Will the rigid fiberglass allow the wall to breath if its solid? If there is any issue of damp in the wall ie is there a damp course & how effective is it? Putting up fiberglass cladding could just be creating a huge damp problem behind it. As it is currently if the wall is solid all the way through it can breath & any condensation/water (& depending on where you live there will always be water of some sort in solid walls, thats why modern building always introduces an air gap cavity which stops water permeating the inner wall, obviously if you're in somewhere hot like Arizona its probably not a problem) will wick away either through the stone (if its permeable, like Sandstone) or mortar (pref if its lime and not concrete which isn't good at getting rid of water). Looking at the photos the fireplace wall looks like it has been mortared with cement being a newer addition, but I think apart from a small bit next to the fireplace the rest of the lower wall mortaring especially in the kitchen looks like it could be original and hopefully is therefore Lime. Which is much more breathable and a better treatment than concrete. Given the open airy aspect of the kitchen & lounge which appears to have some form of heating ducting on the main window wall, it is unlikely whether OP has ever experienced damp problems already if walls are solid, closing/hiding the walls off incorrectly may cause it.

Keep the stone wall, change the windows. The stone is such a cool feature, and makes the space feel unique. Lots of styles can be worked into it, cottage to transitional. If going the cottage route, smaller window panes would look great.

The stone wall is beautiful. It's hard to recognize its beauty, character and value against a kitchen/flooring that contradicts it in style. My vote is to save the wall and in the process of remodeling choose a style (traditional/transitional, french country?) that complements it. The painted wood ceiling also lends itself to the styles I mention above. Take what has lasting character (the wall & ceiling) and go from there!

It will then be easy to choose a new facing for your fireplace--white substantial traditional/transitional fireplace surround. This will immediately brighten up that space!

More thoughts after seeing the pics of the family room:

--Add white framed windows with charming mullions.
--Paint ceiling beams white or sand/re-stain to a lighter wood tone.
--Remove slate floors (too dark & cold feeling especially with the stone wall) and replace with wood.
--Remove paneling & replace with drywall.

These changes will update the room, and soften the stone wall surround.

I would be personally in favour of keeping the stone wall - when you renovate in your own style (regardless of what that is) I think they will be a real feature. I do think, though, that all the wood around the windows needs to go and they should be updated. But that's only me. I also love the wooden beams - people pay a fortune to get these installed and they seem, like the stone, to work with a huge variety of styles. Check these examples out from around Houzz. There're loads more as well if you do a search for 'white ceiling and wood beams'.
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i'd keep the all of the stone as well as the beams. This will be a wonderful cottage with wood floors and white-ish walls, the right lighting and furnishings.

I would keep the stone wall and paint the wood white. Let the rest be fresh and more contemporary and the stone wall remains as the focal point and character of the room. Keep the furnishings minimal, even if antiques mixed with modern

We had one stone wall in our kitchen and also one at the end of a hallway going into our bedroom. Decided to wash them with very diluted paint to lighten/mute them a bit but kept them. To my surprise we have gotten several comments from people who think the stone is really cool. I would lot have chosen to put them in but keeping them h as worked out well.

Am I right in visualizing that the stone is actually foundation and goes all the way through to the outside? If so I would keep it with some of it exposed, but maybe insulate and cover just sections of it where that look might fit into your design. It would make for nice wide areas for window seats.

My first thought was stone wall keep it but I see they used big slabs of stone thats the same problem I had with my fireplace and I hated it the solution was to restone it in smaller stacked stone and with yours I would add a 3 to 8 inch counter along that wall to place plants m pictures etc

please keep the stone. its the wood panelling that makes it look dated and awful, get rid of that and paint light to brighten everywhere up

Looks like your stone wall wraps around into the stone fireplace. What about creating a wooden mantle at the appropriate height and cladding the chimney breast above it in a white washed wood/plaster. This will lessen the massiveness of the stone but still allow it to flow with the stone wall. I say don't paint the stone wall. More sympathetic flooring in the dining room and painting out all the plywood(?) panelling in the living room will make a huge difference. I agree that the stone wall is the best architectural feature and should be kept.

Yes, keep the stone! And the beams. I agree with everyone who said the paneling throws the whole look off - seems too modern for the rest. Once you get hardwood floors and some big, comfy, upholstered furniture, it will be very inviting.

I like the stone on the walls as most of it looks original. However, the stone work around the fireplace has to go. It is not well done. Look at magazines and replace it with drywall and a mantle that suits your style.

What a charming space! I don't know your budget, but I would get rid of the wall paneling and paint the walls a nice, soft off white and I would keep the beautiful, rustic stones on the walls. Those stones give your space a unique, rustic & welcoming feel. Keep the ceiling beams. They add character to the space. Now the fireplace, I would just cover it with the same style stones as the wall and put a nice, rustic mantel on it. If you can't find the same style stone for the fireplace, then I would just cover it with layer of stained concrete. Have fun and please post an after picture when you are done. Good luck!

Ops...forgot! I would get rid of the vents on the fireplace and place them on the floor (budget permitting, of course). Have fun!

If you want something new and different, consider looking at some my options and designs for seemless 3 dimensional walls

YES ... KEEP before I even saw the pics. Great character that is out of the norm. Soften it up with lighter colors and furry rugs but KEEP

I would mute the fireplace by blending the seams and rock the same not so prominant seams I guess. . And as much as my husband would not want to, I would have a light color paint on walls not paneling.

I love the stone....I think incorporating it would be easiest as there are so many things that it would look great with! But, do what you like - you're going to live with it! Good luck!

I love the stone. It brings character. But I would go with wood flooring and lighter walls. And glad to know you are gutting that kitchen. Those cabinets/counters need to go. I am a big fan of lighter, brighter kitchen/food areas. Nothing beats light and bright for a fresh clean feeling environment.

The stone is beautiful. It would be a shame to remove it. Its like so many others said - whats wrong is all the stuff around it. If you take a critical look at the space, there are too many elements that are the same, repetitive and competing. All those small windows, the paneling, the ceiling paneling, the tiles....its all too much. Also, I don't know if its the photo, but the ceilings look low to me. If that's the case, you want to minimize the patterns. And if the ceiling is low, I'd remove the beams if they are not structural - they only make a ceiling feel lower and definitely not "airy" in this circumstance (I love beams, but only on high or vaulted ceilings). If you have the budget for it, change the windows so they are bigger. Minimize the number of panes - the fewer the better. None would be amazing (though maybe not possible) If you can take the windows higher, even better. I'd consider a light, warm taupey-grey wood floor with a matt finish. A wide plank might look better than a narrow one. I would paint all the walls, ceilings, trim etc all the same colour of white (again a warm taupey-grey white without so much as a hint of pink, blue or yellow tones) and I would paint the vents on the fireplace wall in a matt grey that camouflages best with the stone (I've even seen "stone" paint at home depot). Once they are painted, they'll blend in and you won't even see them. I wouldn't bother removing the fireplace stone. Just hang a huge gorgeous painting there - something you love, that inspires you. And you can always mount a clean simple shelf below it if you want to look of a mantle. Change the screen so its more modern and stands out less (blends in with the stone more). I love what Albert Frey did with stone in his incredible Palm Springs houses. You can mix modern with stone to beautiful effect. How exciting. Good luck!

Gorgeous. Would kill for the wall and fireplace. Natural surfaces like wood and stone are always winners.

Please Please keep the stone wall, get rid of the small windows above it and all the wood, add some sleek custom made large black or charcoal framed minamalist windows, which sit on the stone wall and fill the whole space above it. Keep the beams but paint in a shade of grey or charcoal. Keep the fireplace but add a large recycled timber mantel piece as low down above the fire as is possible, then panel above that in vertical timber panelling in dark grey timber or painted this colour, try and regrout or grout over existing grout in a light grey colour. Decorate in a warm minimalist style, furniture with sharp lines, but not heavy looking furniture. Statement pieces would be large oversized long soft sofas and a very large lowline square coffee table. Add fabrics for texture and softness with a mainly muted colour pallet (create a colour board to get the colours matching and right) add large soft scatter cushions, perhaps a couple in tribal patterns, you can mix indiginous styles along with plain coloured and different textured cushions. Keep and restore the dark floor tiles, in the fireplace room but replace the kitchen floor tiles with timber. Add a large beautiful tribal style rug and place most of the furniture on it. Add morrocan style or similar wall lighting with one or two statement pieces hanging down, one in the corner. I love your stone wall! In the kitchen, install charcoal country style doors with white granite or granite look bench tops. Have fun!

The stone walls and beams are keepers. You are right on with the wood floors and light walls and I would keep the wood frames on those windows. I have redwood beams throughout my kitchen/dining/living room and love them. I almost did a white paint on them and so glad I didn't! The worst part about your fireplace is the too light grout lines. You could darken those lines and see if you like it before the expense and mess of replacing it and add a large mantle that matches the beams. I'm looking at the stone fireplace that divides my living room and kitchen and the grout lines are a medium gray. I would strive for an equal balance between stone/wood/light walls.

keep your wall - switch out the floor to hardwood or high end laminate - get an awesome wood table and chairs to set it off... get rid of the "bits" - like the fish and fire alarm and go from rented cottage to swiss alps retreat! New counters and paint on the cuboards - or new ones would make set it all off - make it look like you paid a fortune for the wall... if after you have done that the fireplace still bugs you - switch out the screen - but you may be suprised!!!!

I actually don't mind the wall- it's the fireplace that is the eyesore, to me. That grout! I would keep the wall and paint everything, including those beams, light and bright. And all that flooring is mismatched- when that's all out of there the wall might not bother you at all. But definately do something with that fireplace.

Other people wrote a lot of practical considerations - about insulation, condensation, etc. which come before decor, in my opinion.

I do hate the cement- mortar - grout that was used- it looks like a mistake ( if it was actually cement it may not be so stable either) but whatever,the make up it should NOT be contrasting with the stone, which would seem more muted without it. Someone above said she was able to lightly wash a stone wall with paint or glaze; I would look at the best ways to get that "shouting" grout toned down and then see what it looks like to you.

I say keep the stone wall. You can always update around it. I don't know what look you are going for. However, nice white washed wood floors with gray like wooden cabinetry or gray washed wood floors and black cabinets with glazed edges would look so chic. Just me. Good luck please keep us posted. Would love to see the new pics

I would expand my kitchen & put cabinets at window & table in middle of kitchen. Remove the stone. Can you find a place outside a wall of house or garage? A flowerbed?

Or keep stone & put a window seat there& paint it white. Leave the stone natural.

Charming! Keep the stone, beams, and fireplace. Use your money to take out the windows and framing. Add stone to ceiling, wall to wall windows.

Thank you so much! You all have really given some very good insight! I do like the idea of some sort of window seat option and am about convinced that we would keep the stone. How could we do both window seat and keep stone. Also, Robin, thank you for your comments. Can you help me better understand what you have in mind with the stone on the ceiling and wall to wall windows.

Would you have concerns purchasing this house with that stone wall being and interior/exterior wall as far as moisture etc? Also do you see how the yard comes right into the wall (as it was originally a large wrap around patio that was enclosed)-- any concerns that we may want to think about?

Condensation and moisture - obviously depends where you live, if you're in a dry area I wouldn't worry too much, but if you're like me, live in an area that is normally wet then you definitely need professional advice such as a specialist damp surveyor. As I asked previously is the stone wall solid or does it have a cavity? If its a modern build and has a cavity and damp course you shouldn't really have a problem. But if its solid, then find out if the mortar on the outside walls is concrete or lime, and does it have a damp course installed. Ideally a damp proof course should be above the floor/garden level outside and below the floor level inside. Old houses were traditionally built without any form of damp proofing, and didn't have the insulated, central heated lifestyle we lead. Windows and doors were drafty and furniture was minimal, so the houses were naturally aired hence not much damp (or they learned to live with it). We still live in these houses, but once we've insulated them and puts lots of furniture on the outside walls, we then wonder why they walls and backs of the furniture is covered in damp and black mould (personal experience speaking!! But I do live in Scotland where we've just had 50% more rainfall over last 3 years!!). If the area round the house is wet, introduce good drainage round the outside walls, if the wall is mortared in cement (which is impervious) dig it out and re mortar with lime (so the stone can breath). If there is no damp proof course either live with it, get new one installed (big expensive job, our original damp course was layers of slate), get advice if the installer suggests a injection type damp proof solution, there are a lot of comments (a lot bad ie doesn't work too well) on the internet about the pros and cons of this method. We have had part of our walls treated by injection by a previous owner, we have dressed sandstone inside and out and small rubble in the middle, it didn't work at all, as the walls are just too thick for the solution to penetrate our 20 inch thick walls.

From your photo the garden naturally slopes down to the walls in question? Do you get water flow in that area, if so would definitely consider the following:-
If you have any soil on the outside of the wall higher than the inside floor level either dig it out and put in some gravel drainage http://myabruzzohome.blogspot.co.uk/p/2010.html something similar to this or you may end up with this http://www.diydoctor.org.uk/forums/damp-at-base-of-wall-dpc-above-internal-floor-level-t23799.html.
Or get someone in to line the outside retaining wall with some form of waterproof material.

If you live in a damp area buying an old house that has thick stone walls, may produce damp problems that can't be helped, we have learned to live with it, because we like the character of our 120 year old gate lodge. Keep a good air gap at the back of furniture and the stone, ensure plenty of ventilation, use a tumble drier, install a dehumidifier. But the best results we have found is by reducing the height of the soil surrounding the outside walls and introducing gravel drainage which is well below the internal floor level. Our biggest problem being large Sandstone block quoins on all the corners and round doors and windows which are beautiful and very ornamental but do soak up water right through to the inner wall.

Window seat, don't think your walls are quite thick enough for a window seat (you have books that fill the top of the wall A4 size? unless they are bigger than they look), you would have to build out into either the lounge or kitchen area which might look a bit odd.

Fireplace most cost effective install a natural wood mantel approx 1 or 2ft above existing fire, use breathable cream/stone paint above mantel. Carefully paint the concrete with a slightly darker, greyish/taupe colour to try and match the existing mortar on the original walls.

Kitchen panelled ceiling I would keep just re-paint & install nicer lighting. Panelled ceilings like these are traditional in Scotland, plus you don't know what you will find underneath the panelling - more work, more cost?

I love the stone wall. It adds character and will work well with modern glossy cabinets. I don't think style has to be all modern or all rustic - it's the mix that makes it interesting and prevents that "cook cutter" look that some places have.

I think the stone has a barrier, then that won't happen. I'm sure it is never wet. Right?

Keep it! You can intregrate it into any design style by using the correct materials that enhance the wall. Contemporary: whites, clean lines, and modern fixtures. Rustic: warm colors, natural materials, etc. Eclectic: whatever floats your boat! Etc.... It will add A point of interest and texture which is always a good thing.

Schuler, wouldn't a wooden floor work better? It would soften the stone wall (which I do like)

Yes a wood floor.

No stone on ceiling, it wood look like a cave! You can add pine.

Hi Rose - I agree that a wood floor would help. My knee jerk response is for a hand sculpted floor but I'm leery about the durability of this type of hardwood. A nicely stained oak could work well.

I've chosen manufactured sculpted wood flooring for my house here . Chose Dark wood as I have oak cabinets . Most of the oak flooring was way "the same color as the cabinets". In Md, I had natural hickory flooring (that was stained and finished after installation) It was also stained dark, as I had light hickory cabinets. I love the variation of color in hickory wood. Don't know what color would look good with that stone wall, but it's possible to take samples to see which shade would compliment .

I like contrast. She has light & ark in her stone. She could go either way.

Shuler Architecture, I think I'm so tired of Oak. Don't like cherry word (sometimes too red) I'm doing my kitchen over in Maine, and chose Maple cabinetry but GREEN (Avacado) color with the worn look, (don't know what it's called). THis way I can use the sculpted flooring, but in dark, so it doesn't snow dirt that much (not that I'd let them stay dirty.lol.

Sounds good.

I love the stone wall! I would definitely keep it. It would work with modern or contemporary style...... Good luck

I would suggest one way to lighten the stone wall is putting a long wooden top or "shelf" over the stone walls top. Then put flowers real or fake on the walls capped wood shelf. Also for fun could try introducing artificial rock growing flowers as if the wall was alive with plantings. Like a rock garden indoors.

I've done a number of remodels. I suggest leaving the stone under the windows (on the right, in the picture), and do a very smooth, white, Santa Barbara Finish on the fireplace and perhaps that

same finish on the stone under the window next to the fireplace.

Give us an update! Please!