Students living near an Allenby Terrace property in central Wellington are calling for the shell of the large house to be demolished following a third fire at the site over the past three years.
James Tate, 22, and Krystal Stephen, 23, live in a student flat overlooking the property between Willis Street and the Terrace.
Mr Tate, a commerce student who hails from New Plymouth, called fire fighters to the scene about 5:30pm last night.
He had heard reports of squatters frequenting the derelict 100-year-old house, but he and Miss Stephens had not personally seen squatters there.
Both students want to see the property demolished for safety reasons.
"It's prime real estate. A lot of people were freaking out and having a look when the fire broke out yesterday. There were quite a few firemen who showed up, but they seemed fairly relaxed about it.
"They did not look unfamiliar with the place. The place should be demolished and the site developed," Mr Tate said.
Miss Stephen agreed.
"They really should knock it down now. It is an eyesore. The property is a good investment for someone. The owners appear to be biding their time to knock it down. They might as well just do it. People in the adjourning house are in real danger," Miss Stephen said.
The Fire Service ran a large hose down from the top of Allenby Terrace.
Ms Stephen said the fact the property was difficult to get at would make it more attractive to would-be squatters.
The fire was quickly brought under control.
"They brought a chain-saw in after the fire," Miss Stephen said.
A Fire Service spokesman said today the fire was suspicious and investigations in to the blaze were continuing.
The eight-bedroom home has been derelict since an arson in 2009.
Zachariah Wilton, 19, was jailed for two years and three months in February 2010 for setting fire to the building knowing danger to life was a likely issue.
The judge in the case said at the time the house was not habitable.
The house caught fire again in spectacular fashion in September 2011.
Flames and smoke were visible from much of Wellington before the fire was brought under control.
In February the house was listed for sale for $495,000.
A real estate agent described the site as "blank canvas" for builders for those looking for land in a good location.
- The Dominion Post
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