Sleaford is how England used to be - or maybe just the way some like to imagine it. The drive into the Lincolnshire town passes mock-Tudor houses and neat bungalows set back from tidy verges. There's a traffic jam at the rail crossing - there usually is - where drivers sit patiently with scarcely a complaining toot of the horn as a train chugs past.

The high street, Southgate, is a rambling collection of independent shops and small cafés - not a Starbucks in sight. The town boasts the 12th-century church of St Denys, a canal that used to connect to the national waterway network and the Navigation Yard, once headquarters for the town canal system, now a museum celebrating local history. An old seed warehouse has been converted into The Hub, the National Centre for Craft and Design.

With 61 per cent of the population married - the second highest rate in England and Wales - it seems only right that Sleaford is the corporate base of Interflora, the company that says it with flowers. Crime figures are low, with 28 offences per 1,000 residents compared with 61 nationally, according to Home Office figures for 2006 and 2007. Employment - historically dependent on agriculture and now on education, health, local government and nearby Royal Air Force stations such as Cranwell and Coningsby - stands at 79 per cent, while wages are £414 per week on average compared with £429.70 nationally. And it is just over an hour to London by train from nearby Grantham station.

Perhaps not surprisingly, Sleaford is one of the fastest-growing communities in the country, its population doubling to 17,000 in the past 15 years. It is hard to imagine what can be done to improve this semi-detached Eden. But the town is also the site of an extraordinary building, The Maltings, which - like the Baltic art centre in Gateshead and the Mima art gallery in Middlesbrough, both in north-east England - is being transformed into a symbol of change and revitalisation.

Completed in 1907 for Bass Breweries to process the locally grown barley, the structure looms out of the flat countryside like a great red cliff of brick. There are nine blocks, each of 5,420 sq metres, spread across eight hectares, with a central core that contained the engine rooms, boiler room kilns, granaries, even an artesian well. It is, say proud locals, 10 times the size of London's Tate Modern gallery, itself once a power station.

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The Grade ll*-listed Maltings closed in 1958 and, after a spell when it was used for chicken rearing, it was threatened with demolition. But developer Gladedale Group saw the potential and enlisted the aid of the Prince's Regeneration Trust to advise on the rebuilding.

"The buildings are robust and beautifully crafted," says Michael Cocks, the development manager. "The malthouse blocks to the east were badly hit by a fire in 1999 and parts of them will be carefully removed to create public courtyards that will bring in light and sun for people sitting in a bar or restaurant."

Gladedale's proposals, which are estimated to cost £55m, are to convert the blocks to apartments and a "health village", including a doctor's surgery and chemist. One block will be used as an office for a single company and as a repository for many of the historic industrial features. Six blocks will be converted into about 200 one- to three-bedroom flats while two blocks will be used for car parking.

Work has been delayed by the very 21st century problem of securing the fate of eight protected species of bat and 27 kinds of birds. But final permission to go ahead is expected this autumn, with the five-year project expected to start next year. "The Maltings and new estates to the north and east will help us increase the population by another 6,000," says Alan Gray, economic development manager of the local North Kesteven District Council. "We don't have enough people who both live and work here."

The challenge for Sleaford is not just rebuilding The Maltings but also integrating it with the town. First a walkway will connect it to Southgate via a new Tesco supermarket, which is to be built on the site of another disused seed warehouse; then a road will be laid from the centre through a park and over the railway line to former breweries. The latter project is the subject of much protest because it threatens a row of fine old oaks but "it will get the go-ahead," Gray says. "It has to."

With those ambitious projects underway the rest of the improvements to the town will be on a small scale - which is as it should be. Emphasis will be on culture - 12 years ago the town had no museums; now it has three - and the arts, which has seen 68 pieces of public art commissioned by the council.

Southgate has benefited from the removal of unnecessary road signs, de-cluttering that sits well with a centre that boasts a mix of flats, terraces, family homes and retirement complexes that would be the envy of progressive developers. The conversion of another four-storey seed warehouse by the station has provided 32 one- and two-bedroom flats aimed at young people and the disabled.

"The town does not have the space for big developments so we have used regional funding to develop the alleyways, outbuildings and small outlets to ... encourage the growth of small shops," Gray says. "We deliberately went against having pedestrianised streets because we want to keep the centre alive and lively."

Shop owner Karen Berry, 44, who owns the Lavender Yard furniture shop on Southgate and lives with her flight instructor husband and three daughters in Quarrington, a village now joined to Sleaford, cannot wait for the changes. "There is room for improvement," she says. "The town needs the mix to help increase confidence and to attract people here. As long as The Maltings doesn't take business away it will be fantastic."

Although estate agent Mark Rice reports that business has decreased by "50 to 60 per cent" since last year, with property prices "10 to 12 per cent lower", he agrees that The Maltings development bodes well for the long term. His agency is selling a flat in a town-centre block for £82,500, and a range of semi-detached and three-bedroom homes for about £150,000, while prices for detached homes are as high as £350,000. His most expensive property is a six-bedroom former farmhouse for £449,950.

District councillor Marion Brighton also sees a bright future for Sleaford even as it holds on to its past. "We need shops to attract the young but, above all, we like Sleaford as it is," she says. "It may be a growing market town but we don't want to be a new town or change too much because people are looking for the lifestyle we offer."

Mark Rice, tel: +44 (0)1529-414 488, www.markrice.co.ukame