Country retreat? No, it's SW16

With its formal gardens, folly and graceful exterior, Tate Gardens has all the hallmarks of a Victorian country seat - except it's in deepest south London. Cheryl Markosky reports on a clever conversion in the original home of the Tate collection

In the current slow market, prospective buyers are thinking long and hard before parting with substantial sums of money for big houses. Barratt Homes' conversion of the old billiards wing of the very first Tate Gallery in Streatham, south London, is no exception.

It looked like a buyer had snapped up the 36ft-by-12ft billiards room that has been transformed into a huge double-height living room, which has an additional mezzanine floor with five double bedrooms, en-suites, dumb-waiter lifts and balconies overlooking the courtyard. But it turned out the buyer was not serious and the price for the home, now known as No 12 Sir Henry Tate Mews, has been reduced from £1.4 million to £995,000 to move the sale along.

It is not a quick process shifting houses at the upper echelons of the market, something Barratt Southern chairman Clive Fenton accepts. "This is probably the most unusual, indeed unique, new home in London, so we always expected it to take a while to find its buyer. It needs a love match with its buyer and we are in no doubt that it will happen soon," he says.

It is easy to see how someone could fall in love with the idea of living on the grounds of Sir Henry Tate's magnificent Park Hill House, opposite Streatham Common. The sugar magnate bought the property in 1874 and inside housed his burgeoning collection of British art. No 12 Sir Henry Tate Mews is the pick of the properties on the six-acre site and is arguably cheaper than the masterpieces - such as John Everett Millais's Ophelia or John William Waterhouse's Lady of Shalott - that originally hung on its walls.

The refurbishment of the Grade-II listed building began four years ago, and the scheme is split between developer CPS, which has created eight luxury apartments in the main house, and Barratt, with 23 new townhouses in the coaching yards and three new houses round a courtyard at the back. Barratt has also converted some of the original outbuildings and stables, including the old billiards wing.

Park Hill was built as a merchant's country house around 1790 and Tate lived there until the end of the 19th century. The house was extended between 1870 and 1880, then sold in 1919 to an order of nuns, the Congregation of the Poor Servants of the Mother of God, who established St Michael's Convent here. One of their design contributions was turning the woodland "secret garden" into a Garden of Gethsemane grotto, complete with a statue of the crucified Christ.

Untouched for nearly 80 years, the convent eventually closed and the house and grounds were sold off to developers. One of the advantages of living at Tate Gardens is the location: orchards, woods and parkland in close proximity to Streatham Common. The residents have a herb garden, formal walk, folly and lake rather than the usual back garden.

To give Barratt its due, the company has spent upwards of £60,000 to get the original gates repaired and restored by specialist craftsmen. "With its lodge, impressive gates and sweeping carriage drive, it looks exactly like the country seat it used to be in the 18th and 19th centuries. Tate Gardens has given it a new life for the 21st century, though carefully preserving its unique character," says Barratt Group's chief executive David Pretty.

House builders have caught on to what buyers want in these post-postmodern times. They want a blend of old and new, preferably period exteriors that do not look out of place in their surroundings so the neighbours still speak to you, but with cutting-edge toys and gizmos inside.

So will 12 Sir Henry Tate Mews sell at its reduced asking price? If the stately cream-painted outbuildings could be picked up and moved to somewhere like Chelsea or Kensington, the price would double, or even treble. Streatham does not sound as sexy as Swiss Cottage, or even Southwark.

We joke about London name changes like Battersea becoming "Chelsea South of the River" or Brentford described as "New Chiswick". Maybe there's a case for Tate Gardens being re-positioned in more upmarket West Norwood. It is in the posher Victorian end of Streatham, after all. Or perhaps the arrival of Tate Gardens will have the same impact on Streatham as Tate Modern had on London's South Bank, where prices soared when it became the place to be. Maybe that million-pound price tag isn't so high after all.

No 12 Sir Henry Tate Mews is the last property remaining at Barratt Homes' Tate Gardens project (020-8669 6666)