Interiors: Belhaven, Williamsburgh, Elie

Creating a haven by the sea is a dream for many but making the dream real is another matter. Sometimes, just stumbling upon the right house can prove the catalyst.

In 2005, while visiting friends in Elie, Kathryn and Alex noticed an interesting cottage for sale. Close to the beach and large enough to accommodate friends and family, this early 19th-century property set their plan in motion.

They put in a bid for the house and were surprised by the lack of competition, given the huge demand for second homes in this, one of the prettiest East Neuk villages.

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"There were a number of viewers," says Kathryn. "But it seems people were put off by the amount of work necessary to make the house comfortable."

Previously occupied by an elderly couple, the cottage was in sore need of rejuvenation. The couple had never tackled such a project, but had clear ideas of what they wanted to achieve.

"It was about maximising the light and creating airy and open public spaces, yet retaining some of the private, more intimate areas that were a feature of the original house," says Kathryn.

Making the most of views to the sea and hills was also a priority, as was a robust, low maintenance interior which would leave the couple plenty of time for trips to the beach.

Keen to make use of environmentally friendly and locally sourced materials as far as possible, the couple contacted Arc Architects, a Fife-based practice that specialises in ecological design and conservation of historic buildings. Senior architect Kirsty Maguire worked closely with Kathryn and Alex and time invested in the original plans paid off.

"Once the work got underway there were few changes," says Kathryn.

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The project also called for the help of a quantity surveyor and structural engineers, with everyone involved maintaining respect for the building's history. Given its C-listed status and location within a conservation area, negotiations with local planning officials were expected.

"Our approach was sympathetic to the historic building context," says Kirsty, who recommended traditional materials such as lime render that supported the planners' requirements.

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The interior was practically devoid of original features, however, after a renovation in the 1920s when the former single-storey structure was extended upwards.

"This gave us scope to create our own space without feeling a sense of guilt that we were removing period features," says Kathryn.

The property has effectively been rebuilt with new floors, internal walls and a new roof. Even services – electricity, gas and water – were renewed at their mains connections. The work took almost a year to complete.

A local stonemason repaired the front elevation, re-pointing using traditional lime mortar, the porosity, durability and breathability of which promotes a healthy building. Other exterior walls were coated with lime render and a mineral paint. The roof slates were too badly damaged to be reused, but were salvaged for use by a local sculptor.

While the cottage exterior retains a strong sense of history, once inside the door the couple wanted an immediate and continuing "wow" factor.

The entrance now leads into an open-plan kitchen-dining area, giving an immediate impression of light and space. This area occupies the depth of the building, with light from the south-facing front filtering through to the rear. Underfloor heating was fitted throughout the ground level (where there's also a double bedroom and bathroom) and flooring this entire area in slate increased the sense of space. In the bathroom, the slate contrasts with a contemporary suite.

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Given the extent of work required, the couple used the opportunity to improve insulation. Kirsty recommended a natural insulation made from hemp grown on UK farms, which was packed into the roof and new internal walls, the latter finished with environmentally friendly paints.

Oliver Debenham, of Bodan Design and Manufacture, in Edinburgh, designed and handmade what Kathryn describes as the "chop and chat" kitchen; its contemporary style reflected by sleek Philippe Starck Ghost chairs in the adjacent dining area.

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This modernity is balanced by a gentle helping of Scottish tradition in the form of tartan curtains, as well as a tartan rug and cushions in the living area upstairs.

The attic in the cottage had been accessible across the building's width, but this new first-floor living area stretches into a section of roof space, creating a dramatic, double-height area floored in solid oak from Newtonmore-based Russwood and furnished with a wood burning stove.

The most attention-grabbing features of the interior are perhaps the spiral staircases linking the ground and first floor (where there are also two bedrooms) then the latter with the remaining roof space. Made to order by Spiral Staircase Systems, they have timber walls that curl through the interior like ribbons, possessing an arresting sculptural quality.

A "crows nest" was formed in the remaining attic space. "A new dormer window created a special place in the roof giving views to the sea," says Kirsty.

Now, having achieved their dream with the cottage, the couple find it difficult to pinpoint just what it is that they love most about it.

"It's just such a special place," says Kathryn; "Gazing out to sea from the window seat at the top of the house, listening to a storm while snuggled by the stove, or enjoying great company in our chop and chat kitchen. It's all magical."

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Belhaven, Williamsburgh, Elie, guide price 575,000. Contact CKD Galbraith (01334 659988

• This article was first published in The Scotsman, Saturday June 5, 2010