A RUN-down bungalow which sold for £2.7 million 14 months ago has been put back on the market at £4m - in exactly the same condition.

While some property developers can spend thousands on a project, all the owners of this Sandbanks home house did was secure planning permission to have it demolished and replaced with a six-bedroom luxury house.

Land in the exclusive area of Poole is worth considerably more than the luxury houses built on. And despite the bungalow's gaudy 1970s decoration, would-be owners are lining up to put in offers.

Francis Payne, of estate agent Tailor Made, sold the bungalow to developer Yorklake Homes Ltd in November 2005 and is selling it again on the developer's behalf.

He said: "The plans were accepted in January this year and are for a 7,000 square foot, six bedroomed house with indoor swimming pool, cinema and gym.

"But once planning was in place the owners put the bungalow back on the market and said they would sell it as seen for £4m pounds.

"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."

The bungalow, called Flintshore, sits on the water's edge with views across the sea.

Neighbours in the area include Premiership boss Harry Redknapp and reclusive Body Shop partner Ian McGlyn.

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

As well as the bungalow, Mr Payne said his firm was also selling an empty plot of land suitable for a 8,000 square foot house, for £4.5m.

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

"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 £3.5m that the owners have rejected.

"Once the weather gets warm, the Bentleys and Ferraris will start to arrive with more people wanting to look it.

"I don't expect a developer to buy Flintshore. It will be a wealthy chief executive or a company chairman."

It is thought the new owners of the bungalow will have to spend about £1m demolishing and replacing it. The new home could be worth around £6.5m.