Can't see the room layout, but if you keep it, it could be a nook for a sofa or chairs by the fire on a cold night, with a rug in front. Definitely have a mirror on the mantle. Think about walls and rooflines before you do anything. Or if you've got lots of cash to splash, take it out as it may serve no purpose with a heatpump in place. Replace roof tiles, internal brickwork.........you see what I mean, just saying......

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.

Hi 2Find! Thanks for your cohesive little selection of images. I will replace the lights for sure (though I have a pet peeve re those lights where the bulb is visible as am quite light-sensitive, preferring diffuse light). There is no furniture in the room, we aren't living there till the reno-extension is done as it won't have a kitchen. I would like to keep a muted pastel colour scheme throughout the entire house. Kind of a nod to the 30's. Sorry, but I can't do brown tile, it's a visceral thing! Cheers for the lovely photos siriuskey (lovely star system). Very nice and I probably will go for a pretty simple 30's weatherboard cape cod type theme. The house is a raw looking 'ranch' style from the US, lucky we have so much lovely British weatherboard culture to draw from. I adore that hallway!

What else is going to be done in the room? The heater revamp needs to be done in context. I'd beef up the mantle. And replace the fire place with a gas log look. Even a fake fire place adds value and atmosphere.