A THREE-bedroom house in South Yorkshire has gone on sale for just £1 – but it won't suit everyone.

The bargain home costs less than a cup of coffee, but you'll have to spend a lot more to make it habitable as it was damaged by a fire last year.

The semi-detached property is spread over two floors, with the bedrooms and a bathroom on the first floor and a hallway, kitchen and living room on the ground floor.

There is also off road parking and both front and rear gardens.

Located in Rotherham, there are shops and two primary schools nearby, while the freehold plot is 202 square meters big.

The property is being sold at auction at a guide price of just £1, compared to a £78,000 price tag for a similar property sold down the road a couple of years ago.

The ad on property website Rightmove says the fire-damaged house has "excellent potential for extension as well as restoration".

Alternatively, housebuilders may be keen to snap it up only to knock it down and then build a new one again.

But although the home may sound like a real bargain, the caveats are quite big.

First of all, we don't know what the inside looks like and viewing is restricted to roadside inspection only as the house has been considered to be "hazardous".

Also be aware that just because the property has a starting bid of £1, it can quickly rocket to the point that it's no longer a bargain.

If you end up needing a mortgage on the property, you will struggle to get one within the one-month period auctioneers give buyers to pay for properties upfront.

That means you'd need to find the cash upfront or you could put it on a credit card or loan.

If that's the case, make sure you find one with a low interest rate or 0 per cent interest-free period and pay it off within the term to avoid being charged extra.

Auction houses usually also charge administration fees so make sure you're aware of these beforehand.

Plus, you'll have to pay stamp duty if the house ends up selling for more than £125,000 or £40,000 if it is your second home.

Paula Higgins, chief executive of consumer group HomeOwners Alliance, told The Sun: "The property is offered as an auction, so although the reserve is £1, it doesn't mean that the property will go for that.

"If you are the successful bidder you will have to pay 10 per cent on the day, the rest one month later.

"So it won't be possible to apply for a mortgage in that time."

If you already have a mortgage you could increase the size of it, but be aware of any exit fees or whether it means you'll lose any special introductory terms.

Ms Higgins added: "Speak to a mortgage broker and take a look at further advice on how to finance home improvements.

"It may be desirable to demolish and start again – so you create your dream property.

"If you demolish and build again, it will be zero-rated VAT, compared to paying 20 per cent VAT on a complete refurbishment.

"There are a number of ways to finance a major refurbishment or build, but you will need to organise this after successfully completing on the property."

Apart from increasing the size of your mortgage, these include either coughing up the cash yourself or taking out a home improvement loan.

Just make sure you shop around beforehand so you get the best deals for you.

Also, if you're planning to extend the property or demolish it entirely to build something new, keep in mind you'll need planning permission from your council before you start.

Keen to snap up the house? The property is being sold off by auction house Mark Jenkinson & Son on October 22 at Sheffield United Football Club.

Earlier this year, a four-bed Doncaster house went on sale for £15,000, but it looked like a "war zone" inside.

Last month, a holiday home in West Sussex with a swimming pool and no council tax went on sale for £20,000.

While a three-bed semi-detached house has gone on sale for £270,000 – and it’s got its own pool and hot tub.

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