For a house that started life as a modest Regency villa on Nerano Road – off Dalkey's Sorrento road – Khyber Lodge has had more than its share of drama in the last decade.

Firstly, it underwent a clever transformation in the early-2000s under owners who specialised in period restorations. They retained the simple, low-slung villa exterior, but behind it was renovated and extended to create 2,750sq ft (255sq m) of accommodation.

The result was impressive, creating a rear Mediterranean villa style façade dropping three storeys into the hill with steps sweeping down to the garden below.

0 of 7

So far so clever. The house was placed on the market at the zenith of the boom asking €3.5 million, and sold in August 2006 for just that. The buyers, instead of moving in and enjoying the lovely home they had purchased, were dogged from the outset as timing worked against them. The transaction later became the subject of a court case.

Court case

The buyer, Jonathan Ryan, acting on his elderly mother's behalf, had secured a loan of €4.1 million from AIB for the purchase of Khyber Lodge.

To repay the loan he immediately placed his and his mother’s adjoining Sandycove homes on the market. But the market began to head south, and both sales took several years to complete, and although all the proceeds went to pay the €4.1 million loan, there was still an outstanding debt of €2 million.

The sorry story entered the commercial court last year when Ryan, through his mother, sued the solicitors’ firm that advised them and AIB over the transactions involved and legal advice they received.

Back on the market

Meanwhile, Khyber Lodge was placed back on the market in a bank sale in 2011 asking a somewhat optimistic €2.4 million.

It sold in April of this year for €1.5 million, though the transaction didn’t show up on the residential property price register until September. Now it’s back on the market for auction through Sherry FitzGerald on November 20th with a guide price of €1.65 million.

Even for an investment this is an unusually fast turnaround, but all becomes clear when it turns out that the new owner – a neighbour to the rear – bought Khyber Lodge for its substantial garden, or half of it anyway. A good portion of the northwesterly garden has been sequestered by them to extend their own garden at the rear, and a new cut-stone wall now divides the two.

The only other changes to the property include the replacement of underfloor heating, repainting and re-carpeting throughout and an interior designer has been employed to stage the property for sale.

The results are impressive, mainly because this house has long been a refurb of the highest quality. Even with the compromised garden there is still a 60ft landscaped garden divided between lawn and gravelled patio.

Stained glass

The original overhaul included a new roof, rewiring, replumbing and the installation of sash windows. To the front, the house retains its Regency style and proportion and the two interlinking receptions to the left of the hallway have simple vaulted ceilings, deep coving and matching marble and cast-iron fireplaces. On the other side of the dark stained hall is the sittingroom. The corresponding room to the rear was sacrificed to accommodate more hall and stair space and to introduce light through a beautiful stained glass skylight.

The John Daly fitted kitchen/breakfast room is done to a contemporary cream painted design and is a stylish living space with two huge box bay windows overlooking the garden and double doors leading out. Everywhere clever storage has been incorporated whether in window seats or behind kitchen shutters. A staircase off this area rises to the master bedroom off which is a roomy en suite and French windows to the top terrace.

Growing family

Downstairs off the main hall the rest of the accommodation is located, making this a potentially ideal home for a growing family that want their own space. Here there are three bedrooms including two doubles with dual aspect windows, a bathroom, utility room, custom built wine cellar, and a gym now stands where previously there had been a Gothic style bathroom with an enormous Jacuzzi at its heart.

The new owners presumably chose auction over private treaty as a selling method because the house has now served its purpose via the garden acquisition, and they’ve no reason to retain it for any longer.

It’s likely they’re also hoping it will attract the interest of investors planning to avail of the capital gains tax break before it comes to an end in December. A house of this calibre in this location can command up to €5,000 a month as a corporate letting and it would certainly be suited to the task.

It’s an imaginative play by the neighbours who have managed to substantially increase their garden size and now look set to make a tidy profit into the bargain.