Balham renovated by painter in palace (8)
I believe the answer is:
alhambra
'palace' is the definition.
(palace in Spain)
'balham renovated by painter' is the wordplay.
'renovated' is an anagram indicator.
'by' says to put letters next to each other.
'painter' becomes 'RA' (member of the Royal Academy of Arts).
'balham' with letters rearranged gives 'alhamb'.
'alhamb'+'ra'='ALHAMBRA'
'in' acts as a link.
(Other definitions for alhambra that I've seen before include "Famous Moorish palace near Granada in Spain" , "Great 14th century Moorish palace near Granada in Spain" .)