Dilapidated pre-fab 'shed' sells for nearly £1 million at auction

The 1950s property in Peckham comes with 0.6 acres of land, is in need of renovation and has no fitted bathroom

The typical UK home now costs 10 times more than the annual income of full-time workers (Google Maps)

A pre-fabricated bungalow in south-east London has sold at auction for just under £1 million.

The 1950s property in Peckham comes with 0.6 acres of land, is in need of renovation and has no fitted bathroom, but still sold for £950,000.

The so called “shed” was advertised by Savills as being close to the “increasingly popular ‘village’ shopping amenities and cafes along Bellenden Road” and Peckham Rye station.

The house, which has been sold without planning permission for demolition, consists of an entrance hall, kitchen, bathroom and separate toilet.

A guide price of £590,000 was initially set, but increased rapidly during the bidding.

Southwark Councillor, Richard Livingstone, said the money gained from the sale of the property, which is thought to have been empty since 2002, will be reinvested into the council's re-housing programme, which includes building 11,000 new properties in the borough by the 2040s.

Mr Livingstone told the Evening Standard: "We are extremely pleased that once again we have managed to raise a significant amount of money from the sale of a property, that was far past its expected lifespan, to but back into creating better homes for our residents."

Chris Coleman-Smith, director and auctioneer at Savills, said the property was in a "hotspot", the BBC reported.

"Peckham has connotations of Only Fools and Horses and that can be one side, but the other side is traditional, old Victorian areas," he added.

The sale of the pricey pre-fab comes amid news that the typical UK home now costs 10 times more than the annual income of full-time workers, while first time buyer homes cost eight times more, according to an analysis of official figures.

The average property in the UK is currently valued at £284,000 by the Office for National Statistics, while first-time buyers typically pay £215,000 to climb on to the property ladder.

By contrast, the median gross annual earnings for full-time employees is £27,200.

A Department for Communities and Local Government spokesman said: "Government initiatives have helped more than 230,000 people to buy since 2010, and we are delivering 200,000 new starter homes, which will be available at a 20% discount to first-time buyers."

Shelter chief executive,Campbell Robb, claimed the starter homes initiative would only benefit the "well-off".

"When house prices are so completely out of step with the average person's wages, it highlights in black and white that home ownership is nothing but a distant dream for millions across the country," he said.

"Government schemes like Starter Homes will only help the well-off, whilst the rest of Generation Rent remain trapped in expensive and unstable private renting."

Additional reporting by Press Association