You have to be made of fairly strong stuff to buy a neglected house for over half a million pounds and then fork out the same again to do it up. But this is precisely what the Cottinghams, wreck-transforming veterans, chose to do in the Cotswolds with a Grade II-listed rectory.

You have to be made of fairly strong stuff to buy a neglected house for over half a million pounds and then fork out the same again to do it up. But this is precisely what the Cottinghams, wreck-transforming veterans, chose to do in the Cotswolds with a Grade II-listed rectory.

"We found the house in the summer of 1997, after an enormously long search," says Beverley Cottingham. "I realised it had lots of potential, but there was so much work to be done. We had just finished a major project at Burley on Hill and couldn't face another one so soon."

Beverley, a non-executive director, kept hunting in the south Cotswolds and eventually found a place - but lost it on the day of exchange. "There was very little on the market, so I went back to the Old Rectory and engaged myself with the idea of what the house could become."

Luckily, the Cottinghams were not alone in their quest to turn an ugly duckling into a magnificent swan. Having spent three years converting the west wing of an old house in Rutland with architect Paul Bancroft, who worked with the restoration guru Kit Martin, they knew they had the right man for the job.

The rectory is in the village of Ampney Crucis, a few miles from Cirencester, which dates back to Roman times. The cross in the churchyard dates from 1415 and inside there is a list of rectors of the village from 1304. Ampney Crucis has its own village primary school and the Old Rectory is close to the M4 and M5 motorways. The nearest train station is 20 minutes away at Kemble - a run of 75 minutes to Paddington Station.

The two-storey house dates to 1650 and the layout was a bit of a mish-mash, with a wing added in Victorian times, along with a back extension in the Twenties. A long, dark, central corridor looked inward, with odd little rooms tucked off. Bancroft's design meant opening up this area to create a better proportioned five-bedroom house and putting in windows to face an internal courtyard.

The planners were broadly sympathetic, but there were some restrictions. "I would have liked French doors leading into the courtyard, but wasn't allowed them," says Beverley, "and we had to copy the size of the original windows." The main building work took about four months. Water was pouring in from the roof, there was no central heating, no damp-proof course and the plumbing was dodgy. The builders installed a new central heating system, redid the roof using some of the original tiles, and added en suites and shower rooms, which required a new drainage system. The English oak flooring was restored, too.

"The biggest saga was putting in the Aga," Beverley recalls. "A chimney had to be built to take the flue and we had to open up the room next door. We found the original inglenook, but it was missing a beam, and getting the right-sized replacement wasn't easy. Also, we had to lay a separate oil line just for the Aga."

Beverley and her husband Peter, a former chief executive of a marketing agency, escaped most of the initial chaos, which happened before they moved in. Their three daughters, now in their 30s, had already left home, but their son Tom, 17, had to live in three cramped rooms with his parents upstairs while the builders whistled, hammered and played the radio around them.

The work took three years to complete. When the main house was finished, the Cottinghams tackled the ruined coach house, making sure that they kept to the general layout of the two-storey building and the spirit of how it was once used. "We put in proper stairs where a loft ladder would have rested, and the bedroom upstairs is the area where the groom would have slept. The carriage was once stored on the upper storey under the English oak-beamed ceiling and the tack room is the kitchen."

Today, the courtyard coach house annexe is one of the main selling points of the property. Relatives and friends enjoy staying here, according to the Cottinghams, which is not altogether surprising - the ground floor has a roomy entrance hall, wet room, kitchen and living room, with a vaulted ceiling, exposed timbers and a wood-burning fireplace, while the mezzanine floor contains a bedroom, loo and a landing that can be used as a second bedroom.

Getting rid of the internal development carried out in the Twenties in the main house, in favour of a design more in keeping with a former rectory, has paid off. The family have formed an alliance with The Original Reclamation Company in Cirencester, which has helped them to source everything from old stone to fireplaces to replace the Seventies fixtures and fittings in the house.

Bancroft has also introduced an element of flexibility into the house. "We have managed to fit in 60 people for dinner in the drawing room," says Beverley, "and the drawing and dining rooms and large hallway are all great for entertaining. Equally, when it is just the three of us, the cosy breakfast room works well."

The ability to contract and expand is the latest "must have" on buyers' lists these days. Upstairs, the fifth bedroom could be used as a dressing room linked to the master bedroom and bathroom, and a door on the landing can close off the third bedroom and shower room opposite, turning it into a private guest suite.

Another plus is that The Old Rectory is a chintz-free zone. Beverley has selected a neutral colour palette - her favourite paint shade is gardenia, a creamy off-white with a hint of yellow. "This means you can ring the changes with soft furnishings, rugs, pictures and ornaments. I have two sets of loose sofa covers, yellow for summer and terracotta in winter, which makes the room fresh or cosy."

After seven years in their carefully restored home, the family is taking on another restoration project, a townhouse in Cheltenham. "We've been in the country for 20-odd years and like the idea of walking to wine bars and the theatre."

Agent William Leschallas says, "There isn't much like The Old Rectory on the market. The house is not overly large, so it could appeal to a family, the young or even an older couple. The 1.29-acre grounds have a formal landscaped area with lovely lawns and mature trees and it is not a huge task to look after it."

The Old Rectory is for sale at £1.7m through Butler Sherborn (01285 883740)