Comment 2 for bug 824167

Apparently that doesn't work. I modified the host's dhclient.conf to add:

   prepend domain-name-servers 192.168.122.1;

Such that /etc/resolv.conf now contains:

  nameserver 192.168.122.1
  nameserver 10.0.1.1

dnsmasq seems to be running:

   1366 dnsmasq --strict-order --bind-interfaces --pid-file=/var/run/libvirt/network/default.pid --conf-file= --except-interface lo --listen-address 192.168.122.1 --dhcp-range 192.168.122.2,192.168.122.254 --dhcp-lease-max=253 --dhcp-no-override

Interestingly, seems like there's no route to the 192.168.122.0 network on the host, so maybe something is broken on my side:

route -n
Kernel IP routing table
Destination Gateway Genmask Flags Metric Ref Use Iface
10.0.1.0 0.0.0.0 255.255.255.0 U 0 0 0 eth1
169.254.0.0 0.0.0.0 255.255.0.0 U 0 0 0 virbr0
0.0.0.0 10.0.1.1 0.0.0.0 UG 0 0 0 eth1
0.0.0.0 0.0.0.0 0.0.0.0 U 1004 0 0 virbr0