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Yeah. Surface area on that is small enough as it is, and you are still left with the cold bridge from the external through in to the dividing wall on the left. External FTW I think.
Howard-
Non-party dividing walls are typically timber in older buildings which helps with the cold bridging between rooms a little. I did model some return insulation into the room too, but decided against it.
Assuming your neighbours heat their homes to the same temperature, the main benefit of improving an old terraced property is the proportion of volume to exterior surface area... we're around 350 cubic meters to 60 square meters of exterior wall.
By contrast, a 9m x 9m detached bungalow (200 cubic meters) with 80 square meters of exterior wall is going to lead to reduced gains for increased cost.
JonoMarshall
Unfortunately not as we're in a conservation area, external would've been higher performing and easier.