Bid for it, sit on it, flog it again: Why buy new when good second-hand furniture holds its value and grows more comfortable? John Windsor offers a guide to the best lots in London

Roger Ross does not understand why people buy household furniture from department stores. 'When you buy furniture in the high street, you make a massive loss,' he says. 'Resell it immediately and you would be lucky to get half the price.'

As a senior partner at Lots Road Galleries, the Chelsea auction house, Mr Ross is selling a houseful (75 items) of new department-store furniture, bought 'in a hurry' for pounds 40,000 last year. Split among several auctions, the pieces are expected to fetch a total of no more than pounds 6,000.

His advice to furniture buyers is: choose your dining table and chairs or sofa at auction, get two or three years' light wear out of them (tell the dog and cat to lay off) and then, if you want a change, send them off to auction again and get back what you paid, or even a bit more.

Anything 'with quality' and more than 40 years old, he says, is likely to fetch more after enjoying the hospitality of your home for a few years. But do not think of it as investment. 'This is the recycling business.'

Hard times have forced more furniture into auction and emboldened hard-up private bidders. In Lots Road, knock-down prices (especially after Christmas, when families finally dump the sagging sofa), the number of bidders has increased dramatically.

Three years ago the road's two auctioneers, Lots Road Galleries and Bonhams Chelsea, could expect 200 to 300 at viewings for their weekly furniture auctions. These days, 1,500 turn up with their dogs and prams and make it a social event. Private buyers dominate the bidding, but their numbers do not yet justify weekend auctions. The Galleries holds auctions on Mondays; Bonhams on Tuesdays. Another good hunting ground for furniture under pounds 1,000 is Phillips's downmarket Bayswater branch (every Monday) and its New Bond Street premises (Tuesdays fortnightly).

Tim Squire-Sanders, head of Bonhams's furniture departments in Knightsbridge and Chelsea, gave the following prices from his recent sales: a set of six 17th-century-style beech ladderback dining chairs with rush seats, pounds 308 (estimated price, pounds 250- pounds 350); a set of six mahogany Chippendale-style dining chairs, pounds 825 (est: pounds 800- pounds 1,200); a George III-style, twin- pillar dining table pounds 880 (est: pounds 800- pounds 1,200); an Edwardian mahogany wardrobe with central oval-mirror door, single drawer, with chevron and barber's pole banding, pounds 77 (est: pounds 80- pounds 120).

Mr Squire-Sanders sees friends 'putting their credit cards down for pounds 2,000 on brand-new lounge suites' but, like Roger Ross, he prefers spending small sums of cash at auctions. He picked up a small Peter Jones two-seat cottage sofa for pounds 33 and invested a further pounds 150 (for material) and hours of his wife's time in re-upholstering.

This breaks the first rule of sofa-buying which is: buy one you can put straight into your home, and avoid re-upholstering. The beaten-up Georgian sofa bought for pounds 300- pounds 400 could cost pounds 800- pounds 1,000 to be professionally upholstered and still look lopsided.

Far better to spend pounds 500 on a Victorian sofa in good condition, or on a modern, high-quality, hand-upholstered, hand-sprung sofa, keep it carefully for five years, then return it to auction.

Private buyers can score by bidding away dealers' profit margins, but you must avoid getting caught up in a battle with another private buyer. Remember that dealers bid to make a profit (and stop when the profit is exhausted) while private buyers bid to buy.

Which raises a point about the company you keep in Lots Road. Bonhams's market is predominantly for traditional old furniture, and the market-makers are private buyers of 'majority taste', as Mr Squire-Sanders calls it. The firm's 20th-century designer furniture is also sold there and in Knightsbridge, but not in Chelsea.

This means that Bonhams Chelsea is the place to snap up odd pieces of modern furniture that have been rejected by Bonhams Knightsbridge and are likely to be scorned by Chelsea's 'majority taste'. A lot comprising a Seventies smoked-glass-and- chromium table with 10 chrome- and-leather chairs and two glass shelf units, estimated at pounds 200, was unsold at pounds 80 before 100 bidders. It was later sold privately for pounds 150, and its new owner threw away the table and chairs and kept the shelf units. There is something to be said for minority taste.

(Photograph omitted)