Artists, fashion designers and foodie folk are moving into its quaint railway houses in such numbers that the hidden squares and terraces of Inchicore have become really fashionable places to hang your hat. Judy Davis and Richard Baker, the people behind Lime & Lemongrass Gourmet Foods, have put their own distinctive stamp on their home at North Terrace, Inchicore.

"We moved a year ago from an apartment in Tenterfields off Cork Street. We work in the city centre and we wanted our son Coby, who's two, to live in the city too. We love to be in the hub of things. The house was never advertised in the paper. We just saw it and put in an offer. Every day we'd ring up, to see if it was still on the listings. The price was going higher and higher.

"Eventually, we made a blind bid well over the asking price and got it. We moved in on the 20th December 1999 and had Christmas dinner here. It was the busiest time of the year for us and we were so physically exhausted we slept for a week." The terrace of houses is one of several built by the railway company in 1840. "The house itself is so historic - there's such a feeling of it being lived in before," says Richard. "There's a great sense of the railway workers who were born and died here. We have to be respectful of that. We really feel we're guardians. There are still presences here - I have felt them and so has Coby.

"The lady who lives two doors up was born in her upstairs front room. There were four or five kids brought up in this house. Before we bought the house, we used to drive up and sit outside in the car just looking.

"One of the sons brought us in and showed us around. He was so proud of it. He said there used to be a dormitory house on the road for railway workers. The big houses at the top presumably were for station masters. One section was for train drivers, while signal men lived in another."

Although they had the floors sanded, wallpaper stripped, and walls painted before they moved in, there was still a lot of work to be done. "We had the house Feng Shui-ed. We had to move our bed over 12 inches - we slept much better after that," says Judy. "There were nails sticking out of every old floorboard and the kitchen floor was revolting. My aim was to be able to walk around the house in my bare feet." The original window shutters and sashes are all in working order, but the cold comes in through the single glass panes, say the couple. They stripped all the internal doors and got a new solid timber front door made. "We call it heart-attack wood, it was so expensive," says Richard.

Because money was tight, Judy stripped the frilly bits from the out-dated window blinds and painted on green and mulberry stripes with fabric paint. "It was a very cheap alternative to new blinds," she laughs.

Although all the upstairs rooms were given an initial coat of white emulsion, the couple quickly realised the house needed colour. Coby's bedroom is now bright orange and lavender, another room is pale green and they are still deciding about the spare room.

They painted the downstairs rooms in Farrow & Ball Stone - a soft greeny-grey that manages to look different in every light. A few walls are contrasted in lavender and lampshades and cushions are purple and red.

"Where we lived before was all white and minimalist, but that was apartment living. Before we moved in here, we knew what we wanted. I stripped all the old fireplaces myself, blasted them to death," says Richard.

The diningroom is dominated by an antique pine table made by Greenwood in Clanbrassil Street. Candles burn in red and purple gauze holders from Brown Thomas. Three Chinese candle lanterns brought home from their Australian trip hang in a row from the ceiling.

"Richard took the ugly 1970s diningroom fireplace out with his bare hands and a drill. His hands were ripped to shreds. Now it's very modern and simple. We were undecided whether to go for gas or a real fire, but we decided on gas for practical reasons," says Judy.

The kitchen was the best room in the house. Here, they just gave the walls a coat of lavender paint and added a new cooker and steel shelving for greater efficiency. However, the lean-to bathroom off the kitchen was a different story. "The bathroom was revolting, but we did it up for £30. I painted and Richard tiled. But we're thinking of knocking it down to extend the kitchen," she says.

"We're lucky to have a big front garden for the birds. On a Sunday on this terrace, you're deafened by the birds singing. You could be in the middle of the country.

"The back garden was our biggest indulgence. It was so rough Coby couldn't play in it. We wanted a modern low-maintenance Zen garden with a deck, running water and a play area for Coby. We couldn't really afford it, but felt it was so important for Coby. It's south-facing and beautiful on a good day.

"It's so nice to be in a real suburb - like a hidden oasis. At weekends, we don't leave here. The Memorial Park is a 15minute walk and a real hidden beauty. The Royal Hospital in Kilmainham is a minute away and there are swings in St John of Gods down the road. It's safe and there's nothing to leave for. There are Buddhists living on the road, a couple of Riverdance people, all kinds of arty people. The welcome we received was unbelievable.

"We thought of Lime & Lemongrass when we came back from Australia," says Richard. "We were both in advertising and had so many different ideas. We didn't really want to be wholesalers. We wanted to make it ourselves and supply delicatessens.

"The business just grew without us planning it. We were so naive at the beginning, yet it worked. We didn't surround ourselves with anyone who was negative. The biggest failure would have been not to try at all." Like many fledgling entrepreneurs, home and business are intertwined. Most of their furniture was, at one time or another, used in their Mary's Abbey shop and new recipes are first tried at home in the lavender kitchen. They are definitely not part of the present economic boom, insists Richard.

"We can't stand the Celtic Tiger. We've worked very hard and everything we have is through our business. It has a very personal touch because we're so passionate about it. This is our house for the next ten years or so. I feel sorry for people who are struggling and can't get a house. We're very grateful for what we have."