Out of the stable.

A courtyard house in London acknowledges history and expresses Modernist pleasure in manipulating space and light, and in simple materials and vibrant colour.

Seth Stein's house is in a former builders' yard in Kensington, a residential London district. Spreading out from the site are quiet leafy streets lined by handsome stuccoed terraces and luxuriant gardens, but towards the heavy traffic of Cromwell Road, the stateliness begins to break up and looming overhead are monoliths of an international hotel and interwar block of flats.

The builders' yard had been a stableyard, built in the 1880s over the old course of the Counties Creek river; today there is the regular subterranean rumble of the London Underground. When acquired by the Steins, the site was open on the south side to the street, at the rear were remnants of Victorian stables in a state of extreme delapidation, while the western edge was lined by an old factory. Even given such dereliction, this is a conservative borough and prising permission from the local planners to build a modern house (there are hardly any here) is always a feat.

The Stein house is very discreet. Peering through a perforated metal gate along the pavement, you see only a small forecourt of white stones, a wooden deck and aerofoil louvres shading a wall, as delicate as a Shoji screen, of white plaster and opaque glass. Above this flat plane, a concrete cylinder split in two stands sentinel.

Behind the inscrutable screen Stein has created an atrium house in the proper Roman sense, in spirit but not in execution akin to the sequestered houses of more southerly latitudes. While remote from the local model of the London terraced house, it does represent a real and personal attempt to express in one building the evolution of a tiny fragment of the city. The house revolves around a long rectangular courtyard, extending at the front and rear over two levels. The introspection has the curious effect of distancing the house from its closest monolithic neighbour, the flats next door.

The extent of the building is large -- 325 sq m below, 140 sq m above -- but the house sits lightly on the site, the scale is domestic and there is the usual domestic arrangement whereby the ground floor is given over to living space, and the upper to sleeping. On the west, the ground floor of the factory is one large kitchen/family room looking on to the garden, its linearity accentuated by the extraordinarily long kitchen counter. At the back, the Victorian remnants have provided supporting beams and columns on the ground floor; at the upper level the original brick shell with the old windows and exposed trusses has been restored and encloses the bedrooms.

Elaborating on domestic convention, Stein has established promenades architecturales continually focused on the courtyard. The sense of movement induces a certain restlessness, but there are still centres, like the womb-like study on the north-east corner and the calm bedrooms. Like the classical Japanese garden (Stein was much influenced by travels in Japan), the courtyard has a static, dreamlike quality derived from use of stone, one silver eucalyptus, a swathe of miniature bamboo and a plane of impossibly green grass maintained at a height of several inches.

You enter the house through a kind of horizontal retort, a narrowish pass between a brilliant pink wall and a cylinder of silky grey concrete -- the base of the same cylinder glimpsed outside, it encloses a cloakroom. On a roof terrace above, the curving walls embracing seats create a modern gazebo. Set askew the building line, the glowing plane of the wall turns right-angled to form the inner converging wall of a short corridor, compression seeming to shoot you into the great expanse of the kitchen. The pink plane continues to the kitchen's long west wall.

In walking right from the entrance, you move from monumentality to the unsubstantial, for here you are confronted by a gallery, 28 m long, running the length of the building's east side and anchored at the far end by the solid sculptural form of a curving staircase. A wall of light forms the right-hand side of the gallery. On the left, a skin of frameless glass barely separates it from the exterior, turning the corner at the end to become the transparent wall of a sitting room. Open to the sky through a glass canopy, this is a contemplative white space looking down the courtyard's length to a terracotta wall and an unadorned flight of stone steps to the upper terrace. Purity and transparency are interrupted by colour: by Marc Newsom's vivid sculptural chairs and by a square of orange metal that, inset into the glass wall and enclosing a sliding door, frames the eucalyptus and a distant square of pink wall visible through the terracotta plane.

In this architecturally literate and finely detailed house, the resonances are various. Worked by Stein into a coherent composition that is essentially Modernist in spirit, they emerge like notes in a piece of music as you move from one part of the building to another. The notes are sufficiently muted not to disturb the composition, but strong enough to register.

The pink wall evokes both Matisse and Mexico and layered planes of colour hint at Barragan's influence. Upstairs, the main bedroom, cool and white under old rafters, has one of the few windows out of the building, on to cottage gardens to the north, and suddenly you are transported into a very English realm -- as you are when regarding Stein's skilful salvaging of Victoriana. Colour is used by Stein to create reverberations: the grey silky concrete is picked up by the silvery bark of the eucalyptus; the green of the grass is echoed in a kitchen alcove and a Newsom chair, and it is the grass that becomes unreal. The house has a cinematic quality, its design interwoven with fragments of memory that, half-perceived, tug at your subconscious. Illuminated by night, it becomes more diaphanous still, glowing with colour, the architectural and botanical outlines sketched in light against the dark.

In the context this is undeniably an alien, to some a formalist, presence, but as a demonstration of how to make a modern impression when circumscribed by tradition and desire for a comfortable family house, it is in execution lyrical in all its parts, and on plan a graceful and inventive response to the site.