When a top-end developer got hold of an old mansion overlooking the Thames at Richmond, the decision to convert it into eight luxury flats was a no-brainer.

But that was in 2002. Five years later, the torrent of cash flooding the property market — City bonus money, eastern European money, even old Arab petrodollars — is washing up a new breed of house purchaser: they want location, they want grandeur, and they don’t want just a gym, a home cinema and a thermostatically controlled wine cellar: the latest pinnacle of desirability is your very own ballroom.

When Octagon, the developer in question, bought Gordon House in St Margarets, it was part of the 14-acre former Brunel University Twickenham site. It came with a chapel and stable block, has views over Old Deer Park and, along the river, to Isleworth Ait and the London Eye.

The company soon ditched the idea of eight flats, flirted briefly with just three separate units, then decided to go for broke. Gordon House is to be renovated and restored during the next 18 months to all its original Grade II*-listed splendour. Right now it’s a building site, and not for sale, but already there have been discreet approaches by the agents of several foreign buyers, all anxious to procure that rare commodity: a truly grand home with vast rooms and an imposing facade.

The mansion, described by Nikolaus Pevsner as “early Victorian Italianate”, is certainly a catch. This is possibly, at 14,000sq ft, the largest private house on the river between Twickenham and Westminster. There’s a socking great Scarlett O’Hara staircase in an imposing stone-flagged entrance hall, a clock tower and a dining room that will seat 30, with elbow room. Best of all, though, is the ballroom, part of a genuine Robert Adam extension to the house with dome ceiling, friezework, the lot. The fireplace is so valuable the developers have moved it to a lockup location for the duration of the project.

Two years is a long time in property price terms, so it’s anybody’s guess what the house will eventually sell for, but the mood is bullish.

“The new demand for single grand houses is such that we’ll get an end user happy to pay north of £10m, probably £12m or so,” says Colin Nicholson, Octagon’s development manager. “There’s a long way to go, and we will be employing artists, joiners, stonemasons. This is not something we can rush.”

Nicholson hopes to find paintings behind the panels of the Adam ceiling. This will involve building a birdcage scaffold and hiring specialist restorers to peel back layers of paint. He has Adam’s original plans, and intends to copy details from the architect’s work at Kenwood House in north London.

It’s a laborious business, but it should be worth it. Robert Leigh, managing director of estate agency Featherstone Leigh, will be handling the eventual sale, and he talks of a selling price of more than £13m.

“London is increasingly affluent, and the market for mansion houses has expanded,” he says. “There has been a definite shift towards grander family homes. In Richmond we have started to get inquiries from Russian relocation agents — and we’ve always had media stars and Arab royalty.”

In recent times, Gordon House has been used as university offices, but Nicholson has unearthed a long romantic history. In 1758, it belonged to a General Humphrey Bland, who gave Robert Adam his first contract in England, to design and build that ballroom extension.

Later it became the home of Francis Jack Needham, second Earl of Kilmorey, who ran away from school to join Wellington’s army in the Pensinsular war, and was a member of the notorious Hell Fire Club. While still married to his first wife — of two — he eloped to Europe with Priscilla Hoste, the teenage daughter of friends. In 1851, he brought her and their love child, Charles, to live in Gordon House.

At the time, St Margarets was a fashionable area of large villas surrounded by small estates, and Kilmorey intended to stay only until he could move into a bigger, better house he was building next door. Sadly, Hoste died in 1854, before the new house was complete, and Kilmorey commissioned an Egyptian-style mausoleum for her body. At £30,000, it was extraordinarily expensive for its time. The grief-stricken earl left, hauling the mausoleum with him on his travels. He returned in 1868, depositing the tomb in a corner of the estate, linked by tunnel to the house. It is said he sometimes dressed in a shroud and lay in his coffin on a trolley, to be pushed on practice runs from the house to his eventual resting place.

The tunnel is long gone, but Octagon will retain all the interior period features at Gordon House. The master suite, in the upper part of Adam’s extension, will have a staircase leading from the sun-filled sitting room, via the new gym, to the new pool. The kitchen will be state-of-the-art, and staff will be accommodated above the old stable block.

The Surrey-based developer is not unfamiliar with converting large period properties back into single dwellings, and has restored Chester House on Wimbledon Common — once bank training offices — and the Manor House in Walton-on-Thames, a former school for deaf children. This one is something special, though, with a restoration budget of about £4m.

“I love doing this building, but it’s one of the most complicated we’ve done,” says Nicholson. “It’s a massive market, but you have to get it right. You need it all: quality, history, location and grandeur. That’s what these people are looking for.”

For somebody out there with exceedingly deep pockets, the search will soon be over.

- The Kilmorey Mausoleum, St Margarets Road, will be open to the public on July 7 and September 15 or 16, 1pm-5pm. Call the Environment Trust (Richmond) on 020 8891 5455

- Featherstone Leigh, 020 8940 1575, www.featherstoneleigh.co.uk

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