Regardless of cyclical and temporary drops in prices, the value of land and buildings in the most expensive residential zones of the UK looks set to continue to rise (Figure 1). In desirable parts of our cities such as Kensington and Chelsea in London, large property prices attract enormous attention.
Figure 1: Average house prices for Kensington and Chelsea, London, and England, 1995-2018
Source: HM Land Registry, UK House Price Index, English Housing Survey, 2018
Throughout history, big and opulent residences in prestigious locations have always been a symbol of power, and represented a way in which the richest families could show their status to the rest of the society.
However, the most affluent and sought-after city locations are also the most dense, which means some spaces are a little too squeezed for those with money to spend.
To get around this problem, prosperous neighbourhoods have seen homeowners building luxury basements. And the affluent households of the most eminent boroughs in London have increased the value of their residences with subterranean spas, swimming pools, wine cellars and gyms.
Newcastle University recently found that 4,650 basements were granted planning permission under residential properties in seven London boroughs in the past decade - some as much as 18 metres deep.
Figure 2: Basements approved in seven London boroughs, 2008-2017
Source: Newcastle University
We expect this tendency to continue, with newer, innovative ideas to develop more space within the same available land and to house incredible features like cinemas, car museums, Turkish baths or banqueting halls.
If the present rate of construction were to continue, even within London, CBRE forecasts an additional 10,000 such basements being approved by 2040. By 2040, limitations on land will probably cause the trend to expand towards other high-value boroughs across the UK.
And the voracity of developers might make them dig even deeper than the 18 metres that can be found in Chelsea today – so much so that basements exceeding 20 metres seem entirely plausible.
Underground expansions will have to deal with complaints from other inhabitants and accommodate current and planned underground infrastructure – whether that be transport, water or energy related. However, with a current refusal rate of just 9% (according to Newcastle’s study) it seems this trend is likely to grow.