Eight designers remain to battle it out to win the life-changing design contract at one of the UK's top hotels.

Arriving at Michelle's Brighton studio, the contestants discover that this weeks' task is an unusual brief. Gordano School in Bristol has four tired common rooms that need some love and attention. Working in teams of two, the designers must spruce up the common rooms and an adjoining office. The two weakest designers will be sent home, upping the stakes in this third challenge.

Before they depart for Bristol, the designers pitch their ideas to their youngest and most particular clients to date, as the school's students arrive at the studio to hear their plans. The teams must come up with plans that reflecting each house's unique animal mascot and colour, creating an impact but remaining practical enough to survive daily use by the students.

Helping Michelle decide who has met the brief is guest judge Sophie Robinson. Renowned for her love of colour and all things bold, judging these bright common rooms is right up her alley. Michelle and Sophie are blown away by some of the designs but underwhelmed by others, and when the teams return to Michelle's design studio to hear the verdict from Alan, two designers find that that their time has come to an end, leaving just six designers to fight another day.

This week, the designers arrive in Brighton and find out it's time to work solo.

Michelle tells them to get into the spirit of the staycation, as they're off to north Wales to a glamping site. With a chance to showcase their individual abilities, they'll each have a shepherd's hut to transform into a boutique bolthole in the tranquil Welsh countryside.

With only five designers remaining, competition is getting tough. Before they get going, Michelle gives each of them a bespoke brief and tells them their client is a brand new business, so they need to work their magic. They'll be designing their smallest spaces so far, so practicality is key, but they must also be sympathetic to their surroundings. With so little to choose between them, she tells them that she wants to see hands-on skills – as well as maximum creativity.

The designers arrive on the Llyn Peninsula near the Welsh coast and are impressed with what they find at the site. The newly built huts are a blank canvas, with one designer worried that they might ruin what's already a lovely space. With briefs ranging from rustic chic to romantic, each designer takes a different approach to turning these tiny spaces into luxury living accommodation, with the challenge of an ensuite shower room and an outdoor space thrown in for good measure.

As the challenge comes to an end, the storm clouds roll in, as do the judges, Michelle and the legendary Laurence Llewelyn-Bowen. Two huts strike them as pitched perfectly at the target market, but they are less sure about the other three, questioning whether the designers have taken the right approach for the rural surroundings.