Creating a Fairy House is a really nice craft to do with kids and it's the kind of project you can scale up according to age, so it's ripe and ready to become an annual family tradition. Older children can be their own architects, drawing and designing the house, scavenging for materials in the garden and then building it. Younger moomins might just want to help you find the materials and stick everything together (and probably to themselves while they're at it).
Take an old yoghurt pot or ice cream tub for a base, invert it, cut out a little door and then use strong glue to attach twigs and bark for the walls, stick overlapping leaves together to form a cone circle and pop on top for the roof. Once you've found a nice spot in the garden for it, surround the house with moss for a garden and decorate as you like. You can even add your own Cottingley Fairies if you're nifty with pins, paper and mild dissembling...