The west London house saw off 21 other shortlisted schemes from across the capital - including David Adjaye's Whitechapel Idea Store - which is also in the running for the Stirling prize - to be named the London Building of the Year.
The surprise win for Caruso St John confirms bookmaker William Hill's confidence in the scheme to walk off with the most prestigious prize in architecture on 14 October.
The bookie's price of 3/1 puts the austere brick and concrete scheme narrowly behind Zaha Hadid's Phaeno Science Centre (6/4) in the race to scoop the big prize.
Adjaye's Idea Store has now slipped into sixth and last place, having seen its odds drop to 7/1.
Presenting the regional award last night, RIBA London chairman Andrew Hanson described the Caruso St John house as a 'brave, intelligent, original study in the use of ordinary materials'.
He added: 'The warmth and subtlety of the interiors amazed and impressed the judges; the varying planes and use of light is masterful.'
And there was a double triumph for the practice. At the same ceremony, Caruso St John also won the Award for Building in a Historic Context with its new classrooms for Hallfield School.
See all the Stirling Prize odds at www.willhill.com