Chimneys have not been in widespread use since the 1940s. When gas-powered internal heating arrived most people switched and they have been switching since. To this day there are very few functioning fireplaces and even fewer that have not yet been sealed up. Most people prefer a gas or electric fireplace over a real one that could risk burning their house down.
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Squirrels mate roughly twice a year. Their first mating is at the very end of the winter when spring is on its way. Once they are pregnant they will go to any length to find a safe place to raise their young. They prefer human spaces for this and often infest soffits, drip edges and, of course, chimneys. Anywhere they will be safe, though some of them are not safe at all.
While sealing up the chimney on the inside is fine, you also must seal the top of the chimney with a chimney cap. The reason for this is that many wild animals, and especially squirrels are very likely to decide that your chimney is the perfect place to raise her babies. Getting down into the chimney is easy enough for a squirrel but getting back out can be difficult and with no ground-level access the squirrel will have to climb its way back out of the chimney to find food. This can sometimes result in the squirrel, not being able to escape the chimney. If the babies are immobile and the squirrel just started making a nest in the chimney if it gets trapped it could easily die and you would be left with the smell and the chance of illness from the dead animals behind your gas fireplace.
To deal with this you would have to hire a bricklayer who would have to break down the wall and remove the bricks, many of them will break and shatter ending in the necessity of having to buy new bricks which will not be made of clay and will look different from the other bricks. This will mean a permanent mark on your home that cannot be corrected without handmade clay bricks. This is why old houses with chimneys are so easily entered by wildlife. The cracking foundation, holes between bricks, a drip edge that is wide open and difficult to seal. That is why new homes are not built with chimneys. They are simply too much of a hassle.
So if you have a chimney and it has not yet been invaded by a wild animal, make sure to get it caped, or you could end up with a very smelly and very costly affair and to hire a squirrel technician simply go through us! Squirrel Control.