Bungalow, faded 70s decor, three beds, yours for...£4 million

Fourteen months on, little has changed. The three-bedroom home has the same pink bathroom suite and the same 1970s decor.

But it is back on the market - this time for £4 million.

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The 1950s property is in the exclusive Sandbanks enclave overlooking Poole Harbour, which goes a long way towards explaining its hefty price tag.

The natural harbour is the second biggest in the world, behind Sydney.

And the house, Flintshore, sits on the water's edge, with views across the sea to the Needles and the Isle of Wight. Beautiful countryside surrounds the area.

Neighbours include Portsmouth FC boss Harry Redknapp and reclusive Body Shop investor Ian McGlyn.

The current owner has been granted planning permission to demolish Flintshore and replace it with a 7,000sq ft, six-bedroom house with indoor swimming pool, cinema and gym.

Francis Payne, of estate agents Tailor Made, sold the bungalow to the developers Yorklake Homes and is selling it again.

He said the developer had quickly applied for permission to redevelop the site. The plans were accepted in January.

"The owners then put the bungalow back on the market and said they would sell it as seen for £4 million.

"It is in exactly the same condition as when they bought it. It still has the same gaudy Seventies interior and bathroom suite.

"The attraction is that planning consent has now been given so there is great potential.

"A new purchaser would not have to stick to the plans. They could apply for something else but they now know that planning should not be a problem."

A recent survey found that Sandbanks was the fourth most expensive place in the world to buy property - behind London, New York and Tokyo.

The estate agent is also selling an empty plot of land suitable for a house of 8,000sq ft for £4.5 million.

Mr Payne said: "The property values in Sandbanks just keep going up, especially on the waterfront.

"People are prepared to spend more now than six months ago and even more than 12 months ago. The land is worth more than the properties on it.

"We have sold perfectly good houses to developers who then demolish them and build new ones.

"We have already had five people come and look at Flintshore and we have had offers of £3.5 million that the owners have rejected."

The bungalow's new owners will have to spend about £1 million to demolish it and build a new home.

When the work is complete, the property could be worth £6.5 million.