Basement excavations boom as London house prices soar
01-11-2014
By Kate Allen and Philip Nye
A digdown basement in Brompton Square, London©James Royall
The residents of Peterborough Road in Fulham, west London, may be surprised to discover they are at the epicentre of the capital’s property boom.
The road has become a hotspot for basement excavations – the most visible symptom of the wild growth in house prices in some parts of the capital over the past couple of years. Seven planning applications involving basements there have been filed in the past year alone.
The trend for “digdowns” is spreading across west London as soaring house prices prompt homeowners and developers to increase their home’s value by extending it downwards. But many local residents complain they are a disruptive nuisance and councils are trying to tighten planning rules to crack down on them.
Retired Fulham residents Frederick and Susanne Garner said the noise from a basement excavation next door was “horrendous”.
“What I can’t understand is why everybody has got to put up with it,” Mr Garner said.
The number of applications has more than doubled in Kensington and Chelsea year on year as homeowners and developers rush to get planning permission before the rules are tightened this year.
Now property owners in surrounding areas are getting in on the act. Applications involving basements have risen 42 per cent in Hammersmith and Fulham and 34 per cent in Wandsworth in the past two years, councils’ planning data show.
Average house prices in both areas rose more than a third in that time.
Ed Mead, director of Douglas & Gordon estate agents, said the trend was driven by rising house prices. “A basement costs circa £500 per square foot to build and then you have to fit it out, so once an area gets beyond an average value of circa £750 per square foot it makes sense,” he said. “Most areas in the doughnut around central London are now well over £750 per square foot, with £1,000 not unusual, making these investments very good value.”
About half of all digdowns are being undertaken by developers seeking to make greater profits, Mr Mead said, with the remainder done by families wanting more living space. Buyers of homes worth more than £2m face paying 7 per cent stamp duty, making basement conversions an appealing and financially sensible alternative, he said.
Ben Macmillan, owner of Argyll Building Services, which specialises in digdowns, said he had “absolutely” noticed a boom in areas such as Fulham.
“It’s a much cheaper way of getting a much bigger property,” he said. “You’ve got a lot of hassle obviously doing the project, and you probably have to move out [while the excavation takes place], but people don’t want to relocate because of their kids and schools.”
With a typical size of about 1,000 square feet, a basement extension can be expected to cost at least £500,000, meaning it is only cost-effective for properties at the top end of the market.
Although digdowns are concentrated in the highest-value parts of west London, expensive properties all over the city are being extended. London’s biggest basement excavation, at Witanhurst, a 1913 Queen Anne revival mansion in Highgate, north London, won planning permission for its unknown owner in 2011. The two-story extension, including a pool and staff quarters, almost doubles the property’s size.
Price indices have presented wildly contrasting pictures of the health of the housing market – according to some the boom is back, while to others the slump staggers on
Westminster Council is the only area neighbouring Kensington and Chelsea to have seen a drop in applications year on year. Robert Davis, deputy council leader, said planning guidance issued last year might have helped dissuade developers.
“Our policy is still to be formally adopted, but we have issued advice to developers already and it looks like that might be helping the situation,” he said. “We think our approach to limiting mega-basements is pragmatic and sensible and will help to curb the disruption experienced by many residents in Westminster.”
Some underground developments are “akin to the decks of a nuclear submarine”, Mr Davis added. The council is set to follow K&C in seeking to bring in tighter planning rules, aiming to introduce them next year.
The growth in Hammersmith comes despite the council’s tightening of the planning rules last summer. A spokeswoman for Hammersmith & Fulham Council said they did not know whether their planning changes had dissuaded anyone from submitting applications for digdowns.