A first edition of The Hobbit given by JRR Tolkien to one of his former students in 1937 has more than doubled the world record for a copy of the author’s first novel, selling at auction for £137,000.

The Hobbit first edition from 1937. Photograph: Sotheby's

The previous record, set in 2008, for a copy of The Hobbit was £50,000, and Sotheby’s in London had expected to sell this copy for between £50,000 and £70,000. But the copy given by Tolkien to Katherine Kilbride, taught by the author at Leeds University in the 1920s, exceeded all expectations.

Tolkien inscribed only a “handful” of presentation copies of The Hobbit on its publication, said Sotheby’s, with CS Lewis also a recipient. Kilbride’s includes an inscription by the author in Old English, identified by John D Rateliff, author of The History of The Hobbit, as an extract from Tolkien’s The Lost Road. This time-travel story, in which the world of Númenor and Middle-earth were linked with the legends of many other times and peoples, was abandoned by the author incomplete.

Tom Shippey’s study of Tolkien’s fiction, The Road to Middle-Earth, cites a similar poem and translates it as: “There is many a thing in the West-regions unknown to me, marvels and strange beings, a land fair and lovely, the homeland of the Elves, and the bliss of the Gods ... ”

Tolkien’s message in Old English to former student Katherine ‘Kitty’ Kilbride. The book sold for a record £137,000 at Sotheby’s in London Photograph: Sotheby's

But the inscription diverges in the third line. According to Professor Susan Irvine at UCL, Tolkien followed “eardgard elfa” or “the homeland of the elves” with “eorclanstanas / on dunscrafum digle scninath”, which she translated as “precious stones / shining secretly in mountain caves”.

Kilbride, who died in 1966, was “an invalid all her life”, according to her nephew, “and was much cheered by [Tolkien’s] chatty letters and cards ... books were given to her as they were published”.

In a letter thanking Tolkien, now kept in Oxford’s Bodleian library, Kilbride tells the author: “What fun you must have had drawing out the maps.”