost two years later.

Jim's doing the work HIS way.

It is work in progress,

and it'll be some time before Jim and Celia get to move in.

If you buy a fire-damaged property,

bear in mind that its services

may have been disconnected for safety.

Gas and electric in particular

in an empty property don't make good bedfellows,

and are a tempting asset for squatters.

Jim has had to prioritise the work,

so he made sure the building was made secure.

So if anybody tried to walk into the property or anything else

like that, it wouldn't be hazardous,

as there's a dangerous properties order on the property,

due to the fact that the doors were all smashed and the windows were,

you know... It was a hazard.

Jim is still assessing the extent of the damage,

before calling in the professionals

to sort out the electrics and heating.

At present, it's difficult to be in the house for any length of time.

There's no water, there's no electricity, there's no gas.

There's nothing.

You might as well be in a cave, except it's got carpets.

So, we can see where Jim has been busy, but what about Celia?

I've not done very much at all.

Shall we say, it's been moral support.

Well, on a project such as this

moral support is a much-needed asset,

especially, I would imagine,

when it comes to sticking to the £10,000 budget.

How's THAT been?

Currently we've spent approx... approx 1,500.

There's a tool box with a load of receipts there,

which Celia'll do all the accountancy at the end of it all.

What are the main cost items that are still needed?

We're looking at the central heating, combi boiler,

some plastering, whatever it is that I find on the electrics

that needs expertise on it.

Then we're down to decorating,

so I think we're still on cue for the budget

that we originally turned round and thought it was going to be.

Jim had time in hospital himself

and looks after Celia, based near Manchester,

and sees to his elderly parents in Chester.

He's got to look after them and he's got to look after me as well.

And do this at the same time,

so it's taking a lot longer than we expected.

Although it's been unavoidable,

has the overrun of 18 months to get the work to this stage

caused any friction?

I've not fallen out with him.

Yet. For the time being.

-But watch it.

-That's it.

In 1955, Celia's first four-bedroomed house

in an upmarket area cost her £2,500.

So, how does SHE feel about the cost of this project?

I am quite horrified at the telephone number rate

of the cost of things now.

The cost of houses, I mean...

Fiddly little things like this.

You could have bought it for under £200.

So having, what, nearly 90 years of living with that knowledge,

it colours my outlook completely.

Here to perhaps colour Celia's outlook even more

are two property experts

we've invited to give their opinions and telephone number valuations.

What could be done is

the first floor to be knocked about a little bit

so that we've got a bathroom upstairs.

It's got very good parking facilities,

and the internal accommodation is a good size.

Just needs finishing off to a good standard.

It seems unlikely that Jim and Celia would rent the property out,

but let's find out if we can tempt them.

On completion of the works,

I'd recommend a rental figure in the region of £475 per calendar month.

Once the work's completed on the property,

we would place the property for rent

somewhere in the region of £450 per calendar month.

-We're not going to rent, are we?

-HE CHUCKLES

Then you're probably not going to sell either -

but we'll give you those values too.

However, one thing that WILL affect the valuations

is the non-standard construction of the property.

Prefabrication reinforced concrete,

or PRC construction, like this can be made mortgageable

with the addition of an outer skin of bricks to the walls.

Once completed by a recognised repairer,

an engineer will then issue a PRC certificate.

Jim and Celia aren't bothered about doing this work,

as their intention is to move in,

but to get the top valuation,

let's assume that the work has been done.

Once the work is completed and deemed mortgageable

with a PRC certificate, we would look to place the property

on the market somewhere in the region of £75,000.

On completion of the works,

and if a bathroom was installed on the first floor,

I would recommend a sale value of £80,000.

Fair enough.

HE CHUCKLES

-Modest words. Yeah, fair enough.

-Yeah.

Hopefully it won't be an issue,

and Jim and Celia will be able to move in before too long.

Well, that's it for now.

We'll be back with more auction action for you next time.

Yes, from bungalows to basements to building sites,

-you get it all here on Homes Under The Hammer. See you later.

-Goodbye.