BBC's £1m property experiment reaps more problems than profit

It always looked too good to be true - turning a £100,000 property into a £1m residence in seven easy moves

And, after some unimpressive deals, bitchy arguments, accusations of damaging a listed building and a possible showdown with the tax man - viewers of BBC2's Million Pound Property Experiment may feel they've been led up the garden path.

The idea was engaging in its simplicity and amusing in its execution. Justin and Colin - interior designers who have been lovers for 18 years and are imbued with just the degree of campness that is necessary for a weekday audience on BBC2 - are forced to make common purpose with Nigel, a strait-laced property developer. Their aim: to buy and sell properties, starting at the bottom of the ladder and making their way towards a £1mpurchase.

After the BBC, which provided the seedcorn investment for the purchases, was repaid with interest - the proceeds would go to the Children in Need charity. With the gay couple bringing their expertise and Nigel's understanding of buying and selling, surely this was a marriage made in TV heaven?

In fact, Nigel's conservatism immediately put him at odds with his two colleagues. (Cynics might wonder if this is what the producers wanted.)

But that appears to have been the least of the problems. For a start, the profits on the purchases have not all been impressive. The first acquisition, a two-bedroomed terrace house in Birmingham, was bought for £103,000. After redevelopment costs, the property was sold for £143,000 - a profit of £15,000.

The second, a flat in Stratford, east London, brought in £10,000 on an outlay of more than £200,000. After that, things took a turn for the worse. Property number three, a flat in Bristol, made a profit of just £2,000, after renovation costing £44,000. A five-bedroomed house in Harrogate, made barely £1,000, though the one that followed did net a more impressive £35,000.

Tonight viewers will see how they fare in Edinburgh - before their final attempt to make money in Belgravia, the most expensive area in the country. As Justin and Colin have "progressed" up the property ladder they have had to increase their loan from the BBC. Last night, a BBC spokeswoman declined to reveal the figures until the last programme has been aired but assured The Independent that licence-fee payers will not lose out.

Despite the name of the series, she denied that it had set out to prove that it was possible to move effortlessly from a £100,000 property to a £1m home saying: "It is to show the opportunities and challenges in the UK property market. The series does not suggest that anyone can own a million pound property without considerable investment."

Meanwhile, the show has raised eyebrows among financial experts, who are intrigued by the sale of a Grade II listed Georgian town house in Leamington Spa for £499,000 - plus an extra £10,000 for "fixtures and fittings". Accountants point out that had the purchaser paid £509,000 for the property, a further £5,390 in stamp duty would have been due. The government levies a tax of 4 per cent on any property worth more than £500,000. It is illegal to inflate the costs of fixtures and fittings to hide the true value of a property, in order to sneak in under the duty thresholds. David Young, senior tax consultant at Berg Kaprow Lewis, said: "Legally the fixtures are not part of the building and do not have to be included in the price. But it becomes controversial when inappropriate values are put on the items." An attempt to pretend otherwise may constitute fraud, for which the buyer could be sent to prison.

Mr Young added that the Inland Revenue have recently been paying close attention to house purchases that fall just below the threshold. A BBC spokeswoman stood by the £10,000 valuation, which was approved by a lawyer.

Meanwhile the Leamington Spa purchase has led to a battle with the local Warwick District Council - this time over alleged damage of a listed building.

A spokesman for the council said it gave the BBC consent to make alterations to the property "but they have used false window glazing that is not in accordance with the agreed plan". The BBC said it has "agreed to carry out work on the windows to bring them in line with the standards required".

WHERE THE MONEY WENT

HARBORNE, BIRMINGHAM

Original price: £103,000

Costs: £25,000

Sold for: £143,000

Profit: £15,000

STRATFORD, EAST LONDON

Original price: £137,500

Costs: £66,300

Sold for: £215,000

Profit: £11,200

CLIFTON, BRISTOL

Original price: £179,000

Costs: £50,000

Sold for: £231,000

Profit: £2,000

HARROGATE

Original price: £236,000

Costs: £97,915

Sold for: £335,000

Profit: £1,085

LEAMINGTON SPA

Original price: £358,000

Costs: £116,999

Sold for: £510,000

Profit: £35,001