Our selection consists of one and two-bedroom houses that are all terraced properties - including a terrace bungalow.

All of the properties are in the North and Scotland - with all but one of the five houses need updating. Only one is ready to move into.

Their prices are a far cry from the average £244,513 price of a British home, as outlined by the Office for National Statistics.

The figure reflects prices in September, the latest month for which Land Registry figures are available.

The ONS said typical values have reached the highest level on record after surging £4,000 in a month.

The extraordinary rise of £4,060 more than in August has occurred despite the coronavirus pandemic, and was the equivalent of a one-month rise of 1.7 per cent.

Tom Parker, of Zoopla, said: 'Although they're increasingly rare, houses for sale under £40,000 do still exist in Britain.

'If you're on a limited budget and on the hunt for an investment that you can put your own stamp on, one of these properties could be the perfect fit.'

But he added a word of caution, saying: 'It's always remembering that properties in this price range will require an element of compromise.

'Many of them require significant renovation so undertaking a project like this is a big commitment and not one for the faint-hearted.'

Here is our pick of homes for less than £40,000...

1. Two-bed house in Durham, £25,000

This two-bed house in Durham's Horden is one of the cheapest of our selection of homes that cost less than £40,000.

It is being sold by Express Estate Agency with a guide price of £25,000 - a tenth of what the average price of a home in Britain today costs.

The agent explains in its marketing literature that the property boasts a ' private enclosed rear yard - ample space for outdoor furniture'.

2. One-bed house, Dumfries and Galloway, £25,000

This corner terrace house is in the village of Eastriggs in Scotland's Dumfries and Galloway.

It is for sale with a guide price of £25,000 via estate agents Pollock & Mclean. It includes double glazing, gas fired central heating, a garden and off-street parking.

3. Two-bed house, Sunderland, £30,000

This terrace bungalow in Sunderland, Tyne And Wear, has a price tag of £30,000

This two-bedroom house in Sunderland, Tyne And Wear, can be yours for £30,000.

It is being sold by estate agents Your Move, which explains in the property's marketing literature: 'This is a great investment opportunity, which will require full refurbishment. Ideal for anyone looking to put their own stamp on a property.'

4. Two-bed house, County Durham, £32,500

This property is being sold via estate agents NS Bennett and has a price tag of £32,500

The property in Chester-Le-Street, County Durham, is ready to move into

There is a fully functioning kitchen with a large window that provides plenty of light

This pretty terrace in Chester-Le-Street in County Durham is ready to move into.

It has two bedrooms, carpets and a fully functioning kitchen with a large window that provides plenty of light.

It is being sold via estate agents NS Bennett and has a price tag of £32,500.

5. Two-bed house, Bishop Auckland, £34,500

This two-bedroom property in Eldon Lane, Bishop Auckland, requires some updating.

It has the potential to be a comfortable family home and is for sale for £34,500 via estate agents Blackstone Estates.