GHOST STORIES

TIM CHILTON is a careful man, but as he walked towards Lloyds Bank in Finchley, north London, on a showery Friday in May, he was about to do something rash. In his hand was a piece of paper, an electronic transfer order worth pounds 50,000. Later that day, Chilton would trade the piece of paper for a house: an old stone cottage in the tiny village of Upper Mayfield near the Derbyshire Peak District.

Chilton has now started fixing up his new house. He loves the view from the back garden. It is very green and very beautiful and he says there is no way to improve upon it. But the house is cold, especially on the ground floor. Some say that this is caused by the damp; others say by a ghost - and not a very nice one at that.

In fact, Lowes Cottage has already almost ruined one family, Andrew and Josephine Smith and their three children. The Smiths were the last people to have owned Lowes Cottage, and in January they sued the two sisters who had sold it to them for not telling them about the ghost. The judge was not impressed by this story, and dismissed any idea that the house might be haunted. The press had some fun - ghost stories are like that - but the Smiths did not share in the amusement. They were living in a council house by then, having given back the keys to Lowes Cottage some time before. Now the house was the bank's problem.

A haunting and a subsequent court case are not the kind of things usually advertised when a house comes up for sale. So Lot 60 at the auction this April in Birmingham was described as: "Accommodation comprising ground floor sitting-room and ante-room, first-floor kitchen, lobby, dining-room and bathroom. Second-floor three bedrooms and lobby. Garden to rear. Two brick stores/workshops. Vacant possession. Guide price pounds 50,000." No mention of a ghost who tried to strangle occupants, of flying television sets, of a freezing cloud or a vile smell that moved round the house. Neither did it say that the previous owners had actually dug up said garden in search of bodies. The house sold for more than its guide price. Chilton paid pounds 56,000. He has an open mind about ghosts, which, it turns out, is just as well.

I met Chilton twice. Once in London, and once in Upper Mayfield after he had spent a rather nerve-wracking first night alone in his cottage. I also met the Smiths in their council house in Burton-on-Trent. Their case is not clear-cut. Andrew Smith, a joiner, represented himself in court. On reflection, he and his wife think this was a big mistake. "It was like we were having to battle the Establishment from day one as well as fighting for justice," said Josephine. "It was too big an issue for the Establishment to acknowledge: if the paranormal exists it would have opened a lot of doors for a lot of people in similar situations to us."

The history of Lowes Cottage changes dramatically according to who you talk to. Sandra Podmore and Susan Melbourne, the sisters who sold the 200-year-old cottage to the Smiths in 1993, insist that it has never been haunted. "There was nothing there, nothing at all," says Melbourne, a sewing machinist who now lives in the adjoining village of Mayfield. But the Smiths tell a detailed and different story, parts of which are truly frightening. They show me letters from villagers who say that Lowes Cot- tage has long been rumoured to be haunted. And the Reverend Peter Mockford, the vicar who came to investigate the case, believes it to be a genuine haunting. "I did experience some of the phenomena. I experienced the smell. Oh, it was vile. Unbelievably vile. Like rotting bodies. Truly foul," he says. "You would be hard-pressed to manufacture something of that line, particularly something that comes and goes. If it was there all the time you could say it was a dead cat under the floorboards. But it was not localised, and it tended to move around."

CHILTON knew nothing of this when he decided to have a go at bidding for Lot 60. A press agency has described him as a psychic who had bought the house because it was haunted. He laughs when I mention this. "Not true!" he pleads. In fact, the story of how he came to buy Lowes Cottage does contain a few twists of fate. And he is a spiritual man. But more relevant to the purchase was the fact that he was a former management consultant who had chosen to retire in his mid-forties. While he considered his future, he lived with his wife and two daughters in their roomy Edwardian home in Finchley, worth just under pounds 300,000, and did the housework. But that, he discovered, was not enough to fill a life.

In truth, he was having a bit of a crisis. He wanted nothing more to do with business. "Very bloody," he says, shaking his head. He thought about becoming a vicar and even sat through several terms of ministerial training lectures. In the end, though, he decided that he was more suited to following than leading at the Charismatic Church he attends.

But still he needed a project. And so, sitting in his Edwardian house that resounds with the machinations of many clocks, he took stock. "I had time and I had money," he says. He liked working with his hands. Why not buy a house at auction and fix it up?

That was last September but, as the weeks turned into months, he realised that what had seemed relatively easy was actually rather difficult. Chilton approached this as one would expect - with great care. If he found a property he liked, he would view it and video it. It had to feel right. He would then have it surveyed. Then he would decide how high he would bid. He never went beyond this mental ceiling. But property auctions are a kind of theatre, packed with people who are full of aspirations and desire. And so Chilton was repeatedly outbid. "Every door seemed to be closed. I had spent six months looking and I was finally going to give up and just buy an east London terraced house. How boring. With no feeling of involvement. It would be like buying a Ford."

He discussed the situation with his father, a retired civil engineer who lived in Nottingham and who wanted his son to return to his roots and buy a cottage in Derbyshire. Chilton remembers that they talked late on the night of 19 March. "Then my father starts saying that he very much wanted to get a letter to a mutual friend written and posted. Evidently Dad really did feel like he had to post that letter so after the phone call he put on his hat and coat and went to the post office and then came back and died. Just died. Heart attack. He was as fit a 75-year-old as you will ever meet." Chilton will not say what was in that letter, other than it convinced him that he should buy the cottage.

At this point, the catalogue featuring Lowes Cottage came through the letterbox. It sounded superb but he was suspicious. "I decided to view the day before the auction, which is a stupid thing to have done because usually I want a longer thinking time ... We drove up a lane into an exquisite little road. I thought, this cannot be it! You do not have this standard of property coming to auction."

The agent would not let him video. He thought this strange but let it pass as an eccentricity. The house looked great to him, if rather garishly painted. That night he wrote in his journal that he could think of no reason not to buy. On his way to Birmingham the next day, he prayed for guidance. Then he looked at the legal papers. There was no hint of a ghost. There is a standard question asking whether the vendor knows any reason the buyer may not have "quiet enjoyment" of the property. "It said no," says Chilton.

There were television cameras filming the auction, though, and half an hour before it began the auctioneer explained that this was because Lot 60 was rumoured to be haunted. "But I didn't realise he was talking about a present-day ghost," says Chilton. "I thought it was a Victorian-type ghost." He was pleased to get it for only pounds 6,000 over the guide price. It seems that Chilton had just bought England's most haunted house without even bothering to have a survey done. He could no longer claim to be such a careful man.

On the day he handed over the money, it all still felt fine. His father's letter made him feel that fate had led him to that cottage. What is more, a stranger had sought him out while he was at the cottage one day. "She had driven eight miles to tell me that she had an overwhelming feeling that the purchase was something important for me and that there was God's hand on it."

I made an appointment to meet Chilton on the day after he had spent a night at the cottage.

ANDREW and Josephine Smith have never met Tim Chilton, and perhaps it is better that way. They are not keen to talk about their experience: Lowes Cottage has been nothing but trouble for them. First there was the ghost which, as they see it, put them through hell. Then there was the court case, which they believe made them look like fools. Finally, and most recently, people involved in the case have been sent death threats. Staffordshire police are investigating and the Smiths are hoping that this will help clear their names. Telling their story takes hours and as we go through it the image of Caspar the Friendly Ghost flickers behind us on the television. It is their toddler's favourite, says Josephine, grimacing.

The Smiths bought the house in 1993 for pounds 44,000. Andrew had helped rebuild houses in Wales before, and Josephine was a theatre nurse. They had had money problems but were now credit-worthy again. They borrowed almost all the money from the bank and agreed to repay the balance of pounds 3,000 to the sisters. They moved in and started to paint and plaster. Soon, though, they began to feel something else was there. There was a horrible smell that was "the size of a person", which moved round the house. At night, Josephine says that she felt something pressing against her with such intensity that she was pinned to the bed. "It was difficult to breathe."

A friend who belonged to the Spiritualist Church offered to try to clear the air. She came with a bowl of water and a wooden cross. "The room filled up with this horrible smell," says Andrew. "It was dirty, that is the only way to say it. Dirty. Makes you want to be ill. If it's in a bad mood, the smell is terrible. The atmosphere was like walking through water ... that was the first time I knew for sure there was something supernatural in the house."

That something seemed to live mostly on the ground floor. Things moved, ceilings creaked, temperatures dropped, machines went wrong. The atmosphere sometimes became explosive. On one occasion, after a night during which Josephine felt she was being strangled, the family fled for two weeks. On their return, they dug up the garden, convinced that there must be a body somewhere. They were told that the haunting was related to a young milkmaid who had been sexually assaulted and murdered there in the 19th century.

They turned to the local church. The Church of England has an exorcism committee and every diocese has a designated team for such things. The Rev Peter Mockford is one of five vicars who deals with apparent hauntings in the diocese that covers Upper Mayfield, and says the team has 30 to 40 major cases per year. This makes him a ghost-busting vicar, really. "This ministry has been going on for hundreds of years. It has never been something that has been particularly brought out into the glare of publicity. I would say it simply happens, it's there and we deal with it as it comes. After you've done a few cases, it's fairly run-of-the-mill."

Very few cases are deemed to be genuine hauntings. At least 80 per cent turn out to be rooted in psychological or medical problems. Either that, or they are the result of someone playing with tarot cards or a Ouija board. But Mockford believes the Smiths had a genuine haunting. "In that situation, we generally pray through the house and bless it. If we hit a very bad case, it can take a number of visits and that is what we did."

The phenomena went away for four months but then returned. The Smiths were desperate to escape. Apart from the ghost, they were having difficulty meeting their repayments. But they had done a lot of work on the cottage and, at one point, had had it valued at pounds 72,000. They decided to advertise it as a haunted house, even though their ghost was hardly Caspar. "The first question people ask is, what is the worst thing that has happened in the house? I told them it was my wife feeling as if she was being strangled," says Andrew. "So that put them off." They had the house revalued and now it was deemed to be worth pounds 25,000. The sisters then sued them for the pounds 3,000 that they still owed and the Smiths countersued, saying they should have told them it was haunted. The publicity brought scores of letters and offers to exorcise. Some people would refuse to take no for an answer, and simply turned up outside the cottage, raring to ghost-bust.

The Smiths left the cottage to move into a council house last November. The case was heard in January. They say they were unable to present most of the evidence they had collected. Andrew Smith wasn't familiar with court procedures. The sisters had a barrister and Smith says he tried to copy his behaviour.

Andrew Smith goes upstairs and brings down a large box full of papers. This is their case that never was. We look through it. He is full of explanations, regrets, frustration. There is a grainy video of a light being thrown down the stairs. There are a lot of statements that will never go anywhere but this box. The Smiths are terribly sad about it all. Many have portrayed them as money-grubbing, but they insist they only wanted justice.

Judge Peter Stretton was scathing. He said that the house "is not haunted and never has been". He called the Smiths "devious and unreliable", and said that their tales were based on the novel The Amityville Horror. (Josephine says she has not read the book since she was 16. "I've got better things to do with my life than that.") The judge ordered them to pay the sisters the pounds 3,000 they owed, plus pounds 1,000 interest and legal costs of pounds 12,000. The Smiths say that they wanted to appeal but they missed the deadline.

The Smiths have been as traumatised by the court case as by the ghost. Their eldest child comes home from school and they hurry to clear the papers off the table: it upsets the children to even see the box. They beg me not to reveal their whereabouts in the article. Josephine, who is 37, says their lives have been "totally destroyed". They want to get another mortgage, but that will not be easy. Andrew, who is 36, says that some people land on their feet all the time but that he doesn't.

"It's like the guy who has moved in there. If he starts seeing things, then you can guarantee that more people will believe him because of what we did. Then the house probably will go up in value, you know."

IT WAS a warm day when I drove into Upper Mayfield. There used to be a gallows tree here and there is still a Gallows Tree Lane in the village.

Lowes Cottage stands in the road, without the buttress of a front garden. The house is goose-pimple cold. Chilton has survived his first night, though the dog was twitchy and there were sounds. Sounds? "Sounds of movement. Gentle rustling," he says. And the landing light was unreliable. And the torch wouldn't work, though he had checked it earlier and it had been fine.

A month on, there have been a few other signs. Tape-recorders have failed - it's handy that he couldn't video when he first viewed the house - and the lights are still unreliable. Chilton says that the house feels fine except for the ground-floor stairs. "I do not like them. There is something that feels quite off to me." I tell him that the Smiths say they had a lot of trouble with the ghost there. Chilton says that he has discovered an outside door that seems to lead into the stairs. "There used to be a doorway there and next to it there is a bricked-up window," he says. He drilled through the wall and found a void. "I think there might be a bricked-up room there."

Chilton, still careful, says he will have to wait and see what happens next. "It doesn't feel like a story ending," he says. "It feels like a story beginning." Above, left to right: one of the two sisters who sold Lowes Cottage to the Smiths in 1993, and who insist that it is not haunted; Andrew and Josephine Smith in the bedroom at Lowes Cottage. Below: the Rev Peter Mockford, who tried to exorcise the house at the Smiths' request Chilton (above) on the staircase that the Smiths videoed (below) while a light tumbled down it