Are basement extensions in decline?
The trend for luxury basement conversions in prime residential property in London appears to be in decline, says leading private wealth law firm, Boodle Hatfield.
New data shows that planning permissions for basement conversions in Westminster – home to areas such as Mayfair, Knightsbridge and Belgravia, where so-called ‘mega-basements’ became common – dropped by 27% in the last 12 months, from 136 in 2018 to 99 in 2019*.
Boodle Hatfield says that high net worth individuals have been put off from converting basements by negative publicity surrounding them in recent years. Disputes between neighbours relating to basement developments have been well-publicised in the media, which may put off wealthy families who would prefer to keep a low profile.
Artist Damien Hirst was locked in a four-year dispute over plans to extend the basement in his Grade I listed home. Robbie Williams recently ended a five-year battle with neighbour Jimmy Page over plans to build a swimming pool in the basement of his Holland Park home.
Many basement developments require significant excavation work, with the result that they usually take significantly longer to carry out than above-ground extensions. This can mean that neighbours are exposed to noise and vibration for extended periods of time.
In cases of homes that share a ‘party wall’ or dividing partition with another property, there is a risk that structural damage may be caused to the foundations. This has led, in some cases, to neighbours requesting a security deposit from the person who is extending their basement, as insurance against potential damage caused.
Luxury basement conversions in London in recent years have included such features as:
- Walk-in humidors
- Swimming pools with ‘waterfalls’
- Gun stores
- Banqueting halls
- Turkish baths
Rather than extend their properties through basement developments, many HNWs are now choosing to take advantage of low borrowing rates to purchase new homes.
Many HNWs now favour apartments in new-build, high-spec luxury developments rather than the traditional, period properties in Westminster. In 2018/19, 16 residential properties with a value of £5m and above were purchased in the One Blackfriars development at Blackfriars Bridge in Southwark**. The development accounted for the most high-value residential property transactions in the capital.
John Wevill, Partner at Boodle Hatfield says: “The desire to avoid public disputes has given HNWs pause when it comes to basement developments, leading to a decline in some parts of the capital that were previously hotspots for these types of developments.”
“Despite the potential for disagreements, the financial case for basement conversions remains compelling, with a potential value add of £10,000 per square foot.”
“In built-up areas such as London it’s virtually impossible to get planning permission for lateral extensions. Basements conversions can therefore be a good way to maximise floorspace in urban centres.”
* Source: Westminster council
** Source: Land Registry