We have just returned from a short break in Granada when we spent 2 nights at the Casa del Aljarife. The Pension is located in the charming and atmospheric Albaucin area and is tucked away in the corner of a small cobbled square. It's true that the walk from Placa Nueva is hard going with a large suitcase, so best to travel light, but once we arrived we found it was well worth the effort!
The Casa only has 4 individually styled rooms and has a central courtyard where you are welcome to sit and enjoy the sun. We paid 91 Euros per night for our room (no. 4) which was on the top floor and had a splendid view of the Alhambra over the rooftops. The room had lots of charm and character with wooden floors and a beamed ceiling. The room was split-level with the bathroom on a lower level with a few steps up to the bedroom. Overall the room was very clean and comfortable.
Christian Most, the owner, is an exuberant character and provides a list of recommended restaurants and places to visit. He is extremely helpful and when we said we were heading out on our first night to find his favourite restaurant, he escorted us through the maze of lanes in the Albaucin to make sure we found it okay!
Overall the Pension was great value and a wonderful find. It was also surprisingly peaceful given that the nightlife and main restaurant area was only 5 minutes walk (down the hill!).
The only draw back is the accessibility of the Albaucin area by car. We had hired a car as we were travelling on to the coast later, but had problems finding the underground car parks which Mr Most had suggested due to the traffic, roadworks and lack of signs. We finally found a car park which cost 27 Euros for 2 nights and from there took a taxi for 5 Euros to Placa Nueva. If you have to use a car, we suggest you dive into the first car park you see and take a taxi to the Placa Nueva. You will spend ages trying to search for a specific car park! Taxis didn't seem to be hard to come by.

This is one of the most charming hotels - and possibly the best-value hotel - in which I've ever stayed. It's a beautifully restored house in a quiet, safe, atmospheric part of the Albaicin, a few minutes' uphill walk from the central Plaza Nueva. I was in room 3 (of four), a large and well-appointed (polished wood floors, comfortable bed, armchairs, beamed ceiling) room with a spellbinding view of the Alhambra. The spacious bathroom, across a private foyer from the bedroom, had perhaps the largest towels and most abundant hot water pressure in Spain. (Well, outside luxury hotels, anyway, whatever those are.) Detail-oriented beyond even national stereotype, Christian Most, the German owner, was very welcoming and helpful, providing a sheet of detailed restaurant and sightseeing recommendations and offering to arrange Alhambra reservations if we didn't already have them. At 89 euros/night, a delightful find. I didn't try breakfast (5E/10E).

One caveat: You will be lugging your luggage about 1/4 mile uphill from Plaza Nueva or Gran Via. Keep it light - or take advantage of Sr. Most's offer to meet you at Plaza Nueva if you call him when you arrive.

We booked this glorious hotel only the night before. It was incredible.
Senor Most, the host, was charming and helpful. In the Albacin - truly a remarkable old part of Granada. Extremely comfortable beds, clean in the extreme, close to excellent restaurants, and the central downtown area. I'd recommend this place to anyone.

We reserved a room here on August 8, 2002, and called to confirm today, May 11th, a reservation for the 6,7, and 8th of June, 2003. The owner, Christian Most, said that he did not have any written confirmation of the reservation, and had already booked all four rooms in the hotel. I told him I could fax him confirmation today that he sent back in August, and that he should honor the confirmation fax. He said don't bother, the room was already someone else's. Like Seinfeld says, "Anyone can take a reservation, it's holding the reservation that's important." This guy cannot hold them.