A £550,000 price tag has been slapped on a derelict guest house - sparking speculation the site could be transformed into flats.

The City of Canterbury B&B in St Thomas Hill is set to go under the hammer on Thursday, nine months after the business was dissolved.

Advertising material produced by marketeer Allsop says the vacant building has the "potential for reconfiguration into flats or a single home".

But locals fear the firm's vision for the site will do nothing to benefit the area.

Lib Dem councillor Alex Ricketts told KentOnline: "With more and more housing being built, taking something that was a commercial property and turning it into a house is not something that, in principal, I would be in favour of.

“There’s the danger that we’ll end up with lots and lots of housing and not enough pubs and shops.”

Pictures released by Allsop show the 10-bedroom building - which has not been the subject of a planning application since - has windows boarded up on its lower-ground floor.

Images inside show the rooms on its lowest level has peeling wallpaper and dirty and heavily marked tiles.

Although less than half a mile from the city centre, there are precious few amenities within walking distance.

The closest convenience store is a co-op on the University of Kent campus, but locals complain the irregular opening hours make this an unreliable option for weekly shopping.

Gerhard Esser and his wife Christine Sawitzky-Esser have lived close to the old B&B for 27 years.

"The business they had there before was lovely - when our parents would come over from Germany they would stay there,” they said.

“If they would make it into another B&B I think the people who live around here would really like that.

“But it would also be lovely to have a grocery store or a neighbourhood café there, because there aren’t really any shops around here.

“The neighbourhood won’t benefit at all from just having more flats."

Meanwhile, resident Chris Hammond, who chairs East Kent for Europe, believes the building could be used as a European resource centre.

He thinks it could be used to host talks and have a library, research areas and meeting rooms.

Prior to being a B&B, records show the building used to be a school boarding house.