An old railway house at Otira razed by fire early today was not insured.

The house was described as derelict, however Otira village owner Bill Hennah confirmed this morning that someone had been living there even though it did not have electricity connected.

Emergency services were notified shortly before 1.30am.

Kumara Volunteer Fire Brigade deputy fire chief Les Neame said in the time it took them to drive the 70km to Otira, the building was almost on the ground.

"It was pretty well involved when we got there," Neame said.

Along the way the brigade was held up by a train on the crossing at Otira.

Neame said it was "a good 10 minutes" before they were able to get through and by that time there was little they could do but stop the fire spreading.

Firefighters remained on the scene for over three hours, supported by the Arthur's Pass rural fire party, and got back to Kumara about 5.30am.

Neame said it appeared whoever was "camping there" had lit a fire in the house.

An Otira resident described the house as derelict when spoken to by the Greymouth Star this morning.

"There was definitely someone living in it but I don't know if he's okay or not. I haven't seen him this morning," she said.

Hennah, who previously also owned the Otira Hotel, is currently in the North Island and was unaware of the fire until contacted this morning.

He said there were two semi-derelict houses within the former railway settlement and they were not insured.

"If it's the one we're thinking of, he couldn't afford the power."

Hennah said he would be following up on whether a train had blocked fire brigade access, because that was "not on".

"Every train that comes there has to be one carriage clear of the crossing. Nothing is allowed to block the thing."

Meanwhile, ownership of the village was due to be transferred to the current hotel owner Lester Rowntree in May next year.

- Greymouth Star