A derelict shack has sold at auction for an eye watering £440,000!

The two-storey wreck of an outbuilding in East Dulwich has no rear entry. And access is only through a run-down corridor.

But that didn’t stop a serious bidding war breaking out when it went under the hammer at auction on Monday with London auction house, Savills.

That’s because the 1,108 sq ft property has planning permission to be converted (rather than torn down) into a two-bedroom home. According to plans approved by Southwark Council earlier this year, the new home will have two bedrooms, two bathrooms and a 'garden area', and will be connected to the shop via an extension.

It had a guide price of £320,000 and ended up selling for £440,000 - twice the price of the average  cost of a home in England. However the outbuilding could prove to be a shrewd purchase, with Land Registry figures showing that the average price for a property in East Dulwich is £607,000.

London's property market has been soaring over the past couple of years so it's not really surprising that even a derelict property such as this is selling for hundreds of thousands of pounds.