Last updated: April 7, 2012 12:14 am

In a hole? It’s time to stop digging

In London’s smartest areas the cost of excavating basement space is only £500 per sq ft

I have a Zimbabwean friend who could double for Crocodile Dundee. Once, much to my mystification, he told me he was amazed how many people in London live in holes in the ground.

He was talking, of course, about basement flats – and I share his viewpoint. I’ll admit it: I’m prejudiced. I’ve lived in two holes in the ground in my life and I will walk up any number of stairs rather than repeat the experience.

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Perspective

Wander the streets of central London and it can seem as if everyone aspires to live like hobbits. Basement excavations are becoming so common that they’ve spawned a new concept – the “iceberg house” – where there is more below the surface than above.

It is a peculiarly London phenomenon mainly because London is the least dense capital city in the world, with only 78 dwellings per hectare compared with 300 in Paris and 1,700 in Kowloon. It was in Hong Kong that Henry Tang, who recently stood for election as the territory’s chief executive, was caught with an unauthorised 2,200 sq ft basement below his house that included a wine cellar, cinema and Japanese-style bath. His wife apparently built it without him noticing. In New York, water close to the surface, a particularly hard rock called Manhattan schist and a more litigious society have kept the lid – so to speak – on the more over-the-top (or perhaps that should be under-the-bottom) extremes.

London leads the way because the majority of its housing stock is houses rather than apartments. Two egregious examples of the lengths – or rather depths – that owners and developers are prepared to go to are a 5,000 sq ft house in Kensington with a 3,000 sq ft basement and a house near Kensington Palace with permission for three floors below to include a tennis court – not exactly a sun-kissed Wimbledon.

The economics are compelling when the cost of above-ground space in all the best areas is well above £2,000 per sq ft and the cost of digging down is only £500 per sq ft. It doesn’t follow, however, that buyers are prepared to pay the same price for the Stygian charms of a subterranean cinema as for a view of a garden square – although some estate agents’ asking prices would seem to imply that.

Excavating and carting away this quantity of London clay has made the lives of those who can’t stand basements, those that can’t afford one (and probably those who have already built one) increasingly unpleasant. The planners’ hands are tied, with most of these excavations coming under the heading of “permitted development”. Although they are allowed to refuse further excavation in listed buildings, the garden is still fair game, and some holes are so big they can be seen on Google Earth. There are signs, however, that this may be changing.

First off is the new community infrastructure levy, which is intended to tax developments in order to fund future infrastructure. The “Boris Bite”, as it is beginning to be known in London, is levelled at £50 per sq metre – or slightly less than £5 per sq ft; more of a nibble than a bite really. However, individual councils are looking for rather more – £350 per sq metre in the case of Merton, and £200 per sq metre in Brent. Given the values in Westminster and in Kensington & Chelsea, it is likely that the councillors there will have a banquet in mind. These, like the higher levels of stamp duty, will probably be seen as more of a nuisance than a block to the excavators of the prime postcodes – though it may make the economics more marginal further out.

Then there is the national planning policy framework that was published at the end of March. It is long (as these things often are) on exhortation and good intentions – but short on detail. The overall thrust is towards localism and giving teeth to neighbourhood development orders, which are designed to give parish councils and “neighbourhood forums” powers in the planning process. These are forums-in-waiting for dust-covered denizens of prime London itching to call time on the endless skips littering their streets. One of these skips recently disappeared into a hole in the ground that opened up in Chester Row, Belgravia, revealing a catacomb below. No doubt the perceived risk of this happening to a mother and pram will add further emotion to the debate.

In the meantime there is a certain Schadenfreude among those unable to afford to live in the most expensive streets in London. They may have suffered riots – but at least they are free from the weekly noise and mess that now goes with the turf of prime London.

Charlie Ellingworth is a founder and director of Property Vision

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