News: a contemporary house inserted into the twelfth-century ruins of Astley Castle in Warwickshire by Witherford Watson Mann has won the RIBA Stirling Prize 2013 for the greatest contribution to British architecture in the last year.

This is the first time London studio Witherford Watson Mann has been nominated for the prize, which is awarded annually by the RIBA to a building designed by a UK-registered architect. It is the first house and the first restoration project to win the award in its 18-year history.

The two-storey residence squats within the chunky sandstone walls of the abandoned mediaeval castle, creating a holiday home for up to eight guests.

A new system of wooden floors and ceilings creates living areas and bedrooms in the oldest part of the building, while extensions added in the sixteenth and eighteenth centuries are now used as entrance courtyards.

"It's an extreme retrofit in many ways," said RIBA president Stephen Hodder. "It sends out great messages about conservation."

The 2013 RIBA Stirling Prize was awarded this evening in a ceremony at the Central Saint Martins campus in London, a building designed by last year's winner Stanton Williams.

Witherford Watson Mann saw off competition from bookies' favourite the Bishop Edward King Chapel by Niall McLaughlin Architects and a housing development from previous winner Alison Brooks. Other shortlisted entries included a museum that mimics volcanic formations, Sheffield's notorious Park Hill housing estate and a cluster of university buildings in Ireland. See the full shortlist »

Past winners of the prize include David Chipperfield for the Museum of Modern Literature in Germany and Zaha Hadid for the Evelyn Grace Academy in London and MAXXI Museum in Rome. See more Dezeen stories about previous winners »