Residents in the town were warned to close their windows after the blaze took hold yesterday (Monday) morning around 11.52am.
Crews from Skegness and Wainfleet attended the scene in Wainfleet Road.
Lincolnshire Fire and Rescue tweeted: "The ground floor of property is well alight.
"All persons are accounted for.
"This is an ongoing incident and updates will be made when we have them.
"If local to the area, please keep doors and windows closed."
In a later update of the situation, Lincolnshire Police requested traffic management as traffic began to build in the area.
·Following an investigation by Lincolnshire Fire and Rescue, the cause of this fire was an electrical fault within the domestic wiring.
There was fire damage to the ground floor bedroom and the bedroom above and smoke damage to hallway and first floor rooms.
The blaze was extinguished using four breathing apparatus, two hose reels and one covering jet.