Martin Roberts is an author, entrepreneur, property developer and the co-presenter of the BBC’s hugely popular Homes Under the Hammer. He tells Julia Cahill about his own approach to investing in real estate
“I don’t get to go to the auctions we cover in the show. My producers know I would end up buying something. It would be a case of ‘Let’s meet the buyer… oh, it’s me,’” laughs Martin Roberts, writer and presenter of the hit BBC daytime show Homes Under the Hammer.
The programme, now in its 14th year and 21st series, follows the fortunes of property developers (and would-be property developers), from the thrill of the auction sale, through the ups and downs of renovation, to the finished project.
It may not be to the taste of ex-culture secretary John Whittingdale, who recently attacked it as being part of a “static daytime schedule”, but for the 2m viewers who regularly tune in, it is a guilt-free pleasure to be enjoyed with their morning coffee. And for some, it has triggered the start of an investment journey. Indeed, auctioneers often credit the programme with bringing a new wave of buyers through their doors.
A self-taught property investor who grew up in Warrington and now lives in the West Country, Roberts says he feels proud to give people the encouragement they need to leap into something “exciting and fulfilling”.
“People like seeing normal people they can relate to on the show – rather than high-flying investment types. You have to mitigate the risks of property investment as much as you can, but people see there’s another way to provide income and financial security,” he says.
“We have done a lot to demystify auctions. We encourage a lot of ordinary people to come into the auction rooms. You find more of a mixed bag of people than in the past – more people who are not full-time investors and developers.”
Roberts may have helped fuel the UK’s passion for buy-to-let, but he says he would like to encourage more first-time buyers into the auction room, too. He bought his first house in his twenties, doing it up and selling it on while pursuing his early career as a journalist. His property portfolio now ranges from holiday lets to student digs. “I live and breathe this,” he says, “I’m a developer myself.”
He manages his own portfolio, calling on his “dream team” of specialists from plumbers and plasterers to accountants and solicitors when he needs to. “I have bought and sold through auctions throughout my career,” he says. “I buy through other means, too, but I am constantly keeping an eye on the auction catalogues. There is nothing quite like that feeling when you are about to wave goodbye to thousands and it is so quick.”
It is not the lure of a cut-price deal that is the real attraction, he explains. “The auction room is an amazing place to buy. It takes away uncertainty. Buying and selling is so uncertain in the UK, right until the last minute, with people backing out for no reason on the day of exchange. That’s why a lot of professional property people buy at auction – for the certainty, rather than the idea that they will pick up a bargain.”
No doubt it is his first-hand experience that makes Roberts such a compelling communicator on the subject – be it on television, radio, through the property courses he teaches, or through his books. Asked about the pitfalls to avoid, he instantly recalls the story of one successful bidder losing her deposit after the bank declined her mortgage. The lender was concerned that the house she was buying sat between two commercial properties, which could affect its future sale as residential. A second bank shared the same concern and her deposit was lost.
“Although you have 28 days to complete, it’s a recipe for disaster if you’re not copper-bottom sure that your finance is in place when you bid,” advises Roberts. “Traditional lenders will lend on auction property, but you have to give them time to sort out their paperwork. Get someone from the lender to go to the property and do a valuation. You can’t stumble blindly into an auction and sort your finance out afterwards.”
He also urges bidders not to skimp on carrying out all the necessary research and checks on a property just because of the auction time limit. “You have to be sure that what you are buying is what you think you are buying. Not visiting the property is an absolute no no.”
And whatever you do, stick to your budget: “People do get auction fever. You have to stop yourself getting carried away.”
Take it from one who knows.
Click here to download EG‘s property buyers’ auction guide
What would I buy…
For £100,000
Roberts describes two-up, two-down terraced houses in the North as the bedrock of any portfolio. For £100,000 he would buy such a property in Stoke, Derby or Manchester. That budget would cover costs, contingency and £10,000 to get it “spick and span” to let out or sell on.
For £250,000
“From a yield point of view, I’m a big fan of HMO,” says Roberts, who recently bought a student let in Plymouth at auction. For £250,000 he would buy a six-bedroom HMO with £30,000 priced into that budget for renovations.
For £500,000
“I would buy a seaside property, close to the beach to use with my family and as a holiday let when we’re not there, somewhere in the South West. I would budget £450,000 to buy the property and £50,000 to do it up.”
For £1m
“The London market is not my area and it scares me. I don’t want to blow my budget on a London flat, so I would go for a big Georgian-type property in a spa town such as Harrogate or Cheltenham. I would spend some time doing it up, converting it to flats and selling them on.”
Martin Roberts presents Homes Under the Hammer on BBC1 and a weekly property show on talkRADIO. His latest book, The Property Auction Guide, will be published this autumn. www.martinroberts.co.uk
