By viable I mean workable, functional. A chimney sweep or a builder adept in chimneys will give you a report. Certainly enquire about a future gas fitting rather than logs if possible. I say this as a fireplace anywhere is delightful and, if downstairs, it could heat upstairs through the house, to a certain point too. If you look at the quality of the brick laying, you will see that its not meant to be a feature which is why it was rendered, but that is choice only. Certainly seal the bricks. Good luck and stay with it if you can. Everybody loves the romance of a fire.

The stained glass windows seem to be at odds with the exposed brick, but probably match the original part of the house. If the stained glass windows are giving privacy from an overlooking neighbour I would keep them, and work to make the brickwork more like the original part of the house, so it seems less incongruous. This could be done using a traditional wet plaster or solid plaster technique, which you would need to complete befor your gas insert fireplace is positioned. I would finish it of with a traditional timber fireplace surround and mantle piece, which would be the focal point of a more contemporary room, but link in with the original architecture. Best of luck, Dr Retro of Dr Retro House Calls

a plan of the house would help invite suggestions for the space

this looks like it should be the back of the house and i think it needs a roofed balcony that will also create a sheltered space downstairs, change doors to ones more suitable to the vintage of the home and the bins could be around the side until they need to be collected