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This ramshackle shed which sits at the back of an empty launderette on a south London high street sparked a huge bidding war when it went under the hammer before it sold for £440,000.

Estate agents Savills placed the derelict outbuilding in East Dulwich up for auction on Monday, where it smashed the initial guide price of £325,000.

The unknown buyer faces a complete rebuild to bring the 1,108 squre feet property up to scratch but planning permission was granted to convert it into a two bedroom home with a garden area.

According to a Southwark Council document, the shed was first used as blacksmith's workshop before it fell into disrepair with architects describing it as a dumping ground for old equipment and objects.

The property is arranged over two floors and cannot be accessed directly from the street, with visitors needing to pass through an alleyway next to the launderette.

Chris Coleman-Smith, Savills head auctioneer, said: "This is a fantastic opportunity for an owner occupier or self builder that wants to work on their own property.

"It is definitely unique."

With experts predicting the average UK house price will hit £300,000 in the next three months, the purchase price is further proof of London's soaring housing market.

According to Rightmove, two bedroom detatched homes in East Dulwich can fetch around £750,000.