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  • Refurbish/Develop

    Excavating Basement legitimate value add?

    Hi guys,
    Down my street this year I think about 60% of the residences have excavated a basement over the last 9 months. It is a owner occupier neighborhood primarily in London.

    However it got me  thinking, is there a good business case for decent forced appreciation doing basement excavations to add another floor, or is it really something that fairly wealthy homeowners like to do because they can afford it?

    I imagine its probably more prominent in London than out but I imagine it can get complicated from a planning point of view and probably very costly.

    Has anyone got any experience in that area?

    Cheers
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    A good teacher must know the rules; a good pupil, the exceptions.

    Martin H. Fischer

    Yeah I saw it before....  lots of neighbour complaints!! I know Kensington has slowed down granting permission for these now. I just wonder if its worth it given the expense for the property developer versus foreign investors who have more of a vested interest in parking large amounts of capital for several years in prime parts of London...


    Probably pretty unnecessary from a business perspective.

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    As you say it is owner occupier, and I would say they do it because family grow and they need more space, and selling and buying larger with stamp duty and transaction cost is less convenient than digging a basement or extend to the max the property at a large.
    I guess you talk about terrace house, semi detach in zone 1 or some part of zone 2.
    I would say anyhow that zone 1 you add value straight away.
    Zone 2 it depend, but as said the driver in most cases is to add space and know that you would recoup once/if you sell, especially being owner occupier exempt from CGT if ever.
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