Villa Källhagen is a tranquil waterside retreat surrounded by rolling parkland, yet is just a short bus ride from Östermalm. The original Red Cottage inn, dating from 1810, is now in the garden behind the new hotel, which was built in 1990. The sunny rooms feature the best of Scandinavian design, with bright fabrics, and light fittings designed by Josef Frank of Svenskt Tenn fame, although the lobby and café could do with sprucing up. An excellent restaurant serves classic Swedish food with continental influences. Just 20 rooms, so book well in advance.