Over the last decade, iceberg basements have become very popular in the capital’s wealthiest neighbourhoods. Research by Labour of 12 London boroughs found that planning applications for double basements more than doubled in the five years to 2015. But digging down and hollowing out beneath a period property in a densely populated area has caused a lot of problems. Leaking gas pipes, malfunctioning sump pumps and collapsing facades have led councils such as Westminster and Kensington and Chelsea to impose a moratorium on approving these multi-storey basements, and to tighten rules on how the capital’s old, terraced properties can be modified.
“Until recently, people would keep the facade and dig all the way back and through the garden, going down two floors. They would bring the garden back above what they’d built and straighten up the back,” says Peter Wetherell, chief executive of Mayfair property agent Wetherell. But worries about the effect on the water table have led the authorities to limit how far under the garden you can build, he says. Kensington and Chelsea restricts a basement’s footprint to 50 per cent of the garden.
So are iceberg homes becoming a precious commodity, or is a multi-storey basement just a sunk cost?
The value that these basements can add to your property depends on the extra square footage and the area you live. Robin Chatwin, head of Savills South West London, says that a basement digout in a London family home priced between £1.5m and £2m could add 10-15 per cent onto its value. The cost of building them also varies, depending on how far down you dig and the purpose of the extra space.
Worries about the effect on the water table have led the authorities to limit how far under the garden you can build
But James Robinson, general manager at Lurot Brand, warns that subterranean square footage will fetch less than any space above ground. Just as a basement flat will tend to sell for less than others in a converted house, basements receive less natural light and poorer ventilation, “no matter how many light periscopes you fit”.
You may be limited in how you use the space, and in how you advertise it when you come to sell. “Whatever you do, do not put the primary bedrooms in the basement,” says Robinson. “No-one wants to go downstairs to bed, or put their children to bed in the basement with ducted ventilation. Regardless of your architect’s advice, do not do this thing.”
A wine cellar, cinema or swimming pool is unlikely to add a significant percentage onto your property’s existing value, even if you live in one of London’s most desirable boroughs. Before you start digging, consider the ceiling price in your area and exactly who your target buyers are. “If you want to sell to Arab billionaires, build in Mayfair or Knightsbridge, not Notting Hill. If you do you will appeal to no-one, it’s that simple,” says Robinson.
No-one wants to go downstairs to bed, or put their children to bed in the basement with ducted ventilation. Regardless of your architect’s advice, do not do this thing
There are a number of other factors to consider. Westminster council recently introduced an £8,000 fee on any planning application to build a new basement, citing the inconvenience to neighbours of noise, dust and traffic disruption involved in the 150 basement developments which occur in the borough every year. Other boroughs may follow suit. There are stumbling blocks even after you receive approval. London is built on a clay basin so digging is difficult, and proximity to the Thames makes basement flooding a real risk. Lawsuits brought by disgruntled neighbours are not uncommon.
If above-ground floor space sells for more, building upwards may be a better way of guaranteeing a return. Of course, the amount of floor space which could be added would be limited to what is beneath it, but new planning reforms which come into effect later this year will enable upwards extensions without council permission, provided that your property isn’t in a conservation area and your neighbours don’t object.
Unlike basement excavation, builders can limit the disruption involved in adding an extra storey by doing some of the work off-site. In London, this is an increasingly popular solution. Apex Housing Solutions constructs the extra storey offsite and drives it to the property, minimising traffic disruption and builders’ presence on-site.
This article appears in the upcoming edition of Money magazine, which will be distributed free with the paper on Thursday 27 October.