Plans are being drawn up to redevelop Undershaw into 11 flats
The Surrey house where Sir Arthur Conan Doyle wrote the Hound of the Baskervilles looks likely to be turned into flats, the local council has said.
The future of Grade II-listed Undershaw, at Hindhead, has been in doubt since 2004 when the hotel which occupied the building closed.
Earlier this year, conservation groups suggested it might become a visitor centre for nearby beauty spots.
But Waverley Borough Council said plans were "fairly advanced" for the flats.
Conan Doyle built the house, which overlooks the Devil's Punch Bowl, at the end of the 19th Century and lived there for about 10 years.
It was considered a healthy environment for his wife, who suffered from TB.
After the hotel closed, plans for a housing development were rejected by the council and the house fell into disrepair.
Sensitive to character
Two years ago, an urgent works notice was served on the property, and the council sent in workmen to put up scaffolding to support the roof and board up all accessible windows.
Council spokesman Matthew Evan said a developer was now proposing to knock down an extension built in the 1930s and convert the property into 11 flats.
He said a planning application had yet to be submitted but the new plans were much more sensitive to the character of Undershaw.
"They protect the gardens and the sweeping terraces which are the main focus of the site and which provide views across the Surrey Hills area of outstanding natural beauty."
He said talks had taken place with the National Trust and the Youth Hostel Association to see if plans could be drawn up for community use.
"The reality is that those don't seem to be viable options," he said.
"There is a lot of money involved in just getting the building restored and it looks like a residential scheme is likely to be the most viable."