Building basements increases value of London homes by 54%

Adding a basement in London boosts the value of property by 54%, based on the amount of new space that’s created, Foxtons analysis shows.

With the average London home being worth £8,210 per square metre, adding a basement living space could boost home values by £460,000 in the current market, based on a 56 square metre basement.

Clearly adding a basement isn’t a cheap exercise, as constructing the space averages at £3,000 per square metre when creating a new one from scratch, while there are other costs to consider such as architect and planning fees – meaning it costs an estimated £168,000 to renovate.

However even after taking this into account London homes could be boosted in value by £292,000, Foxtons said.

Guy Gittins, Foxtons chief executive, said: “If there’s one thing that’s sure to add value to a London home it’s the addition of more living space.

“For most, this means adding an extension or a loft conversion, but for those really looking to maximise their property’s potential, ‘digging down’ allows them to seriously increase both the size and value of their home.

“Of course, it’s a complicated process and one that requires a lot of planning and a sizable budget to achieve. It may also make you a tad unpopular with your neighbours due to the lengthy and extensive construction process required.

“However, for those who can execute such a mammoth renovation project, it can be well worth it. Not only will your home command a much higher price when you do come to sell, but it will hold far higher appeal in the eyes of prospective buyers when compared to the competition.”

Prime market basements bring the biggest benefit

Naturally, ‘digging down’ adds the most value within the prime London market and so it’s hardly surprising that so many high-end homeowners have opted to add a basement to their prime London property.

The research by Foxtons shows that in Kensington and Chelsea, the addition of a basement can add almost £1.2m to the value of the average home once the cost of construction has been accounted for, equating to a 96% increase on the average value of a property in the borough.

In Camden, the actual added value of a basement can boost the average value of a home by £683,075, an increase of 84%. In Islington, it would increase the value of a home by 81%, with Westminster (+78%), City of London (+76%), Hammersmith and Fulham (+75%) and Wandsworth (+69%) also seeing some of the largest uplifts.