If you are thinking of reinstating a real fire your hearth may have to be changed so wait until you decide as you may want to change it then. Otherwise I would paint the surround in a good quality paint to suit your taste. I used a flat eggshell by Farrow and Ball, creamy white called New White, on my mahogany fireplace about 15years ago and while it took a few coats to do it properly it has lasted and us still perfect. People ask me where I got my lovely mantle, and all the woodwork in the room is now painted the same! So what was an ugly mantle is now a feature

So the shelf would have slid onto those two black rectangular pieces and "locked" in - so would just slide off but wouldn't lift up

Hi Deepa, it would help us if you could give us a floor plan so we can see the space. It is really difficult to judge a fraction of the space just off one photo. Generally, fireplaces are quite charming and I think if designed/ decorated correctly, could be a nice added feature to the space it is in. it feels as though there is too much going on in that space and that there isn't much structure to it. Do you think you could break down the stoned box to the right of the fireplace? That would give you a bit more to work with.

Are you planning to replace the green carpet? I would start with that. A modern gel fireplace would look great there. You could have wall shelves fixed to slatted panelling in the alcoves. The interior is very traditional. Are you planning on changing your furniture as I don't think a modern sleek unit will sit well with your traditional furniture. Are you planning to remove the built in that is already there?