'All it needs is a lick of paint...'

Turning a ramshackle wreck into your dream home may be a tempting thought, but are you prepared for the reality - and the expense?

Buy a new home and there is little to do but arrange your precious objects. Buy a wreck and you may find yourself tackling a project the size of the Forth bridge. So why are people keen to renovate and does it make financial sense?

Buy a new home and there is little to do but arrange your precious objects. Buy a wreck and you may find yourself tackling a project the size of the Forth bridge. So why are people keen to renovate and does it make financial sense?

Former Stepping Stones contributor Sarah Hosking has restored six wrecks over the years: "All my properties have been pretty dreadful but I'm drawn to ravishingly romantic locations and cheapness." She admits to "loving houses" despite many discomforts including once going three weeks without water.

Ms Hosking has even re-roofed in the past and her work has paid off as she now owns outright a Victorian village house in Stratford-upon-Avon worth over £120,000 but she has no plans to repeat the process. "I hope to die here one day - eccentric, old and happy," she says. "I look in estate agents' windows and weep at the insensitivity of the wealthy who have wrecked their beautiful houses and just don't see it."

Fellow wreck-addict Jane Burnett goes even further. "I can't muster enthusiasm for anywhere that's been pristinely done up. I like making my mark and knowing that I really turned a building around." Over the last 15 years Ms Burnett has renovated three dilapidated properties and recently tried to buy a double-fronted house in Herne Hill, south London. "It had been squatted and was in a terrible state. The agent who took me round thought I was mad, but I couldn't help being excited by its possibilities even though my children were horrified." Jane made a second visit, accompanied by her trusted builder. "I knew it had dry rot at the front, and there were black spores everywhere, but he unearthed more dry rot at the back of the house and advised against buying it."

Danny Usher of Burnet, Ware and Graves, who eventually sold the house, says: "We've got three negotiators and around 1,000 applicants on our books. Out of these we have 600, in a separate book, who are specifically looking for wrecks."

Burnet, Ware and Graves recently sold a batch of unrenovated Dulwich properties in south-east London through sealed bids, prompting an "amazing" response. "On some properties we had more than 20 offers, and all above the guide price. There is little around here selling for under £400,000. These properties are underpriced and very tempting to people who want everything to their taste." But Mr Usher warns wrecks are not always moneyspinners: "There are a lot of dreamers out there who see a deal and don't realise what's involved."

Mark Potter of Lane Fox also has buyers competing for unrenovated homes. "It's amazing, you get something ramshackle and people are prepared to pay silly money just to do their own thing." Lane Fox is currently marketing 1&2 Long Copse Cottages in Basingstoke, Hampshire, for around £500,000. Set in an idyllic location, surrounded by woodland with views of the river Loddon, they are "in severe need of modernisation" but have yet to capture the imagination of renovators with vision and the £100,000 needed to transform them into a fabulous home with a suggested end value of around £750,000.

The Southern Homebuilding & Renovating Show runs from 9 June and will feature hundreds of renovation opportunities and plots currently available. Plotfinder newspaper has a hotline and database of 3,500 renovations and plots for sale; yet finding a viable property may not be easy.

Carol Adams recently scoured Hornsey in north London for a four-bedroom house requiring renovation, with no success. "Estate agents often bypass ordinary buyers, preferring to get a fast buck from builders." Ms Adams found herself viewing properties already refurbished by developers, but was unimpressed: "Why would anyone spending £500,000 on a house want a cheap and nasty kitchen?"

David Snell, author of Building Your Own Home, agrees that agents often collude with developers. After experiencing difficulty finding a plot, Mr Snell eventually bought a "wooden shack" in Kent, which he later demolished in order to build his own house, by using the following tactic: "I went in on Saturday and asked the temporary staff if anything had come in during the week. I followed them to the filing cabinet and saw what was in there, so on Monday I was able to say 'what about that place you haven't told me about?' I then embarrassed them into selling it to me." Mr Snell is clear on motive: "If an agent sells to a builder he gets a fee, and another when the builder agrees to sell through him. He also gets his hoarding on site for the time it takes to renovate."

Mr Snell runs Plotfinder Challenge in Homebuilding and Renovating magazine, which each month finds three examples for a buyer looking to renovate or self-build and compares their individual merits. This month he found wrecks in Powys, Wales, for a buyer who wants to renovate. The buyer chose one, at a cost of £100,000, which needs £40,000 of work but which will ultimately be worth £175,000. Mr Snell advises the following to ensure financial gain: "To make money, find one which basically needs rebuilding or where flare and imagination can take you into a different price bracket. Mere tinkering won't do."

He believes that agents mislead people who try to buy wrecks but are "whacked back" by lenders who won't give mortgages on badly dilapidated homes. "Agents should market them as plots, not as habitable homes."

Burnet, Ware & Graves, 020-7733 1293; Lane Fox, 01256 474647; Plotfinder 24-hour hotline, 0906 557 5400 (calls £1 per min); 'Building your own home', Murray Armor & David Snell. Ebury press.