Crackdown expected on London’s dig-down home extensions

The downward ambitions of London’s well-heeled property owners may be coming to an end after more than a decade of digging down in order to create the bare necessities of high-end life: subterranean ballrooms, swimming pools and spa complexes, plus garages with lifts and turntables for cars.

Dig-downs have added grandeur and value to some of London’s smartest addresses, but anyone who wants to follow suit may in future struggle to get planning permission.

The main reason for the coming restrictions on dig-downs is the months, sometimes years, of noise and nuisance they cause in otherwise peaceful neighbourhoods. Goldman Sachs managing director Christoph Stanger found this out the hard way last year when cracks appeared in neighbouring properties after excavations at his Kensington home.

There is also a question mark over the value of some dig-downs, but, either way, the rules and regulations around getting planning consent for dig-downs are tightening. Kensington and Chelsea council is introducing new planning regulations to restrict dig-downs and Westminster City Council is likely to follow suit.

The government is also taking action via a private member’s bill aimed at regulating underground activity for the first time. The subterranean development bill has completed its parliamentary stages and is waiting for the government to update its regulations accordingly.

The bill proposes a new type of planning application and a code of conduct for underground works. It will require developers to inform neighbouring households a month before starting work, and will give local councils the power to increase properties’ council tax if they decide the dig-down has added substantial extra value to the property.

Back lit, colour-changing dance floor on Hogarth Architects’ dig-down. The project nearly doubled the size of the house

Given the hassles, why do homeowners take on such ambitious works? In part it is because it is rarely possible to extend skywards given the capital’s conservation rules but it is also about money, given the spiralling costs of moving house.

“The joy of the basement is that it’s entirely new space that you’re digging out of the ground,” said Alexander Lewis, a partner at estate agent Knight Frank. “But it’s a pain. You’ll probably have to move out. It’s a big undertaking. It only stacks up in areas where the value of the land is likely to exceed the cost.”

At a minimum build cost of £200 per sq ft, Lewis estimates that a value of at least £400 per sq ft is needed before a dig-down is worthwhile. Total build costs can reach £600 per sq ft in many cases. That means basement excavations are only financially worthwhile in parts of central and west London, along with a handful of other small high-value areas.

The kitchen in Hogarth Architects’ dig-down project for owners Claire and Ian Hogarth in west London

“Any family area where average prices are over £1m, people will be thinking of doing the basement,” says Lewis. “It’s becoming the norm in the same way that loft conversions once did. On every single street in Fulham there are houses where the basements are being dug out.”

Belgravia, Knightsbridge, Chelsea and Holland Park are dig-down hotspots. Planning applications in Kensington and Chelsea have soared from just 13 in 2001 to more than 300 last year. Complaints from local residents have risen as well.

“The majority of people in Kensington and Chelsea have been waiting for us to [rein in dig-downs] for years,” said Tim Coleridge, a Kensington and Chelsea councillor and planning policy member. Some of the construction proposals the council had received were “absolutely monstrous”, he added. “One was withdrawn recently that had a basement as big as the existing house and would have involved over 1,000 truck loads of earth being excavated and removed. It drives people potty.”

Central London dig-down by Jason Wren of Shape Architecture

It is a messy business. Even a small single-storey excavation can produce 200 lorry loads of earth, and take six to 12 months to complete. Yet compared with the hassle and cost of moving house, it still makes sense for many people. “Moving house costs money – stamp duty, agents’ fees and legal fees all add up to a ballpark 10 per cent of the property’s value,” says Alan Waxman, founder of developer Landmass London, which specialises in dig-downs. “If you’ve got a £3m property, that’s £300,000 you’re going to lose. If you can spend £500 per sq ft to expand the size of your existing property then the maths of doing a basement are undeniable.”

Alexander Lewis agrees with that view. “It’s the government that has driven people to do this – stamp duty is at 7 per cent on a £2m house. [A dig-down] is a better use of money than paying stamp duty to move house. When land values are as high as they are, it’s a no-brainer.” he says.

However, it doesn’t always make financial sense, warns Peter Preedy, an associate director at London estate agent Jones Lang LaSalle. “A lot of people don’t really think it through – they start sticking in cinema rooms, a gym and so on, and end up with a big two-bed house. For the money you’ve spent on that house, you could probably have bought something bigger elsewhere that would be better value. And the resale value is just not as good as people think.”

Anthony Griffiths, a partner at estate agent Savills, echoes these warnings against greed. “The market has got a little carried away with expectations of rate per sq ft that wouldn’t really apply when you take it to the market or go to a valuer who is acting for a bank, such as me. If you go deeper and deeper, the value is not as great as people think.”

There are also other financial considerations to take into account. People living in flood-risk areas will find their insurance premiums may soar if they extend downwards. And the construction challenge can be problematic – waterproofing does not always work the first time.

Dig the details: How to avoid the basement blues

● High ceilings are important to avoid a claustrophobic feel. The minimum floor-to-ceiling depth should be 2.75 to 3.2 metres.

● Swimming pools. “It’s got to be a fairly large house to make a pool worthwhile,” says Alexander Lewis. “We often tell developers they’d be better to install a really nice wine room or cinema rather than a pool.” Peter Preedy agrees: “Hot tubs, steam rooms or saunas make better use of a small space than a pool.”

● Natural light is essential. “That can mean design compromise in other parts of the house, such as light wells, glass floors or roofs, and internal gardens,” says Alan Waxman.

● Anything that will help to mollify the neighbours during the work will improve build time and limit hassle. “When you hear of people getting aggravation from their neighbours, they probably never bothered to knock on the door and explain what they wanted to do,” says Waxman.

● Those who already have dig-down consent, “are very lucky and should get it done before the consent runs out,” says Anthony Griffiths. “The days of these iceberg houses are coming to an end.”

Slideshow: London dig-downs

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