Post-War diplomatic relations were finally established on 29 May 1991. It was decided in London that relations with Tirana should be handled from Rome, as British interests were not sufficiently great to justify a resident mission. Sir Stephen Egerton, the British Ambassador in Rome, became additionally accredited as non-resident Ambassador to Albania. Egerton presented his credentials on 20 June, only a month before his departure from Rome. In July, Sir Patrick Fairweather, also Ambassador to Rome, took his place.

In 1992, the United Kingdom’s Presidency of the EC created additional demands and the Foreign Office decided to take up the French offer to share a property in Tirana. The Ambassador in Rome would continue to be accredited, but a resident representative would be sent to Tirana. John Duncan arrived on 4 July 1992 and on 7 July opened what came to be known as the Office of the British Chargé d’Affaires. A year later Stephen Nash arrived in Tirana to take up the position of Chargé.

In the meantime the outstanding issues regarding the gold and International Court of Justice decision had been resolved at separate talks. A memorandum of understanding signed in Rome in May 1992. The following joint statement was issued: "British and Albanian delegations met in Rome on 8 May to discuss outstanding bilateral issues and reached agreement on a Memorandum of Understanding, inter alia in respect of the British Government's agreement to the delivery to Albania of some 1574 kgms of gold.”

They also expressed their satisfaction that this agreement had been reached in an atmosphere of goodwill and understanding. They saw the agreement as the beginning of a new and positive era in their bilateral relations. Both sides expressed their regret at the Corfu Channel Incident of 22 October 1946. They confirmed that all the British Government's financial claims were now settled and all matters relating to the Corfu Channel Incident had been taken note by both sides.

At the beginning of 1995 the Embassy staff moved out of French Embassy to a small property on Vasho Pasha Street. This was supposedly a temporary move with a six-month lease. This small domestic-style accommodation was highly unsatisfactory. A visiting British journalist rather unflatteringly but correctly described it as: "Five rooms above a bank in a muddy back street is where the Ambassador receives his guests. The diplomatic offices are uncomfortably cramped and interviews for visas are held in the reception area."

In February 1996 Andrew Tesoriere became Chargé d’Affaires. All this time British officials had been involved in discussions with the Albanian authorities with a view to regaining HMG’s pre-war property. Like many Albanians, Britain wanted back what had been confiscated by the Hoxha regime. The archives confirmed the Saraci purchase. Villa 30 was the British villa on British land, which extended to part of the site of the Palace of Congresses. But Villa 30 was a large building which had been extended over the years and used as a representational property by the Albanian Government. This was a significant obstacle to its restoration to the United Kingdom. In any case, the building was too large for British representational needs and it was concluded that another property should be found to replace it.

In February 1993 the Honorary Consul in London told the FCO that the Albanian Government was prepared to provide, free of charge, an embassy building in Tirana, in compensation for the building seized by the communists 45 years earlier. This offer was in accordance with the MOU signed the previous year. In June 1992, President Berisha had even offered one of Enver Hoxha’s villas.

The first serious offer from the Albanian Government was Villa 6, although there had been a couple of other suggestions. Towards the end of 1994 the Albanian Government proposed Villa 6 as compensation for Villa 30. Villa 6 at the time was being used by the European Community Monitoring Mission that remained until the summer of 1995. However, at the end of 1995 further problems arose. Another claimant successfully asserted a joint title to Villa 6 in the Lower Court. The Court of Cassation reviewed the case on 15  February 1996 ruling in favour of the Albanian Government.

The Court decision and the settlement of the Embassy’s property claim meant that relations could finally be upgraded.   Andrew Tesoriere was appointed the first British Resident Ambassador in Albania on 21 February 1996. Villa 6 became the property of the British Government but, instead of becoming the Embassy, was leased to the OSCE initially for one year until May 1998. The building had always been regarded as being too large for the needs of the Embassy, though there were ideas to convert it to a mix of an office and residential use. While the negotiations and the legal case were in progress, other options were sought. 

In January the Chargé told London that, as the option of Villa 6 might never materialise, "We have found a ‘comparative gem of a villa’ a former PLO office on "Diplomatic Row (Rruga Skenderbeg)". This was called Villa Pali after its owner Alberto Pali. Villa Pali, 12 Rruga Skenderbej, became the Embassy building some ten months after the signing of the agreement.

The political crisis in Albania in 1997 delayed any decision on the Embassy’s long term future. In March the Embassy arranged the evacuation of over 150 British, Commonwealth, Irish and other nationals through Durres. The Embassy lost its means of transport when armed bands stole its vehicles during the evacuation.  Two British and two local staff were also inadvertently evacuated onto an Italian warship when they were forced on board in the rush and could not return to a quayside full of armed and angry people. After the evacuation the Ambassador returned to Tirana and reported to London in battle-like language, that he and accompanying officers were bunkered down on the embassy floors. "We are adequately victualled for 2 weeks. The international telephone lines remain intact. We have backup satellite communications. "

As he left in July 1998, the Ambassador expressed the hope that by the end of the year the Embassy, which he described as something of a Cinderella, would either be housed in Villa 6 or that the villa would be sold and another bought instead. But the diplomatic fairy godmother was slow in coming.

In 2000, a decision was made not to move into Villa 6 as it was too large and in poor condition. Refurbishment would have been impractical and financially unjustifiable. Instead, Villa Pali, which had already undergone a small extension with the enclosing of its balconies, would be further extended to become a modern office building. The lease of Villa 6 to the OSCE (with the Council of Europe as sub-tenants) was extended, although there was no intention of retaining the property in the long term.

In February 2000 agreement was given for the large extension of Villa Pali. It is this extension which forms the Embassy building as it is today. Work on site was started in July 2001 and completed in autumn 2002. The extension forms an L-shape surrounding the old house; nine new offices have completed by the British contractor Orostream, and includes all the infrastructure for information technology as well as, for the first time, central heating. Renovation works started again from 2005-2006, to enable the Embassy to continue to provide high quality services. The newly refurbished Visa Section was opened by the Head of the Diplomatic Service, Sir Michael Jay, in 2006. the present building represents considerable investments in UK’s continued diplomatic presence in Albania.

The game of villa numbers was not yet over. Villa 6, given in compensation for Villa 30, was to be exchanged for Villa 55, the property next door to Villa Pali. In May 2002 a Memorandum of Understanding was signed by British Foreign Secretary Jack Straw and Albanian Foreign Minister Arta Dade, providing in principle for the exchange of the two properties. Villa 55, for which (rarely in Albania) the State had undisputed title, had housed the Embassy of the Democratic People’s Republic of Korea (North Korea) during the communist period and had subsequently been let to the representatives of the Democratic League of Kosovo (LDK) to house the so-called "Office of the Republic of Kosovo". The new location was used for a purpose-built Ambassador’s Residence and other facilities and for the first time in the modern period saw all the Embassy buildings on one site. The new purpose-built Ambassador’s Residence was finished in 2005. The new Residence is itself a symbol of the importance the UK places on its relations with Albania.