Carbisdale Castle at Ardgay, Sutherland, is up for sale at £1.2m after its owners dropped the asking price by £300,000.
The castle was bought by a London investment firm in 2016 from the Scottish Youth Hostel Association with plans to build a ‘world class residence’ at the property.
But the partly-renovated ancient pile was put on the market last April and a new owner was found, but the deal fell through after the required finance failed to materialise.
Robert McCulloch, Head of Estates and Farms Agency for Scotland at Strutt & Parker, said: “After last year’s marketing period, Carbisdale Castle remained under offer until this spring when – due to funding issues on the purchaser’s side – they were unable to complete the purchase.
"It is therefore back on the market now at a reduced price aimed to stimulate interest and achieve a successful sale this year.”
Carbisdale was built in the early 1900s for Mary Caroline, Duchess of Sutherland, the second wife of George Sutherland-Leveson-Gower, 3rd Duke of Sutherland, following a bitter family split over her inheritance.
The marriage was not well liked and the will was contested by his son, the 4th Duke, with the Duchess sent to Holloway Prison for six weeks after being found guilty of destroying documents linked to the inheritance.
Eventually, a financial settlement was reached and the family agreed to build the dowager Duchess a new castle – as long as it sat outside the Sutherland Estate boundary.
The dowager Duchess built it on the most prominent hillside site just outside the estate, with her new home overlooking her former family’s land and railway line.
It was widely considered the Duchess located the castle to spite her husband’s family and the settlement agreement.
The castle’s tower only has clocks on three of its four faces - the side facing Sutherland is blank - allegedly because the Duchess did not wish to give the time of day to her late husband’s family.
Colonel Theodore Salvesen, a wealthy Scottish businessman of Norwegian extraction, bought the castle in 1933 and it was used as safe refuge for King Haakon VII of Norway and Crown Prince Olav during the Nazi occupation of Norway in World War II.
Captain Harold Salvesen subsequently inherited the castle by family descent and gave its contents and estate to the Scottish Youth Hostels Association (SYHA), which started welcoming overnight guests in 1945.
The castle remained in the ownership of the SYHA until the costs of owning and maintaining became too great.
It was purchased in 2016 by the current owner who wanted to turn the youth hostel and function venue into “a private home of exceptional quality”.
Plans were approved for a swimming pool and spa with the castle tennis courts due to be opened up to the public.
Today, it sits in a partially-renovated state.