Episode 51 Homes Under the Hammer

Hello and welcome to the show. Now, year-on-year, people are choosing

bricks and mortar as their favoured way to invest their money.

Yes, and if you're looking for potentially good returns

and a decent yield, then, I believe property auctions are the way to go.

But do remember to do your homework, because it is really good to know

what you're getting into if you buy under the hammer.

If you're thinking of taking on your first property project,

be careful not to bite off more than you can chew.

Yeah, it's good to have an ambitious start,

but make sure you can afford what you're getting into

in terms of both time and money.

Yeah, let's find out what our three sets of buyers tackled on today's programme.

In Haslington, Cheshire,

I'm finding solutions to problems and playing the name game.

Bob's your uncle, Dion's your presenter.

You can't solve the location issue at this Maryport, Cumbria property.

It's in a cemetery.

So it's not going to be to everyone's taste.

Perhaps more to everyone's tastes is a near-perfect house in Derby.

Whoever buys this house, well, they could be sitting pretty.

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.

Third and final time...

This is Haslington, a historic village in Cheshire

about two miles north-east of Crewe.

Now, you wouldn't know it from these tranquil scenes,

but this village has a violent history.

During the English Civil War,

this area was a site of various attacks and skirmishes

between the Parliamentarians and the Royalist troops.

Thankfully it's a lot more peaceful today.

I am half a mile from Haslington

and what I'm here to see is a two-bed terrace cottage

that has a guide price of £69,000.

What I can see, it's very pretty.

Let's hope the inside is just as good.

OK.

Right, outside, very pretty-looking cottage.

Not so pretty in here.

Actually it's pretty dated.

It's pretty dark and that doesn't look too good, either.

That...

HOLLOW KNOCKING

..that is rising damp,

and if you look at how this paper has come way, you can actually see

underneath this paper. Look at that.

Look at that, that's just falling away.

That is not good.

If we look underneath this carpet, look at that flooring

they're covering up just there.

That is original flooring and that won't have a damp course going through at all.

What a pity. Get that cleaned up and it would be very, very nice.

Not a bad size front room, though.

Into the second reception room, again you've got a fireplace there.

Underneath here you've got a bit of cloakroom space under there as well.

A small second reception room

and further down on the right-hand side you have the stairs

going up to the bedrooms, and then at the end of the house

you have got the kitchen.

And it's incredibly tight, incredibly small.

How can you create a bit more space in here?

Shall we look outside, see what we find?

Follow me. Follow me.

Come on. Around here, round the door.

That's it. Perfect, you can do it.

What else have we got?

So here we've got a building that has been put on a little bit later

and what have they put in here?

A downstairs toilet.

Now, if there's a toilet upstairs, we can get rid of that,

create a little bit more space inside the kitchen,

make this inside space,

put a window in there to look over the garden.

Bob's your uncle. Dion's your presenter.

MUSIC: Easy Like Sunday Morning by The Commodores

Oh, I make it sound so easy.

But that's my job.

But it's someone else's job to make it happen.

-# That's why I'm easy

-Ah-ah-ah-ah... #

Right, upstairs we've got two bedrooms.

Just here we have the front bedroom, a double bedroom, it's a good size.

There are lots of cracks in the walls there.

I think it is basically old plaster because of the age of the property,

but it is always worth getting it checked out

and always check the roof as well.

Not a bad-sized room.

Bedroom number two, again, not a bad size.

But there's a bathroom.

Your bathroom is off your bedroom.

There's a way and a solution you could NOT walk through this bedroom

and get to the bathroom. You could quite easily...

Oops. There is a hole here somewhere.

There it is. Just there.

Need to watch my footing.

Nearly went in there. Right, you could easily put a wall along here,

all the way along, all the way along,

and then put the door to the bedroom just there.

Therefore that would give you a separate corridor

going into the bathroom.

Now there's an expensive way of doing that.

You could get the specialists in, you could get the professionals in

and they'll tell you how much it is going to cost,

where walls need to be.

There's also a very clever and a lot cheaper way of doing it.

And you get to know your neighbours as well.

Chat to the neighbours!

Find out how they came up with a solution

with this same problem.

This is a row of terraced houses.

They'll all have had this problem to deal with.

And you might even get a chance to see how they finished it

and then you could choose a solution which suits you best.

And it won't cost you anything.

# And I want to be free... #

A slightly more urgent issue is the cause of that hole in the floor.

Woodworm. You can see here, this piece has already come away.

There's lots of little holes in here.

This is the larvae from the woodworm that's causing the problem.

I would suggest that you replace the damaged wood and treat the rest.

And I'd also recommend a survey

to see if it's anywhere else as well.

What can an agent from the auction house who sold it tell us about

this property, guided at 69 grand?

It's a typical workers' cottage, probably built around 1860, 1870,

that sort of period.

It needs a lot of work doing to it, obviously.

I don't think a great deal has been done since it was built.

Pretty much needs going back to brick, I think, and starting again.

Indeed, there's a lot to do.

What could this house be worth when renovated and complete?

Once the property is completed,

I would say the property would be in the region of £110,000.

And what about the rental value?

It would rent really easily in Haslington, actually,

and it would achieve probably around £525 to £550 per calendar month.

I actually really like this little terraced cottage,

and it's in a very nice village as well.

But it does have its problems.

Who was willing to take those problems on

when it went under the hammer?

65, can I start it at 65?

Thank you. 65, seated, at £65,000.

70 can we see now?

70. £70,000.

75, sir?

71.

71.

One to you as well, sir, 72. 73. 74.

75. 75.

76, seated left. No?

76, first bid.

£76,000.

77 anywhere else?

Are we all done then at 76?

At 76 then for the first time.

£76,000 for the second time.

Third and final time, £76,000.

Your lot, sir. Well done.

# It's a long, long way from home... #

That final bid was made by Paul and Maria,

who have a small portfolio and hope to add this one to it.

The interesting thing is their other properties are

in and around Southampton, which is 200 miles south of here.

I met them at the house to find out a bit more.

-Paul, nice to meet you.

-Thank you, Dion.

-Maria.

-How do you do?

Nice to meet you, and congratulations to both of you.

Thank you.

So, hold on, I'm trying to figure this out. Southampton and Crewe.

Where we live, the property yields just aren't very good at all,

so we decided to look a bit more towards the north.

In the honest truth, this was the first property that we looked at

when we came up to Crewe

on a very wet day.

We walked in here and I said to my wife as we walked out,

"There is no way we are buying this house. There's too much to do!"

-Is that what you said?

-Yes, that's what was said!

Anyway, what are we, six weeks later? Here we are.

And here we are on this show.

We think it's a lovely village and it will rent out easily.

It's an up-and-coming village and what's not to love about it, really?

-Very pretty, isn't it?

-Yes, very pretty.

Lovely, lovely little village location.

Just outside of Crewe, a couple of nice pubs down the road, you know,

what more could you want?

There's always a common denominator in buying a property.

You've got to have a nice pub nearby!

It's now yours. You're three and a half hours away from home.

What are you going to do with this property?

I think the main problem we've got is the bathroom being off one of the bedrooms.

We've got the idea of taking some room from the second bedroom,

or alternatively turning the stairs round and taking some room

from the, from this room, up, so that's our first issue.

OK. There's a few other issues.

I've had a wander around. There's a few bits and bobs.

You've obviously noticed those other issues, yes.

Well, it's a total replastering job to start,

all the way through.

A loo that attaches to the back of the kitchen.

We're probably going to move that back,

but the main thing already goes from upstairs, what we do there,

because if we put the stairs going from the front, upwards,

we're then going to lose part of this room,

which then means probably we'll have to take out that chimney breast.

And it's a double chimney which backs onto next door,

which then gets its own problems there.

-Ah.

-Behind, there's a chimney breast there - that's a single one

which we'd like to move

and if we do the corridor by leaving the stairs where they are,

then we can then take out that chimney breast,

which will give it a bit more room in there.

-Yes, just to create that little bit more space.

-It's not perfect.

-It's not huge, but it's a bit of space you could do with.

-Yes. Definitely.

It'll help with putting a bed in there, flush against the wall.

Very flush, your bed!

LAUGHTER

Little bit of rising damp as well.

You noticed that as well.

Yes, I've noticed that. We'll get to that in a minute.

The cracks are not worrying you at all?

We think it's just a question of replastering,

and we have noticed the damp and we will get that looked at and fixed.

What are you going to have to spend on this?

Well, we've been talking and I think, realistically,

it's going to be about 20,000,

with a contingency of five sitting in there as well,

because we don't know what we're going to find.

The woodworm problem, that might bring extra problems.

-Sorry about that.

-Yes, it's fine.

Any reconfiguration down here?

Down here I think it depends what we do upstairs,

what we do with these chimney breasts.

We did say we were going to knock down this wall here to make it all one through room.

-OK.

-I'd forgotten that.

-Quite a few of the properties along here

have done that and it's really nice.

-That'll create a lot of space, won't it?

-It will.

-Yeah.

Paul and Maria have a decent amount of work ahead of them,

including fixing that woodworm problem.

And they're allowing themselves eight months to get all the work

done, because they live three and a half hours away.

They're going to have to find a new build team

but they have found a project manager, which means

they can carry on with their day jobs in the finance sector

and look after their other properties.

But just in case you thought they were being a little bit tardy...

We've already put an offer in on another property, actually,

in Crewe, which has been accepted, so two now.

-Well, I wish you all the best.

-Thank you.

You have been taken out of your comfort zone, so to speak.

-You're giving it a go.

-You could say that.

Pretty much like me.

THEY LAUGH

-Good luck.

-Thank you.

-All the best.

-Thank you.

-Good luck.

-Thank you.

So, Paul and Maria are experienced property developers,

but they've never bought a property up north before.

They've also never bought a property with so many issues they're going

to have to overcome - a bit of rising damp,

they've got woodworm upstairs

and they're going to have to figure out access to that bathroom

without going through a bedroom.

How will they get on with this long-distance development?

You can find out later in the programme.

MUSIC: My Heart Will Go On by Celine Dion

Today, I'm in Maryport on the southern tip of the Solway Firth,

in beautiful Cumbria, surrounded by

an Area of Outstanding Natural Beauty.

The town itself is a Georgian place, well preserved.

It's actually most famous as the home of Thomas Henry Ismay

of the White Star Line, famous, of course, for the Titanic.

Let's hope today's property has a slightly happier story to tell.

But where Ismay invested in boats, I'm turning my course more inland.

Well, the property I'm here to see is certainly unusual,

I'll give it that. Good news to start off with -

it's got great views of the sea and the local golf course.

Bad news is it's actually the lodge of the local cemetery.

So it's not going to be to everyone's taste.

Well, it's certainly a unique location,

but it is not looking too inspiring from outside.

Still, two bedrooms, two reception rooms, guide price was £50,000 to £60,000.

Dare I take a look inside?

So through the front door you've got a large reception room to the right,

and then this smaller one to the left.

Now, it is all a bit dark and dingy but that is partly because the windows

have been boarded up,

but the whole house has a sort of slightly cramped,

dark, labyrinth-type feel to it,

which I don't know how you'd sort out.

Nowhere more so than at the back here, because you come through

what I imagine was the rear entrance to the property

into what I think is some kind of an extension.

As you can see, it is in a bit of a state.

All the ceilings really bowed,

so you're going to have to do work in here.

But all in all, not really getting a good feel from this place, yet.

# You either like it or you don't like it

# I know because I see it... #

This certainly isn't for everyone and it's not just the location that

could put you off this lodge.

It's in a right state.

This really needs to be taken back to the bare brick and given a fresh start.

Plumbing, damp course, plastering, the lot.

Upstairs, two bedrooms and, a bit like the rest of the house,

it's a case of good and bad.

Bad, well...

..look at the state. Obviously a major damp problem here.

On the walls, doesn't look like the ceilings are in that good a state

and I'd be concerned about the floorboards.

That's the bad. The good news, well, nice, high ceilings

and things like the original shutters there.

Lovely features,

and then the view out of the window, across the golf course,

the Solway Firth, priceless.

# You've got a beautiful view

# You're gonna shake it off... #

The view on the inside is less impressive.

It looks like lots of work and expense

and then there's that other viewpoint.

Well, when you're buying a property like this,

especially in a location like this, you're going to have to be really,

really careful about several things.

One of which is where the boundaries to the property lie.

In this case, you have rights of way down this little pathway,

you own part of this grass area here.

Obviously you're bounded by the road on that side, but then

question marks about the front of the property, so it's all something

that your solicitor will have to work overtime on

and you must, must, MUST read the legal pack.

The other issue is what you can and can't use this property for.

Clearly you have to be very sensitive about the fact that you are next to a graveyard,

so again, it's things which really need to be considered

before you buy this property.

This won't be straightforward.

The cemetery is a publicly maintained space

and will need respecting.

So permissions will need to be obtained for all manner of things,

and I suspect just putting a skip near the building will need permission.

Noise disruption will have to be kept to a minimum,

so I hope whoever buys it likes paperwork,

because I expect there may be a fair bit.

# It's too complicated It's too complicated

# I just wanna know the score... #

But will these complications be worth overcoming?

What does the auctioneer that sold it think?

It wouldn't be a mainstream property,

but I think there is a strong demand for unusual properties.

And if you looked in a westerly direction,

you'd see the Scottish hills which has got to be a positive.

The outlook might be positive from his point of view.

I am more interested in its financial outlook

for a property that was guided at 50,000 to 60,000.

I think the end value, depending on the spec,

would be in the region of £150,000.

I think the potential rental income would be in the region

of £550 per calendar month.

Well, for lots of reasons,

this house is not going to be everyone's cup of tea.

There is a lot of work to be done and obviously the location

won't suit everybody. Still, the guide price was very reasonable,

so let's see who was tempted when it went under the hammer.

This is a good one, ladies and gentlemen.

Last quoted guide, then, put me in, 60?

55.

55 I've got.

At £55,000 to the rear.

55, I'll take it in twos.

57 I've got. Can I say 59, madam?

And 61 shall I say?

61 and a half. 63.

65.

At £65,000.

65 and a half, I'll take it.

Might be too early but I'll take it.

66 and a half.

Shake of the head at a half.

At £66,000.

66.

Last time England had a team.

At £66,000, all done?

First time, second time, third and final time.

GAVEL BANGS

And the happy, successful bidder for the Maryport lot was Ali.

# You know I'm happy now You know I'm happy now... #

And I met her back at the lodge to find out why she was so pleased to get this unusual property.

Ali, lovely to meet you.

Congratulations.

Tell me why you wanted to buy this place.

Price, really. And I wanted,

the only really way I could get somewhere to do up was somewhere

a bit quirky that other people might avoid.

And something with a lot of work, just to make it cheaper.

-It's all three of those things, isn't it?

-Yes.

Quirky one that people want to avoid and does need a lot of work.

Are you up for a challenge?

Yes. Just as well!

THEY LAUGH

Tell me a bit about you.

I'm from the north-east. I ran a restaurant there for 19 years,

put it on the market when my mum became ill a year ago

just because your priorities change when that kind of thing happens.

Sadly, we lost her. I was going to come and look after her

but we lost her and I thought, just keep going with the sale

and have a lifestyle change.

So I came over here and I've been renovating my mum's property,

which has been left to me and my brother,

and that's going to be a holiday rental in the Lake District.

So I'm just about finished doing that one,

so it's time to do something else.

Now, location.

It's beautiful here. We've got the golf club, we've got the sea,

it's beautiful here.

You've skipped merrily over the fact that it's on the cemetery.

Yes!

Mention the sea, mention the golf course, but don't mention the cemetery!

Did that not put you off, at all,

that it's on an active cemetery?

It didn't put me off. For sale in the future it might.

Rental, I don't think it'll matter that much.

I think it would make a good holiday rental with the golf course and the beach.

-A holiday rental?

-Well, if you wouldn't want to stay here for good,

you could stay for a week and then leave.

People like quirky, don't they?

They like staying in castles, they like staying in windmills,

so, hey.

Speaking of windmills,

it's easy to see why Ali is a big fan of this quirky property.

But as she is no longer running a business,

getting finance on this lodge was tricky.

The banks, building societies, wouldn't touch me, really.

Because until I start getting something going with

renting my own house off, renting Keswick off, I have no income kind of thing.

So how did you get the money at all?

Through an independent mortgage advisor.

If you hadn't got the money...?

It would have been a real worry.

I probably would have had to either lose my 10% or try and get the money

elsewhere like credit cards and balance transfer

until I got some rent coming in and then I could reapply for a mortgage.

It was a problem. It was a worry.

OK, wow. What about the complications of buying somewhere like this?

I imagine the definition of where your land begins and ends has been quite interesting.

Yes, and then there's public rights of way as well, round the side,

so it is awkward. It's not a normal, cut and dried property.

So tell me what you're going to do to sort it out.

I think all the plaster's going to have to come off.

It's pretty much a mess inside.

I'd like to try and squeeze a bathroom in upstairs if it's possible.

Then I could open out to all the back area.

The back bit's more modern. It doesn't look too nice,

so I'd like to try and tidy it so it looks more like the original age of the building.

Ali is not totally sure about budget or timescale.

She vaguely thinks 15,000 to 20,000

and maybe up to a year to do the work.

And then this would be a holiday let,

blimey, with a difference!

And how hands-on and day-to-day are you going to be involved in it?

I'll do as much as I can. I'm good at donkey work - decorating, tiling,

bit of basic woodwork, that kind of thing. I enjoy doing it, so...

And living here at the same time, or not?

I'll probably have to, actually, just to make sure

the place is safe and sound and secure.

But I'd prefer a bit of a bathroom in first.

There's not a lot there, unless I use the sea.

It's a bit of a long hike.

Well, good on you. You've got a few challenges ahead but we're really

looking forward to seeing how you get on. We wish you all the best.

THEY LAUGH

-Good luck with it.

-Thank you.

Thanks.

-Hmm.

-HE SUCKS HIS TEETH

Well, whilst I really admire Ali's optimism, I am sure you will agree

there are a lot of hoops to jump through

before this place becomes a holiday let.

How will she get on?

You can find out later in the show.

Coming up, this three-bed in Derby leaves me FLOORED with its features.

They are SO highly sought after and look at these wee fellas.

But has Ali found the ceiling of her budget in Maryport, Cumbria?

The money, you've used half of it to live on

while you're waiting for everything happening.

Now we head back to Haslington near Crewe in Cheshire.

This two-bed cottage had a guide price of 69 grand.

It has some hidden gems and some hidden nasties.

More obvious problems needed addressing,

like the old bathroom off a bedroom conundrum.

Put a wall along here, all the way along,

all the way along, and then put the door to the bedroom just there.

Therefore that'll give you a separate corridor

going into the bathroom.

# So no problems, no problems

# Only solutions... #

And I was on a roll when it came to solutions for that cramped kitchen.

The answer was out the back.

Downstairs toilet.

Now, if there's a toilet upstairs, we can get rid of that,

create a little bit more space INSIDE the kitchen,

Bob's your uncle,

Dion's your presenter.

And Paul and Mary were the buyers, paying 76 grand.

They had come all the way from Southampton

to start a rental portfolio in Crewe

and Paul felt they may not have got off on the right foot.

The honest truth, this was the first property that we looked at when

we came up to Crewe on a very wet day.

Walked in here and I said to my wife as we walked out,

"There is no way we are buying this house. There's too much to do!"

-Is that what you said?

-Yeah. That's what was said.

By hiring a local builder,

doing a bit of the work themselves and spending 20 grand,

they hoped to get this place ready in about eight months and tenanted.

After a year, we are back.

So how have they got on?

# Lucky for you that's what I like That's what I like

# Lucky for you that's what I like That's what I like... #

This downstairs looks so much better.

A bigger and brighter living room and an extended kitchen.

# That's what I like, lucky for you That's what I like

# That's what I like... #

I think we basically created a silk purse out of a sow's ear, to be fair.

Effectively, as you walked in before, you had two rooms and we've taken

down the dividing wall, so we've made it into one room.

The main thing which is the thing you don't actually see, because it's

hidden by the new carpet, is the fact that the whole of the floor was

excavated and obviously a damp-proof course has been put in.

So when we first bought the property, there was a kitchen which adjoined

an outside toilet which could only be accessed by going outside.

So we've knocked the wall down between those two buildings

to merge the toilet with the kitchen,

creating a bigger kitchen and added an extra window in there to create some more light.

They promised to fix the layout problems upstairs.

# I'll never make a promise that I can't keep

# I promise that your smile It'll never be... #

And they have done just that.

You no longer have to walk through the bedroom to get to the bathroom.

# That's what I like That's what I like... #

So what's changed upstairs is that we put a corridor in, so that you

have got separate access into the bathroom.

We put new windows into the front bedroom,

we've replastered all the walls

and put a new bathroom in with a nice skylight.

The house and the back garden are now in great shape.

But it's taken a year to get here,

rather than their initial eight-month plan.

Finding a builder was the biggest challenge to begin with.

That took us a few months, hence why it's taken us a year.

There's one rule in this business, effectively.

If a builder's ready to work straightaway, you don't use them.

That's the main rule, because you know there's so much work about.

An awful lot of work has been done.

They gave themselves a 20 grand budget and a five grand contingency,

so did they stick to it?

When I originally looked at the budget, that was on the basis that

I would do quite a bit of work myself, bringing a friend up.

Given the distance and given his other commitments, we couldn't do that.

We had a builder in and so he was effectively project managing,

which added another layer to the costs.

And at the end of the day, we didn't quite make the 20,000,

we actually made it for somewhere between 33 and 34,

so a bit of an overrun.

And while they've got a great finished product,

over time and over budget might have led to some short tempers,

so how have they worked together?

Paul's really bossy, so I just do as I'm told.

I'm not making any comment!

I don't consider myself bossy at all.

I just consider that I give the appropriate direction

as and when required!

SHE LAUGHS

Well, it's time to find out if two local estate agents think

this property is, as they say in these parts, "boss",

which, if you're not familiar, means "outstanding".

The layout change is brilliant, really,

because obviously it's sort of quite old-fashioned to have to go to the

back, to go through a bedroom to get to the bathroom,

but the thing that I've noticed is, for example, the finish.

The doors are of really high quality.

And especially the changes they've made to the kitchen,

it's made it so much more of a usable space.

The house is very, very nice.

What they've done to it is very fashionable with all the grey tones

that they've used. The selling points of the property are

the house is absolutely ready to move into.

Haslington is a very popular village.

The schools are very well regarded

and there are several large employers

that work within easy travelling distance from the property.

Maria and Paul have spent £110,000

and the agents think it could fetch a top figure of 120 grand on the resale market.

That overspend has left them little room,

as that would mean a profit of ten grand

before the usual taxes and expenses.

But perhaps that great finish will aid the rental figure

and that's really what they're looking for.

As a rental, I would ask somewhere between £575 per calendar month

to £595 per calendar month and I would expect to get absolutely that.

It's in beautiful condition.

We have a similar property on the rental market at the moment

that's on the market for 595 per calendar month.

Well, I think that's spot-on, to be fair.

We were thinking 575 to 600.

When we've reviewed the market, it's around those figures,

so I think that is spot-on.

Yeah, so we're pleased with that.

£595 per calendar month would give them a yield of just under 6.5%.

This is the first Crewe addition to their portfolio,

so what are their feelings about this project?

We feel quite pleased that the project has now finished.

There are a few things that we may have done differently, but

at the end of the day,

it's a two-bedroom terrace and it's quite nice.

We're quite pleased with what we've achieved

and we've learnt a lot on the way.

A connection with Derby and deer might not immediately

spring to mind, but some believe that the origin of the name

of the city could derive from an old English word, Deorby,

meaning Village of the Deer.

Nowadays, Derby's a thriving city in the heart of England,

popular with commuters and students,

so will today's property BUCK any trends or have me FAWNING over it?

OK, I'll stop with the deer thing now!

Just two miles from the town centre,

the property I'm here to see should be an attractive proposition for

developers. It has its own front and back garden and three bedrooms,

so it would make an ideal family home too, so, on paper, pretty good.

The guide price was £99,000 plus.

Let's find out what you get.

MUSIC: Fool's Gold by The Stone Roses

Look! Look at these amazing tiles!

They are SO highly sought-after.

And look at these wee fellas - they're in brilliant condition.

You don't find many things like this in such good condition after, what,

over 100 years?

There's character to this property already.

You just get a feeling when you come in a house and the feeling's good here. You've got archways.

The paint is in really good nick, good condition.

And through to your reception room, where there's been two rooms

at one stage and opened up to have this amazing feeling of space.

You have furniture which, you know, nothing wrong with a lot of it.

And the kitchen? Well, to my right...a basement...

..always good news. And then the kitchen itself...

..is pretty special.

It's so easy to say, add the wow factor, get a new bathroom,

get a new kitchen, but why take this out when it's clearly got so much love around it?

The only negatives I can see so far,

the flooring's a bit dated and cheap.

You've got linoleum, you've got laminate flooring.

You could upgrade that.

You could maybe upgrade your surfaces,

but pretty much all smiles from me.

Wow, you could move straight in here!

The flooring could do with an update,

but other than that, this is great.

Happy days!

# Sunday, Monday, happy days

# Tuesday, Wednesday Happy days... #

Upstairs, starting at the back of the house, a small bedroom,

no more than a single. The bathroom?

Perfectly usable, but you'd probably want a new suite in there.

What is a bit of a problem, the first one I've spotted, is some damp.

You want to investigate that.

It doesn't look too serious - fingers crossed it isn't.

And then, OK, a good size.

That's more like it. A good-sized double bedroom.

A lot of pine furniture,

which lends me to think that perhaps

this was last decorated in the '80s,

but pine furniture, although not in vogue just now,

can easily be upcycled.

This is a great master bedroom.

It's bright, it's airy, it's in good condition

and whoever buys this house, well, they could be sitting pretty.

# Relax, take it easy

# For there is nothing that we can do

# Relax... #

I reckon you could sort this out without breaking a sweat.

OK, that touch of damp is worth getting an expert eye

to check it over, and the bathroom isn't quite up to standard,

but step outside and again you really don't need to do much at all,

other than relax and maybe potter around in the shed.

So, this place, compared with other properties I've seen, is a breeze.

But what does a local estate agent make of the house

and the location it's in?

We're in an area of Derby that's a very popular residential area

and it's also popular for students.

The students do like to be close to the city centre, which this is.

I think the property needs some TLC.

Perhaps put some new carpets down, internal doors, that kind of thing.

Unless it is that they look to do the investment market,

in which case they might look to split the property

into what we call a HMO,

where they do the student lets with multiple occupancy.

The definition of a House of Multiple Occupation

isn't that simple, but generally it's a house or flat

let out to three or more people

who are from more two or more households and share facilities.

It does mean additional expenditure and, possibly,

you'll need to obtain a licence from your local council,

so when it comes to the numbers,

how does renting this as a family home versus an HMO look?

Three-bedroom terraced properties in this area for residential tend to

rent for around the £700 to £750 per calendar month.

As a student accommodation, you could get anywhere from

£1,200 per calendar month to £1,400 per calendar month.

That would entail turning the sitting room into a bedroom to give

you another lettable room.

But what could this house, guided at 99 grand-plus, sell for?

If it had some modernisation, some work done to it,

it could sell for in the region of £145,000.

Other than that spot of damp,

I'm struggling to find anything negative to say about this house.

You could have grand plans and transform it into something truly

spectacular, or with a lick of paint you could move in straightaway.

I'm sure lots of people wanted it.

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

A mid-terrace property.

Start the bidding at 95,000.

Here. At 95,000 I'm away.

96. 97. 98. 99.

At 100, sir.

100 is bid. 101.

And, as I thought, this was a popular lot.

We rejoin the bidding at £120,000, going up in 500s.

120.

And a half? No.

At £120,000 with the gentleman at the back of the room

for the first time. At £120,000 for the second time.

For the third and final time.

And a half. 121.

121.

And a half. 122? No.

At £121,500, the lady's bid seated,

for the first time.

For the second time.

Third and final time. The hammer's up, fair warning.

It goes at £121,500.

Sold. It's yours. And your paddle number, madam?

The house was bought for £121,500 by Alison and her son Sam.

Alison's a former primary school teacher

who switched to property developing three years ago.

Sam has just finished his degree in music technology.

Dog Alfie checked out the back garden

whilst I chatted to Alison and Sam.

Alison, hello. Pleased to meet you.

-I'm pleased to meet you, too.

-Sam.

-Nice to meet you.

Pleased to meet you too. So, is this a venture together?

It is, yes, it is.

We're both going to work on this one.

And how many properties do you...?

We've got four properties now, two in Leicester and two here.

One of the Leicester ones is a three-student,

the other Leicester is a family let.

Samuel is living in the student let that we've got here in Derby

and this will, hopefully, be another three-person student let.

This will be a student let?

It will, yeah.

Lucky students!

-I know.

-So why particularly are student lets your bag?

Why is that the area you've chosen?

You get a lot more rental income.

Obviously, you have to furnish it and you have a lot more turnover of tenants.

But you do get a much higher rental income.

Houses of multiple occupancy can give a bigger yield for sure,

but you do need to make the property compliant with the regulations,

so fire alarms, fire doors and so on.

And student lets generally run for only nine months

and then, not only do you need to find new tenants,

but the properties may need to be cleaned and refurbished

to get them ready to go again.

So they do require more work and attention

and they're definitely not for everyone.

You'll have seen a lot of student properties.

-Yes.

-How does this compare?

Already, from some of the ones I went to look at,

this is already a good spec.

Good spec?! My student days are well behind me, but this is palatial

compared to many you get.

So what do you want to do to improve it?

We're going to re-carpet everywhere.

We'll redecorate everywhere.

It's got a very small third bedroom at the moment.

Not really a study bedroom.

So we're actually going to build a wall between

the lounge and the dining room to establish a third double bedroom.

So what would the smaller room upstairs be?

That's debatable at the moment.

We are still wondering whether to put another set of facilities in.

One of our lets has been really successful

because it's got two lots of facilities.

It's got a shower room and a bathroom in it.

And we've never had any trouble getting students in there.

What's the budget coming in at?

Ten to 12?

It is, yeah.

Alison will have the damp checked over by a professional

and, fingers crossed, they hope to complete it within 12 weeks,

so that it's then ready for the next student intake.

How will the work be split?

What do you both intend to do?

I'm going to try and do as much as I can, you know,

see if I can learn a few things, like maybe replacing a floor or...

-Yes.

-Certain things like that which will obviously save costs.

And it's not just effort Sam's putting in.

Nope, he's putting in his own dosh.

I had some inheritance which I've decided to put into this,

just so, instead of it gathering interest in a bank,

I thought it was a better option. It's putting it to good use.

And who knows? I might be able to make something from it as well.

It truly is a joint venture.

Yes. That's right, yeah.

-And do you both get on?

-Yeah.

Yeah, we are pretty good at getting on, aren't we?

Yeah, we're both quite, erm...

What's the word? I don't want to say controlling!

But, yeah... You do listen to me though.

-We are both quite sort of leader-type people, so...

-Yeah.

Sometimes we butt heads when we are very opinionated on something.

We are actually quite patient with each other as well.

We don't argue, do we?

-No.

-No.

-So maybe more than controlling,

a better way of saying it, you're more organised and you know your minds

and you're going to do a cracking job.

And I can't wait to see what you do.

-Good luck.

-Thank you very much.

-Thank you, Alison.

-Thank you.

Thank you.

It's lovely to see this family affair with a mother and son team coming together.

It seems like they have everything covered.

They know the student rental market, they know the location.

However, I'm not sure about those carpets.

Better to have something for students that they can wipe down.

You can find out what they opted for later in the show.

So, our first set of buyers can take a well-earned rest.

What about the other two?

Yes, will it be a stunning winner or a dodgy own goal?

Let's find out.

We return now to Cumbria

and the southernmost town on the Solway Firth of Maryport.

We floated in almost six years ago

to have a look at, shall we say, a unique property?

Well, the property I'm here to see is certainly unusual.

I'll give it that. Good news to start off with -

it's got great views of the sea and the local golf course.

Bad news is it's actually the lodge of the local cemetery.

So it's not going to be to everyone's taste.

Yes, this two-bedroom detached property sat in the grounds of the current town graveyard.

But it was the inside that gave me the real chills.

The whole house has a sort of slightly cramped, dark, labyrinth-type feel to it.

To say there was plenty of work to do here was

something of an understatement.

Plus, you would have to take into account all the legal red tape

that would go along with buying a property like this.

A simple project this was not.

Still, at a guide price of £50,000 to £60,000,

it did have one or two brave souls interested on auction day.

Third and final time...

The happy buyer was Ali.

Former restaurateur Ali bought the property for £66,000.

She was up for the challenge and was nothing if not positive.

Did that not put you off at all, an active cemetery?

It didn't put me off.

It would make a good holiday rental with the golf course and the beach.

A holiday rental?!

Well, if you wouldn't want to stay here for good...

you could stay for a week and then leave.

# Holiday... #

Ooh, that might be a tough sell, but people do like quirky.

Ali certainly had some challenges ahead of her.

She earmarked a timeframe of one year

and a budget of £20,000 to renovate this dilapidated lodge.

Well, it's almost six years later

and we've returned to see just how well she's been getting on.

# I'm ready for the good life... #

Now, there's still obviously plenty to do here,

but Ali has managed to make this old cemetery lodge look something like a cosy home

and it's not been easy,

especially when it came to red tape.

It was difficult for the services in the first place, because

the water was still connected to the graveyard taps.

The electric was still connected to the disused chapel in the far corner of the graveyard.

And it took three years until everything was separated and in my name.

The kitchen is still a work in progress obviously,

as is much of the downstairs, bar the living room.

Upstairs though there are significant improvements.

The aforementioned bathroom is modern and attractive

and thankfully working.

There's two great-sized double bedrooms up here.

And Ali looked right at home.

One of the main problems here for Ali was outdoor space.

She has overcome that issue with a bit of a compromise.

This space can't officially be called a roof garden

because of the access,

but it does give her the outdoor space she wanted

whilst still respecting the cemetery grounds.

Ali has been living here and doing lots of the work at the same time,

which is pretty tough.

I've done most of the joinery work myself.

All the small bits of plastering, I've done myself.

Decorating, obviously myself.

I did the bathroom, 95% of the bathroom work I did myself.

Just a little bit of help with the plumbing.

I'll have to have help with plastering the kitchen,

but I'll try and do the rest myself.

Fingers crossed.

There's still lots to do,

but lots of the specialists and trades have already done their bit.

There's been extensive plastering in the more inaccessible spots

and all the windows have been replaced

after obtaining planning permission.

A new central heating system has been installed and the house rewired.

The dampness, which was mostly due to issues with drains, has been sorted

and the roof re-slated.

So Ali has pretty much taken on a shell and rebuilt it.

This was funded by the sale of her mum's former property.

But she does like a challenge and in the meantime took on

another property which is a holiday let.

No wonder it took a lot longer than she thought.

I think originally I said a year, timescale, to do the place up.

Obviously I'm a bit over.

It's about five years over.

Due to the fact that, well...

you haven't even got the money for a pot of paint,

never mind putting a roof on.

And things like planning permission take so long,

the money you had put aside,

you've used half of it to live on while you're waiting for everything happening,

so that didn't help.

So, two houses done up later,

I'm now working on this one full-time.

SHE CHUCKLES

I've gone over the budget a bit but not too much.

I originally thought about 20,000.

I'm only up to about 23.

There's not a great deal more to do

and the main things are done

and I do most of the work myself,

so that helps keep the cost down.

So far, Ali has invested a total of £89,000 here.

Having bought another holiday let, she now lives here full-time and has

no intention in selling or renting the property.

So it's interesting to know what kind of value she's added.

We asked two local estate agents for their opinion,

starting with the agent who saw it originally.

You are restricted with the confines of the property.

There's not a lot of land beyond the walls of the house.

What you've got to do is alter the footprint

to make it work well and make sure you don't make it top-heavy,

make sure you don't make bottom-heavy,

and it's balanced well and it flows quite well as a property.

First impressions of the property,

it's quite a nice, quirky property, quite a good size,

full of unique charm and character

and it would be really nice to see what it's like when it's finished.

So, let's see what it could be worth when it's finished,

bearing in mind that £89,000 investment so far.

Once the work is completed, I would expect the property to be

worth in the region of £140,000 to £150,000.

It's a difficult one at this stage, but I think done up, pristine

condition, showroom condition,

smelling like a new hotel,

all done and dusted and finished,

I think you're in the region of £150,000.

I'm quite pleased with those valuations, yes.

I bought it for 66 in the first place

and I spent a lot of work and a lot of time,

but I'm quite pleased with that, yeah.

That means, as it stands, Ali would make a pre-tax profit of 61,000.

And whilst this was initially an investment,

it's now a labour of love and Ali couldn't be happier.

I love this place. I want to be here for an awful long time,

as long as I can, perhaps until the day I die.

I visited Derby earlier in the show

and this property, guided at £99,000 plus,

was a characterful three-bed that was almost in perfect nick.

It's in good condition and whoever buys this house, well,

they could be sitting pretty.

# No, I'm never gonna be

# Cos I don't wanna be

# I don't wanna sit still Look pretty... #

Sold, it's yours and your paddle number, madam?

And it didn't sit still for long in the auction room.

Mum and son team Alison and Sam paid £121,500 for it as a joint venture

and they were looking to turn it into a student HMO.

And do you both get on?

-Yeah.

-We are pretty good at getting on, aren't we?

Yeah, we're both quite, erm...

What's the word? I don't want to say controlling!

THEY LAUGH

-But, yeah... You do listen to me though, don't you?

-We are both quite sort of leader-type people, so...

-Yeah.

-Sometimes we butt heads when we are very opinionated on something.

This was Sam's first financial and physical investment in a property project.

However, with three other properties in their portfolio,

he was able to rely on mum and dad's experience.

With a 12 grand budget, they had to get this ready for

the new semester and had a 12-week timescale.

# Sit still, look pretty... #

Three months later,

right at the cusp of the new university year, we're back.

MUSIC: Here To Learn by Clearlake

# You're here to learn

# You're here to learn... #

Well, the students might have come to Derby to learn,

but this house is an education in maximising space

and creating good-quality student digs.

By restoring the wall in the living room,

they've created a fourth bedroom AND retained the living space.

They've also retained the character features throughout, which I love...

..and added modern touches like good quality carpets and a new bathroom suite.

The question of the renovation is answered,

but now the big question - how did mum and son get on?

# You're here to learn... #

I think we've got on really well.

-We have.

-We have. I think we've agreed on a lot of things and when

-we've not agreed, we've...

-We've talked it through.

-Yeah, we've talked it through.

-One or two challenges.

Yeah. I've really enjoyed it as a whole, actually.

I've really enjoyed doing it and the excitement of doing something

different every day and it's just really rewarding

to do work on something and see your work pay off, I guess.

-Yeah.

-I think I've got the bug from you to do some in the future myself.

It might have been exciting for Sam

but this wasn't a renovation that was straightforward.

It's an old house.

There's going to be issues, going to be problems.

Some of the house had some bits of damp that you could see.

That had been rectified by putting mortar in at the end of the gable

in the back bedroom. We also had the flashing replaced on the chimney,

so now we've got new gutters

that should have stopped that water coming in, too.

Initially we only wanted to have the radiators done, didn't we?

But in the end, splashed out on a new boiler

which was an unexpected cost.

Contractors helped them put the roof and damp right

and Sam's girlfriend, Sophie, has done all the painting.

But all that additional work has added a little to their timescale of 12 weeks,

as they still have some snagging left to do.

Has it affected the 12 grand budget though?

We think on the renovation that we spent about 15, don't we?

-We do.

-But that's excluding furnishing for

the tenants to move in, which is obviously...

-..a little bit more than that.

-Yes, yes.

While the students can look forward to new surroundings,

Sam's looking to the job market, as he's recently graduated.

I am still job searching, I may be...

I was looking at the music industry but I'm actually...

I've enjoyed this so much that I'd quite like to look at certain things in this industry as well.

And in the future, I definitely want to have some buy-to-lets for myself

and I'll continue to help Mum and Dad with theirs

whenever they need me.

Congratulations, Sam, and good luck with the job hunt.

And good luck to both Alison and Sam with their estate agent valuations.

Let's start with the thoughts of the agent who saw it before renovation.

Arriving here today, it's a huge transformation with what they've

done to the property,

in the upgrade that they've done to the kitchen and the ground floor

accommodating another bedroom.

Having looked around the property,

I think it's in a reasonable condition.

It's been done to a standard which is perfect for rental,

be that student or normal residential.

Layout works well with the separation of this room

to produce a bedroom rather than a lounge,

maximising the rental income.

Alison and Sam spent £136,500 buying and renovating this property.

They'll be keen to know the monthly rental for all four rooms let out.

Rental value for a student HMO let would be around

£1,300 per calendar month.

In the current marketplace, we have tenants lined up

for this property at £1,200 per calendar month.

We thought we were doing really well

with getting four rooms rented, so actually,

maybe next year, we'll have to put the prices up a bit!

They've achieved £1,200 per calendar month for nine months of the year

and that gives them a yield of 8%.

So would they recommend property development to other people?

It's a bit of an adventure.

Yeah, it's good fun.

There's no denying it.

Most property projects we see on the show do provide testing times

for our developers.

Yes, but there are rich rewards if you get it right.

Yeah, we'll have plenty more stories for you next time

on Homes Under The Hammer.

-Bye-bye.

-Bye-bye.