It used to be an unremarkable 1960s bungalow with plastic-framed windows. You might still drive past without noticing it - but if you stop and look, you realise it has mutated into something much more interesting. And the more you investigate, the more remarkable it becomes.

The blue front door with its two little oval spy-holes at different heights alerts you to the fact that this is a thoroughly bespoke project. The house is a rural retreat for a distinctly high-powered couple - one tall man, one shorter woman, hence the two spyholes - who like to garden and go fishing. They bought the bolthole a few years back but never had any intention of leaving it in its suburban state.

Not only was the house quite at odds with the character of the village, but it had been built before the arrival of Rutland Water. This is a large reservoir lake, made in the early 1970s by flooding valleys between Oakham and Stamford. A nearby village vanished beneath the waves for ever, but this one survived on its high spit of land in the middle of the lake - effectively the world's biggest moat.

Sitting low in the bungalow, however, you couldn't even see the lake. Something had to be done. Architect Julian Marsh, from the new-wave Nottingham practice Marsh and Grochowski, was summoned to advise. As it happens, one of his two Rutland clients is well used to commissioning famous architects for big cultural projects: this was no ordinary low-budget house job. The work cost £140,000 - about what the bungalow cost to buy.

Bit by bit, Marsh transformed the brick-and-tile box - so at odds with its mainly historic neighbours in this quintessentially English village - into a home with Tardis-like qualities. You cannot believe, on looking at the front, that it can possibly be as spacious as it is inside. Instead of adding an extra floor, Marsh opted to gut most of the existing house and extend out the back and to one side. This allowed him to create a series of interlocking interior spaces, gently rising in steps to an elevated terrace at the back. Now, sitting in the house, you have a commanding view across garden and fields to the water glittering below.