Fantastic location, although don't go in June if you're sensitive to noise as it's in the heart of Alfama and the festival (which is on for the whole month).
The hosts did provide earplugs which was thoughtful and the air-conditioning helped drown out the late night noise, but no complaints as we knew what we were in for and loved being in the thick of it all.
Did manage to bump our heads quite badly on the low hanging rafters a few times due to the orientation of the bed, and the shower flooded (as other guests commented on) but overall a good spot to stay due to its position and the lovely mornings sitting in the sun on the 3 tiny balconies.