Episode 67 Homes Under the Hammer

Hello and welcome to the show. Now, in this day and age,

it's getting harder and harder to bag yourself a bargain

in the property market.

Yes, it certainly is.

However, there's still one place,

provided you've done your research and all your homework,

you can grab yourself a bargain.

Yes, the auction still provides opportunities if you've got the money and the nerve.

So, would you head down to your local property auction and buy your next home under the hammer?

Just like the lots, the bidders in the auction room are a varied bunch.

Yes, everything from seasoned property developers to first-time buyers giving it a go.

As well as people looking to buy their dream home,

it's a really mixed bag.

Let's find out what today's buyers went for.

I'm in London, looking at this two-bed flat with a rare quality.

Outside space. Not this, that.

Speaking of outside space,

these maisonettes in Liverpool practically have Goodison Park in their back garden.

It's Everton football ground, look at that.

And the stairs at this mid-terraced house in County Durham will have me

keepy-up ready in no time.

Told you they were steep!

On the plus side, good for the thighs.

All of these properties have been sold at auction and we'll find out who bought them

and what they paid for them when they went under the hammer.

It's sold to you.

Situated about eight miles from the centre of London,

East Ham is a district on the up.

Lots of city workers have been living here over the past few years

due to the comparatively affordable housing market.

It's not the first time the district has been a magnet for new residents.

After the East Ham train station opened in 1852,

the population grew from under 2,000 to over 130,000 in less than 60 years.

I'm guessing both the rental market and sales market were pretty buoyant

back then too.

We are just two miles away from East Ham Tube in the heart of East London.

And on this street, we find our property.

Here it is. It's a two-bed,

ground-floor flat with a guide price of 175 grand plus.

Let's waste no more time and get in there.

Right.

OK, the two bedrooms are right in front of you as soon as you come in.

This would have been the front room back in the day,

it's now the front bedroom.

Fireplace here, there is a little bit of damp down there as well.

You've got a nice big window, nice high ceilings,

and it does feel pretty solid.

But it's bedroom number one at the moment.

Back into the hallway,

and then out of the hallway into bedroom number two.

Fireplace again, this does take up a bit of space.

Central heating, again, high ceilings.

This is bedroom number two.

Let's see what else it's got to offer.

Down the long corridor, into...

Well, firstly, down to another level and here's your bathroom.

It's new.

You can tell, this is all fresh plaster.

It's all been built in.

Not a bad sized bathroom at all for a two-bed flat, and then you're into your dining area here.

The windows feel pretty sturdy and relatively new.

You've got a boiler on the wall.

You know, it's quite spacious in here.

I'll tell you why it's quite spacious, now I'm into the kitchen area.

This part would have been the bathroom back in the day and the door would

have been here. I can see over here, this would have been the toilet.

But they've knocked the walls down and opened up the space.

They've made better use of it.

It's more modern now.

It's more sellable, it's more rentable.

Well done.

# More, more, more

# How do you like it, how do you like it? #

There's definitely more, more, more pros than cons here.

A lot of the hard work has already been done.

And more than that, there's, well, more.

So we've got a ground-floor flat,

two beds, in the centre of East London.

And we've got some outside space.

Not this, that.

Always a bonus.

OK, so it's not exactly Hyde Park.

But having outside space in London can be pretty rare.

Although, something not so rare about this flat is,

like 95% of flats sold in London in 2016, it's leasehold.

So when you're buying a flat,

what I suggest you do is double check the length of the lease.

Now, the lease on this particular flat is 70 years.

Now, anything under 80 years can be really expensive to extend.

All I'm saying is do a bit of research.

It might save you a few quid.

How much of a problem could that lease be if you are trying to get a mortgage?

We invited along a local estate agent to tell us more.

A short lease on the property, 70 years, is not a massive disaster.

It is still mortgagable, most mortgage companies will look

for 25 years plus term of the mortgage,

so 50 years upwards,

but I think it's always an off-putting thing for purchasers anyway.

So I think at the moment, the way the marketplace is,

it needs to be renewed.

So what could extending a lease here cost?

Anywhere from around about £20,000-£25,000.

If they offered it cheaper,

my advice would be to bite the freeholder's arm off.

So, invaluable local knowledge, there.

But what does he make of the flat, guided at £175,000 plus?

First impressions, nice property.

A bit of on the small side, but I think it's, yeah, a good little investment.

So if the house was refurbished, how much could it be worth?

Selling the property as it is, as a two-bedroom,

without renewing the 70 year lease,

I think it's going to be somewhere in the region of

£200,000-£210,000.

And if you did spend about 20-25 grand renewing the lease,

could you see a return?

If you were to renew the lease and sell it as a two-bedroom flat,

I think realistically at the moment, you're going to get somewhere around

about £240,000-£250,000.

So it's not in great condition.

It needs a bit of time, effort and money spent on it.

Talking of money, I think it would be worth spending a bit getting that lease extended.

Let's find out who had the right budget when it went under the hammer.

So, ground floor flat, a bit of garden, I understand,

so who would like to start this?

200 anywhere?

If not, you tell me.

I think it's worth two.

OK, start the other way, 160.

Go upwards from there, 160?

160, got your hand, 160?

165?

165?

162?

164?

166?

166, 168?

170, 172?

172, 174?

New spot, first bid.

172, first time.

174?

176?

178?

Thank you. 180?

182, madam?

180, first time.

Second time.

Third and last time.

Sold, 180.

The successful bid of 180 grand came from Andre.

He bought the flat with his partner, Rachel.

I caught up with them back at the flat to find out more.

-Rachel, nice to meet you.

-Nice to meet you.

Andre, nice to meet you too. Well done, guys, congratulations.

-Thank you.

-Firstly, why this area?

I've always been based in East London -

Barking, East Ham - so, it's easier to kind of have property

close to where you live instead of travelling miles.

So, we kind of... This was the perfect location.

-And this one came up.

-Tell me, why this property, then?

-Were you looking for a flat?

-Ideally a flat, yes.

I know houses are a lot more work.

I've literally been working on my house and it's a nightmare, so...

-So it's a nightmare working on your house?

-Yeah. And I'm very, very

picky about everything and I knew it would just be a nightmare

doing another house. So I thought, flat definitely,

you kind of have to stick to the inside and a little bit of the garden.

-And were you happy with what you paid?

-Absolutely. We were expecting it to go a lot higher,

so it was a good price.

Oh, well done. Was it way under your budget, then?

About 15k under the budget, so it was quite good.

It sounds like the property gods were smiling down on them

for their first development project together.

And so far, they've done everything right.

Reading the legal pack and viewing the property.

But will they get it right when it comes to the refurbishment?

I've always been after kind of high-end sort of finish,

but still keeping the cost low.

So, the kind of dark laminate wood flooring, just premier feel to it.

-Modernise it.

-Yeah, modernise it.

What about the two rooms, you've got the two bedrooms,

are we going neutral colours, or are we going colours?

-No, neutral.

-Neutral, neutral all the way.

-Yeah?

-Yeah.

Are you going to make the kitchen any bigger, or are you going to keep it as it is?

We're going to extend it to sort of an L-shape.

-OK.

-And with kind of, like, a breakfast bar/eating area.

-Just coming out here? OK, and the kitchen will go somewhere...

-Yeah, we'll just extend that way.

-OK.

-And hopefully that should be enough to allow space for the rest of the room.

-All right.

And what are you looking to do with it when it's finished?

Are you moving in, are you selling, or renting?

-Selling it.

-You're just going to get rid of it straightaway?

-Yeah.

-No question there.

No, no question. I've tried tenants,

and I think I'll give it a break for a few years.

And who's going to do the work?

It's going to be outsourced,

but we've got a lot of links to the family so they can literally just...

I think they're waiting outside, actually!

The 15 grand budget will need to go far to get that high-end finish.

But with the family mucking in, I reckon it's achievable.

Rachel will be at the helm as project manager,

making sure the work is complete within their two-month timescale.

And Andre has been looking into that lease.

We are going to look into trying to extend it.

There's already been a section 42 notice on the previous,

from the previous owners to the landlord.

-OK.

-So hopefully extend it, because I know it adds

a bit of value more than you actually pay for it.

-OK.

-But if the timescales don't allow for it,

then we might just sell it with application open.

OK. Do you know how much extra that's going to cost you?

From what I see in the proposed,

from the previous owners, it was about £15,000.

-Yeah.

-As a section 42 notice has been served,

the seller can assign the benefits of the notice to Andre and Rachel.

So they don't have to own the property for two years to qualify

under the law allowing lease extensions.

A 15 grand figure, if they can agree on that, makes this a pretty good buy.

Of course, any landlord is entitled to make a counter offer in this process.

So, no counting any chickens.

So away from going to auctions, then, and buying properties, what do you do,

-what's your day job?

-I'm a primary school teacher.

OK, so looking after builders and looking after primary school kids...

-About the same.

-Pretty much the same, isn't it?

-Andre what do you do?

-I'm in the media industry,

so we do music videos and direct music videos and stuff like that.

-Do you really?

-Yeah.

-So...

-Tell me more about that, I'm interested about that.

It's not too bad, it's giving me the skills to kind of,

I guess, boss people around, is the best way to say.

But no, it's just the kind of leadership skills,

so hopefully we should all, in terms of the builders,

kind of give them direct instructions.

-Both of us.

-Hopefully.

-She's a teacher, I'm a director, it's perfect.

-It's all in place.

-Exactly, that's what we need.

-Do as you're told, lads.

-Yeah, basically.

Rachel, I hope it works out, it's your first venture.

I think you chose right to go small.

Hope you make a massive profit.

-Thank you.

-Good luck to you.

-Thanks so much.

-Andre, good luck.

So, the primary school teacher and the music video director

have ventured into the property developing world.

It's their first project, and they've chosen small.

And they're right to.

Will they achieve that high-end finish they're after?

Stay tuned and you'll find out how they get on.

MARTIN: Liverpool's renowned as a football-mad city.

And the property I'm here to see fits the bill perfectly in that regard.

It's situated near Liverpool FC's Anfield Stadium,

and it's nestled in the shadows of Everton's Goodison Park.

Now, although the stadiums can't claim to be the closest derby grounds in England -

that honour goes to Nottingham's clubs -

the two centre circles are separated by just 966 metres.

Something tells me our property might appeal to those familiar

with the offside rule.

Well, up for auction, in this rather pleasant street,

was a double fronted terrace which has been converted into two

three-bedroom maisonettes. Guide priced at £75,000-£80,000,

sounds like it's a fair price for that.

Let's take a look inside.

Two for the price of one, and the maisonettes promise a good size.

So let's hope it lives up to expectations.

So, through the front door and into a fairly large entrance lobby, which

you might expect. Some very grand stained glass which is adorning

the place, which is good. And then, two flats.

That one.

Well, both of the flats are pretty much the same,

so it doesn't really make a difference which one I came into.

Maisonettes, as in you've got another floor up there, so you've got three bedrooms.

It's almost like a house, isn't it?

Large living room towards the front.

Downstairs loo and bathroom there.

And then through into the kitchen.

I have been in houses that are definitely smaller than this.

Look at this for instance, the size of the kitchen, absolutely lovely.

Enough space for your kitchen units and a dining area here.

And that's just one.

So I guess the advantages with this, straightaway are, well,

almost two for the price of one, but when it comes to materials and tradespeople,

the fact that they're right next to each other, you're buying two kitchens,

you might be able to get a deal on that, two sets of bathrooms and stuff,

it does actually work quite well. So yeah, I'm liking what I'm seeing.

You might save on a bulk buy of paint and wallpaper too.

There's loads of room, and this is just the downstairs part of the maisonette,

which, by the way, is French and means "little house".

And it usually means an apartment across two floors, so up we go.

So loads of space upstairs, nice high ceilings.

A few corridors, which I think you can play with.

Another thing is you haven't got a bathroom up here.

You've got that one downstairs, obviously,

and it's crying out for either an en suite or maybe a family bathroom

that you could probably put in here. It's a good size, again, this is a flat.

This is amazing. But the thing that's really going to float somebody's boat

is the view out of this window. No, it's not open fields.

No, it's not herds of wildebeests sweeping across the prairie.

It's Everton football ground, look at that.

If you're a football fan, or more particularly an Everton fan,

that's a sight for sore eyes.

You'll almost certainly hear the roar of the crowd from here,

and that buzz and excitement that match day brings.

And if this property was a football score,

we'd have to say it was 2-1 up.

Perhaps there's even an opportunity to get more.

It seems that the ceiling in this bit, low as it is, isn't the original.

Because if you look up there, it would have been much higher at one point.

So I wonder if you could do a bit of playing around

and maybe even extend upwards.

Not necessarily that you need much more space,

if you're going to leave it just as two flats.

Because you've got loads.

It's... Yeah.

And for that guide price, yeah, it's a good one.

But this is just half-time, if you like.

There's a whole other half in the back of the building,

with a ground-floor kitchen, shower room and a big lounge.

And again, three bedrooms upstairs.

And if you take the building as a whole,

it lends itself to a number of formations.

Two maisonettes,

or divided into one to two bedroom flats,

or possibly a house of multiple occupancy.

Definitely, there is a range of options here.

But what does an agent from the auction house who sold it

think she would do if she was managing this property?

The work on both maisonettes,

I would put in new kitchen, new bathrooms,

decor right through, new carpeting,

and maybe get the electrics checked out.

So undoubtedly, there is a fair amount of work to do here.

But guided at £75,000-£80,000 for the whole building,

would it be worth it?

For a three-bed maisonette in this location,

if it was done to a very high standard,

I would market the property with an asking price

of offers between £60,000-£65,000.

So on the rental market,

I would estimate a rental value of somewhere between £500 and £550

per calendar month.

And what about another option, letting it out as an HMO?

If it were rented out as a HMO, you could put three tenants and,

£85 per week per person, which would include bills.

But that would net you about £15,000 per annum.

Well, a fantastic property for football fans, obviously.

I think in general, a really good one to go for.

Loads of space, loads of potential, loads of options, we like that.

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

We are offering you a double fronted mid-terrace property,

that has been converted to provide two three-bedroom maisonettes.

Can I say 75?

Thank you, 75 is bid.

77. I'll take next.

We'll do this in twos. Thank you, 77.

Now back to you, 79?

81? I see there's 83.

I'll take you at 83, yeah?

Can I say 84?

85? Am I just down to two of you now?

Are we breaking this into half? Shall I say 85 and a half?

OK, that brings you in.

86, now, can I say?

Thank you very much, 86 and a half?

87? 87 is bid, 87 and a half?

88?

And a half? 89?

89 and a half?

89 and a half I have, may I say 90, sir?

90 and a half?

No? Anybody else at 90 and a half?

Then with you, sir. £90,000 once. 90,000 twice.

Let me know if another 500 is coming, if not, it's going to go then,

at 90,000 for the third and final time, are we all done?

Looks like we are. It's sold to you,

well done, and a little victory salute as well!

And the successful bidders, with a little help from son Oliver,

were Polish couple Dan and Jo.

Dan is a builder while wife Jo is an accountant and this is their third

property purchase in this area of Liverpool.

I met them back at the house to find out the score.

Dan, Jo, great to meet you both.

-Hi.

-Congratulations.

-Thank you.

-Tell me why you wanted to buy them?

Well, basically, we wanted to buy a bigger house,

which could ideally be converted to flats.

And we wanted to look in this area, because we have

our houses here, just on the doorstep from this house.

And then when we started searching,

we found this property and we thought it's great,

because it's already converted into two flats.

-Yeah, yeah.

-So that was, that was a great potential for us.

So what are you going to do to it to sort it out?

We've got two plans. A and B.

The one from now is probably going to be just make another two flats.

Just one for a long tenancy agreement

and the second one for a short tenancy agreement.

So we can host football fans in our place.

So they can have a holiday let in,

or a kind of room per weekend, or per match.

Specifically for holiday, for football fans?

Specifically for them.

We want to try, we've got two properties. So we can try.

If that doesn't work, we change for a long-term tenancy.

And then in the next year,

we can probably change that including the loft as well.

We've already got permission and documents for six flats.

-For what, six beds?

-For six flats individual.

One bedroom, and one is going to be a double bedroom.

On that side, so that's going to be something, something else.

Dan and Jo have an interesting plan for this property.

They've been London-based for ten years and have come to Liverpool having done

their homework and realised the returns in the area could be very good.

So, what is the budget for what you're planning then,

for phase A and B then?

Yeah, we are looking at from simple figures, for a first stage 1,

is around, I guess, 15,000,

just to make it nice with the furniture

and just get them in, the fans.

And Plan B is going to be around 100,000, I guess.

They're two interesting plans with two different timescales.

Plan A, the upgrading of the maisonette,

that they hope to complete in 2-3 months,

whereas the more complex Plan B would be potentially up to a year.

I'm fascinated that you decided specifically to rent out to football fans.

Where does that plan come from then?

Well, it's maybe a bit too much to say that...

We want football fans because we are in the middle of this area,

where we are two minutes from Everton Stadium

and then ten minutes from Anfield Stadium.

So I think it's a very good location for them,

but we want to make them family-friendly as well.

So that families with kids could also come and have a holiday

or weekend away in Liverpool, where so many things are going on.

-Terrific.

-So, yeah.

Wow! So, are you going to paint one flat red and one flat blue?

One for the Liverpool supporters and one for the Everton supporters?

We've been thinking about that.

-It might be.

-Yeah, it might be an idea.

-Why not?

-Good luck with it.

-Yeah, we'll need that.

-I look forward to see how you get on.

-Thank you very much.

Well, Dan and Jo seem to have all the options covered with this place,

don't they? And I think they got a good buy.

But of course, we're just at kick-off.

What will it be like at full-time?

You can find out later in the show.

Still to come, I think there's a gap in the market for this mid-terraced house in County Durham.

I can tell the boiler has been here, it's been ripped out.

And back in Liverpool, we'll find out if Dan and Jo

stuck to their original timescale, or did they go into extra time?

Time to head back to the district of East Ham,

just eight miles outside the City of London.

It was here I saw a two-bed, ground-floor flat guided at £175,000 plus.

Inside, the bedrooms were both a bit tired.

But work had already begun on the bathroom and large kitchen-diner at the rear of the property.

This part would have been the bathroom back in the day,

the door would have been here.

I can see over here as well, this would have been the toilet.

But they've knocked the walls down and opened up the space.

It's more modern now.

It's more sellable, it's more rentable.

Something else sure to get the bidders interested

was the added bonus of a small garden.

But I hoped whoever bought this place had done their homework.

Now, the lease on this particular flat is 70 years.

Now, anything under 80 years can be really expensive to extend.

All I'm saying is do a bit of research.

Sold, 180.

Despite being first-timers at auction,

couple Andre and Rachel bought the property for 180 grand and it was

no surprise that doing homework came as second nature.

I'm a primary school teacher.

OK, so looking after builders and looking after primary school kids...

-About the same.

-Pretty much the same.

-Andre what do you do?

-I'm in the media industry,

so we do music videos and I direct music videos and stuff.

-Do you really?

-Yeah.

It's given me the skills to kind of,

I guess, boss people around, is the best way to say it.

It didn't sound like these two would have any trouble showing the builders who was in charge.

But could project manager and teacher Rachel get top marks and keep the 15 grand budget

and two-month timescale under control?

Or would it be a case of detention after school?

We are back two and a half months later, to find out.

The new kitchen is a class act,

and the second-hand units means that Andre got his high-end finish

at a fraction of the cost.

A-Plus to Rachel and Andre, who used part of the existing bathroom suite,

while giving the walls and floor a stylish overhaul.

Here is a lesson in creating space.

The bulky chimney breast in the front room is gone.

So is the one in the second bedroom.

And the stylish minimal decor is too cool for school.

This authoritative couple have shown this former grubby flat who's the boss.

But it was Rachel's first-time project managing a build.

So, did the teacher become the student?

So originally, the plan was that I would be the project manager.

It started OK.

I started doing a lot of the work.

But due to unforeseen circumstances, like jury service popping up,

Andre did have to take over and complete the project.

It wasn't anything major.

The builders were doing most of the work anyway.

For me, it was just a few extra days of work.

It wasn't too bad.

We got through it together and we both took on the responsibility.

It's very different, telling grown men and builders what to do,

compared to small children. But I'm learning.

Armed with prior experience of renovating his own home,

Andre has kept them on track with the timescale, with a two-week overrun,

just down to locating a good builder to start on the project.

But that's not to say the flat didn't come with its own challenges.

In this room, the flooring was in really bad condition

and initially we wanted to just remove it all and concrete it over.

But there was problems with...

You had to kind of ventilate the underneath of the house.

So we've replaced it with new wood and we kept the concrete area here.

We just dug down a little bit and re-levelled it and it ended up working fine. It was the majority...

The big problem was the levelling of it, but we ended up fixing it.

Re-levelling the floor and replacing the boards was an unexpected cost.

But what about one cost in particular that was expected - the lease?

We have a slight issue with the landlord,

where they're not really replying to us.

So, we have to follow procedure and just take it to the courts.

We imagine the price of it is going to remain the same, at £15,000.

We've planned to align it so it finishes with the sale of the property.

So when the new buyer purchases it,

hopefully the lease issue would have been sorted out as well.

So there's still at least 15 grand to pay.

But what has been spent so far?

Our original budget was 15,000,

but due to unforeseen extra costs,

we decided to take out the chimneys.

We decided to finish it to a higher standard that we would be happy with.

So it did come in at 20,000.

£20,000 plus the additional 15 grand for the lease extension

will take their total investment to £215,000.

But what do two local estate agents

make of this first foray into development?

What a great transformation.

From when I saw it before to now, they've done a great job.

Great, clean line finish, lovely white walls.

Wooden floors, very attractive as well.

I love the adjustment to the kitchen, looks really good.

Nice finish out there as well. Very modern.

And the garden looks great. It's a really sellable property.

I think the property is wonderful.

There's not much more that I actually want to change with that.

They've put a very good kitchen in, and a bathroom, which is the most,

I think the most important part of a property.

So it's definitely something that they've really spent a lot of time

and attention on it and really can see it in the final result.

I think your biggest selling point of the property is going to be the fact that it is newly refurbished.

To my knowledge, I believe there's going to be a new lease

for the property as well, which I think will be

a very big selling point. Sole use of the garden is also excellent.

And the fact that if you're looking for an investment property,

it's a two-bed flat, so it's going to give good yield on rent at the moment.

This flat is a definite crowd pleaser.

So, assuming they get the lease all sorted in time for their sale,

what could it sell for?

Total price, taking into account the lease has been extended,

we're going to be looking at around £250,000-£260,000.

If I was to take this property on the market,

I'll be looking to advertise between £275,000-£285,000.

£275,000-285,000, I'm surprised with that, more than I expected.

-Yeah.

-Very happy with it.

The agents' valuations could give the couple a profit

of between £35,000 and £70,000, minus taxes and fees.

That result is the cat's whiskers.

Does that mean there will be more to come?

We haven't run into too many issues.

So, I think in the future,

we would like to do two or three perhaps in a year.

Definitely more than just this one.

So, more development in this couple's future.

But what else do they see on their horizon?

-Well, you're going to propose at Christmas...

-I want to buy a Lamborghini.

A wedding or sports car?

I think I'll stick to predicting the future for property.

Good luck!

MARTEL: Just a few miles to the east of Bishop Auckland in County Durham is the village of Coundon.

Interestingly enough, it was originally called Cunadun,

which means "the hill of cows".

And "dairy" me, if this isn't a great opportunity

to make as many cow puns as possible, then what is?

I think it's best if we moo-ve onto the property.

Do you know what's nice?

It's nice to walk to a front entrance of a house and you're not on a road.

So, in front of these houses, you have allotments,

so it's nice and tranquil.

However, you do have good access to the road networks.

But if you're a train spotter, the news isn't so good,

because the nearest train station is in Bishop Auckland.

Now, this is the property I'm here to see.

It's got two bedrooms and a guide price in excess of £12,000.

Let's go look.

OK, well, what we have to start with - an awful lot of letters.

A sure sign it's not been lived in for a long time,

which you can tell just by the smell and look of the place.

I mean, it's a solid structure you've got, big chimney breast.

But I don't like the look of this low-level damp,

and actually even looking around the place, I see a lot of patches of it

coming through. So, yeah, you've got your reception room first to follow,

really steep staircase, which I'll tackle later,

and then a good-sized kitchen.

Everything must go. This needs completely updated.

It's not just the tired old kitchen that has to go.

There's a lot more damp here, which, like in the front room,

will need to be sorted out before you can really tackle things like

the kitchen. And then you have your bathroom downstairs.

Not everyone's cup of tea, not ideal walking through your kitchen to get

to the bathroom. But, in this area, it's a layout people expect and accept.

And that very reasonable guide price of 12 grand has to be borne in mind.

This one is really calling for a simple, straightforward refurbishment.

One thing that definitely needs sorted is those stairs,

which don't look like they meet current building regulations,

as they're far too steep.

I told you they were steep!

On the plus side, good for the thighs.

To one side of the stairs, you have a really good size master bedroom,

and then the other side you have this smaller bedroom.

Oddly, there's a newish door there.

I can tell the boiler's been here.

It's been ripped out.

This place needs a lot of work.

So, we can add a new heating system to the growing list of work required,

and it is now pretty clear why the guide price was set so low.

We've asked along a local estate agent

for her thoughts on the property, and also the local area.

Is it the right place to be investing in the property market?

There's a regeneration programme that's happening in Bishop Auckland

at the moment. They're putting a lot into the castle and they're doing an

awful lot of work in the marketplace of Bishop Auckland too,

which is really spreading out into the smaller, outer little villages.

That's good news for the area.

But this house could certainly do with some regeneration too,

which would require an injection of cash.

And, luckily, you could get some help with that.

If the property's been empty longer than six months,

then there is a grant available

to have some work done to the property,

particularly for bathrooms and kitchens.

Durham Council offer a five grand grant

to properties in lower council tax bands,

as long as the owner will be occupying the property

for a minimum of five years.

Private landlords can also get help

in the form of an interest-free loan,

as long as the house is tenanted within three months.

Other schemes are out there and they vary from council to council,

but it's good to know there is help out there to get empty homes

turned around so people can live in them again.

Once this property, guided at 12 grand,

is renovated, how much could it sell for?

On completion, with all the works done,

the property would sell in the region of £30,000-£35,000.

With all the work needed here,

maybe there isn't a lot of money to be made if selling on.

So, what about the rental market?

The property would rent for £300-£350 per calendar month.

It's got a lot of damp, steep stairs, and layout issues.

But with that 12 grand plus guide price, I'm sure even those problems

won't have put everyone off this house.

Let's find out who wanted to take it on when it went under the hammer.

This next lot is a two-bedroom, freehold, mid-terrace house.

Where shall we start? 20?

18? 16?

15? 14?

Where shall we start, folks?

12. Thank you, sir.

It's as good a place as any, if I may say so.

At 12,000 I'm bid, and thank you.

Do I have 13 anywhere?

I do. 13.

14. 15?

It was towards the end of the day, but two interested parties took

the bidding on this lot up to £20,500.

Make no mistake, 20,500.

At 21?

No? At 20,500, it's being sold, make no mistake.

Are we all done? There's 21.

21.5?

He's looking away from me.

No?

All done? 21 and a half.

22? No?

Both hands saying no this time.

£21,500.

All done? One, two, three.

Good contest. Bidder 601, that property is now yours,

congratulations and I wish you the very best of luck.

The successful bid of £21,500 for this property was made by Richard.

Richard, a builder, and pal and business partner Harriet,

or Harry as she's known,

are working together to create a rental portfolio,

with six under their belt.

However, they're not local

and both live many miles away in Lincolnshire,

and you know what they say...

# Everything looks fine from a distance... #

Congratulations on your purchase. Why this area?

Because the property prices

are a lot cheaper up here than they are back home.

So, how long is the commute between here and there?

Two and a half hours on a good day.

How do you work that? Are you doing a lot of the graft here yourselves?

-Yeah.

-He's doing it. He's doing pretty much everything.

He's kind of up here for two weeks at a time

and I'm up kind of sporadically.

A two-and-a-half-hour commute might sound a lot, but when you can buy

a property for 21 and a half grand, it may well pay dividends.

So, what's the game plan for this property?

What do you want to do with it when it's finished?

-This will be another rental one.

-Mm-hm.

-Yeah, just, you know...

So, is the plan to build up a bit of a portfolio?

Yeah. We're kind of developing them.

There's a lot of kind of urban regeneration going on in this area.

-Yeah.

-There's a lot of empty houses and they're trying to kind of get

people living in them.

What work are you going to do here?

So, the staircase is coming out down here.

We're going to build a wall in front of where the stairs are now.

We're keeping the stairs in the same place, but we need to replace them

to make less of a gradient,

because they don't meet building regs at the minute.

And then, the door's going to go underneath the stairs

and you're going to access the stairs from the kitchen.

We thought, we can't fit a whole bathroom upstairs,

but we're going to put a toilet just between the two bedrooms.

OK, so a toilet, not a shower room?

No, I think just a toilet.

I think, just from talking to people and things,

it's really beneficial, especially if you've got kids,

to have an extra toilet upstairs

so you're not coming downstairs in the middle of the night.

Absolutely. And, yeah, so you really are maximising your space.

-Yeah.

-Yeah.

-So, who devised this change of layout?

That was me, because you can't fit a sofa in here if you've got stairs

coming into it, can you? I'm all for my sofa and the TV.

It's certainly so far, so good for Richard and Harry's property portfolio.

Although the layout changes and sorting the damp in this house

will cost more than the change you'd find down the back of a sofa,

they have a healthy budget of 15 grand for the work.

And as Richard is a builder and plasterer by trade,

he'll be doing most of it himself,

although Harry will be lending a hand when she can,

as well as looking after the logistics.

How long do you think it will take to turn the place round?

This is probably the best one we've bought, actually.

And the others we're doing, three or four weeks.

Wow, so you've done this.

-Yeah.

-You've done it in three or four weeks.

-That's brilliant.

-We've had houses with no floor upstairs

and we've turned it round in kind of three or four weeks.

Amazing. But then I shouldn't be surprised,

you're a builder and plasterer, you bring so much to the job.

-Yeah.

-Yeah, and you can focus on it full-time,

-and, Harry, you'll be coming...?

-As and when I'm needed.

I'm a graphic designer, so I kind of work whenever, wherever.

I can take floorboards out, I can plaster.

-Can you?

-Ish. Not as fast as he can.

-Have you just learned on the job?

-Yeah.

-And how did you two meet?

How did this partnership come about?

-She was a barmaid...

-When I finished university, I worked at a pub

and Richard spent 90% of his time in the pub.

So, we've been friends for quite a long time, like, six or seven years.

-Yeah.

-You got together and just thought, do you know what,

we'd like to start off a portfolio.

I'm guessing you were maybe working for someone else and thought

you'd like to do your own thing?

Oh, no, I'm unemployable... I mean, self-employed!

It's working out well for you, though.

Yeah, it's not doing too bad, is it? Mm.

So, a matter of weeks, 15 grand, can't wait to see the results.

-Thank you very much.

-Thanks.

-Thank you very much.

-Thanks.

Well, that was interesting.

Harry and Richard's property partnership seems to be going

really well and it's great to see that they're taking advantage

of this regeneration area.

I'm intrigued to find out what happens

with those grand layout plans.

You can find out what did happen later in the show.

So, earlier, we found out how one of our properties ended up.

I can't wait to see the other two.

Let's waste no more time and find out.

MARTIN: Let's head back to the football-loving city of Liverpool now,

where I was having a ball looking around this double-fronted terrace

guided at between 75,000-80,000.

And just like the beautiful game, this was a house of two halves,

because it was split into two three-bed maisonettes.

Well, both of the flats are pretty much the same,

so it doesn't really make a difference which one I came into.

Large living room towards the front,

downstairs loo and bathroom there,

and then through into the kitchen.

I mean, I have been in houses which are definitely smaller than this.

The overall feeling of space continued upstairs with nice

high ceilings and three bedrooms.

No upstairs loo was a red card,

but any football fan could forgive it for the view.

No, it's not open fields.

No, it's not herds of wildebeests sweeping across the prairie.

It's Everton football ground.

As investments went, this looked like a Goodison,

not least because there was another maisonette with a similar

three-bed layout as part of the deal.

So, when entrepreneurial Dan and Jo snapped them up for £90,000,

they did it with football on the brain.

We've got two plans - A and B. The one for now, it's going to be

probably just to make now the two flats,

just one for a long tenancy agreement

and then the second one for a short tenancy agreement.

So we can host football fans in our place.

And then in the next year, we are going to probably change that,

go in the loft as well.

We've got already permission and documents for six flats.

Dan and Jo were nothing short of ambitious.

And their respective jobs as a builder and accountant

will certainly help them along the way.

But would they stick to their Plan A budget of 15,000

and do it in two to three months,

or would it be Plan B for £100,000 in a year's time?

Well, we're back seven and a half months later

to see what stage they're at.

Well, it looks like Plan A is in full effect,

as the two maisonettes remain.

And I'm loving this contemporary industrial decor

Dan and Jo have opted for.

Both downstairs bathrooms have had a trendy makeover.

And the reception rooms are both ready

for some post-match relaxation.

Rather than let one maisonette out long-term,

Dan and Jo have opted to keep both as short-term holiday lets.

And these cool mezzanine beds upstairs make space for luggage

and other touristy bits and pieces.

So, with Plan A complete, do they have their sights set on Plan B?

When we first bought this property, we had an option A and an option B.

But we've actually talked to estate agents and they just give us

a rough value of the new property when we finished.

We decided with these figures, then that might be not really clear

for us with our financing. So, we've actually thought then,

it may be safer and better for us will be just to prepare

all the property for the future,

for an extension, and then leave it as it is.

By adding bathrooms upstairs in both properties, the whole building will

be more easily split if they change their minds in the future.

But as Everton's stadium will be redeveloped in the Docklands area

over the coming years, they decided Plan B wasn't worth it.

But they still think that Liverpool and the surrounding area will bring

enough tourist trade to make it a viable business model.

So, lots has changed, but I'm more interested in the changes

in the building and some of the more unique design features.

We upcycled the balustrade in the corridor for a coat rack.

These benches have been created from the old joists,

they are structural joists,

so we just coat them and we just made them nice.

And they look a bit stylish.

Upcycling and recycling are all the rage,

but do remember to keep safety in mind

when it comes to the materials you use.

Local builder Jaryk here has been on board, along with Alajek.

They helped Dan out when he was busy at home in London.

The work itself only took two months but they didn't start straightaway

while they were looking at their options.

How did they fare with a £15,000 budget?

The total spend of this property,

with value of £35,000 during the whole project.

That takes Dan and Jo's spend to £125,000 for the two properties.

But what will two local estate agents make of their investment?

Well, my first impressions of this property is

you're sort of blown away from it,

from the amount of work that's gone into it.

And it is a really quirky property and I really like this.

It's been very well decorated throughout.

I think you'll find it's probably quite unique for the area,

which is a good sale point.

Because he is looking for short-term holiday lets, I think it's great

that it's got two bathrooms, two shower rooms,

so that will make it quite easy for busy times.

And I like the flow of the kitchen,

with the glass window that overlooks the yard.

So it makes it really family friendly as well.

I think the stylishness of the fittings

and the general finish throughout, certainly within the kitchen areas,

will serve the landlord well,

as he's looking to go down the short-term holiday let route.

Top marks, but will the relocation of Goodison Park affect the appeal

as a short-term football fan holiday let?

I think Liverpool in general is a great tourist city,

so during the summer months, you'll be able to diversify the type of

clientele that will come and rent these style of properties.

So, I don't think there'll be that much risk involved for the landlord.

That's a relief, but always do your homework

if you're planning a similar venture,

as this could have been a significant issue for Dan and Jo.

The current rates for each flat are £150-£180 per night,

but their annual income will of course depend

on how often they're booked.

The couple are satisfied with their set-up for now,

but if they decided to sell,

how much could the properties be worth?

I think on the open market, this would currently achieve 90,000,

which I believe is at the top end, but the finish will assist it.

I think a three-bed maisonette of this standard would achieve

somewhere in the region of £100,000.

I've been expecting around 85, maybe.

But if that's going to be the margin,

I'll be well above where I expected,

so I'm happy.

No wonder. If the couple manage to achieve £100,000 per maisonette,

they'd take home a profit of £75,000 minus taxes and fees.

But they're still set on this as a long-term investment,

which will keep the money coming in to fund their latest project.

We definitely have to hold on now, because we've got a baby, another,

so that's going to be a bit...just resting.

But we will see another year,

and then we will see what will come up then.

MARTEL: Earlier in the show, I was in Coundon in County Durham, where I saw this two-bed terrace.

The guide price of 12 grand was moo-sic to my ears,

and there were bags of kerb appeal,

with the property situated in front of allotments.

But inside, it wasn't such a pretty picture.

I don't like the look of this low-level damp,

and actually, looking around the place,

I see a lot of patches of it coming through.

The fusty trend continued to the kitchen,

which, albeit a good size, was long past its sell-by date.

A downstairs loo meant a perilous night-time trip to the bathroom

via the steep staircase.

And the two bedrooms upstairs had a "hole" host of problems.

I can tell the boiler's been here, it's been ripped out.

This place needs a lot of work.

Despite the low guide price, there was so much work to do,

I could see the profit margin disappearing before my eyes.

So, pals and business partners Richard and Harry would have to be

stringent with their 15 grand budget

after paying £21,500 for it at auction.

Fortunately, Richard was a builder and plasterer

who would be doing most of the work himself.

We're keeping the stairs in the same place,

but we need to replace them to make less of a gradient,

because they don't meet building regs at the minute.

And then the door's going to go underneath the stairs,

accessing the stairs from the kitchen.

OK, so who devised this change of layout?

-That was me.

-Yeah.

Because you can't fit a sofa in here

if you've got stairs coming into it, can you?

"Sofa", so good.

And I like the plans to add a small toilet between the rooms upstairs.

They plan to do the work in just three to four weeks,

which seemed a tall order, given they hail from Lincolnshire.

So, would they manage it?

We're back four and a half months later to find out.

Friends Richard and Harry have made good on their plans to move that

staircase, which really optimises the space in the front room.

The entrance to the stairs is now in the kitchen,

which is also looking pretty smart.

The bathroom has been made a little smaller

to accommodate a utility area.

The pals have managed to squeeze in an upstairs toilet using space

from the second bedroom, and there's a new boiler.

The two bedrooms have been replastered and redecorated.

They've really turned this house round.

But how did they deal with that mammoth commute?

When Richard comes up with his colleague,

they come up for usually a week to ten days.

So, it's not so bad.

But when they're up here, they're literally working, like,

-16, 17-hour days sometimes.

-Yeah.

And camping, like, on air beds in a derelict house.

-Oh, it's brilliant.

-Great.

-It's lovely!

Do I detect a hint of sarcasm there, Richard?

At least he had colleague Alan to help him out with the renovation,

which included adding a damp course, replastering,

as well as all the layout changes.

They also got the house rewired by a professional,

and Harry's family mucked in too.

Quite a few weekends, my sister came up, Rowena,

she was doing bits and pieces of painting,

and I've been up sporadically to clear the site, to rip out walls,

to make sure that they work. Er, yeah.

While the cat's away, the mice will play, and in this case. cat Harry

was back home in Lincolnshire during the week, coming up at the weekend.

So, is that why the timescales ran over?

It's taken us 25 days to do the renovation in total.

But because we took on a couple of other projects further south

in the interim, we've been very back and forth,

so it's probably about three or four months since we bought it.

But in total, yeah, 25 days.

25 very long days.

I wanted it done in 22.

But I couldn't do it.

Well, there's always the next one, Richard.

But for now, did they keep to their 15 grand budget?

Our original budget was 15,000,

and including Alan's labour, we spent about eight and a half,

between eight and a half and nine.

I've just done one round the corner and I've just spent about the same

on that, so I've managed to tweak everything and get the prices down.

That bodes well for future investments.

But how will their current one

of £30,500 fare under the scrutinous eyes

of two local estate agents, starting with the agent who saw it last time?

Since coming back to the property, it has been transformed,

with all the walls plastered,

a full redecor programme, kitchen, bathroom,

it's really made a nice job of it.

I can see that there's been quite a programme of refurbishment done,

because everything's freshly painted

and you can see it's a new bathroom, kitchen.

There's been a toilet added to the property upstairs,

which is really useful

when a property has a ground-floor bathroom,

because both owner-occupiers and tenants do prefer

to have an upstairs bathroom.

That upstairs toilet was a wise decision.

But will this project make them a profit?

They've spent £30,500 on this property, so what could it sell for?

I would expect this property to achieve

a sales figure of £35,000 on the sales market.

I would put this property on the market for an asking price of 49,950

expecting it to achieve between 40,000 and 45,000.

Quite a range there.

But the higher value could see a profit of £14,500,

minus taxes and fees.

That's almost half their total investment.

Impressive stuff!

But this was always going to be a rental property.

For the rental market, I think this property would achieve

£300 per calendar month.

If I was putting the property up for rent, I would recommend

asking £395 per calendar month.

We'd be happy with that. That's a good yield.

-12%.

-Yeah.

Good maths there, as the lower end would mean a yield of around 12%,

with the higher value taking it to a mighty 15.5%.

This pally partnership certainly has its financial benefits.

Does that mean it's bound to continue?

We have some exciting projects in the pipeline, I think.

We're just going to keep seeing what comes along and keep

-property developing, I guess.

-I'll do some more bigger stuff.

Yeah, that's next on the agenda, when I can borrow some more money.

Well, another day and another three properties in the bag.

Yes, and, as ever, a very different three stories.

And you know what?

We'll have three more for you next time,

-here on Homes Under The Hammer.

-Bye-bye.

-Bye-bye.

-Goodbye.