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Upstairs Downstairs

As the demand for high-quality real estate in London continues to rise, buyers are delving below ground to increase their property’s capacity and value

B usiness is booming in London’s property sector. In uncertain global economic times, the capital is seen as a safe haven for investment with transparent tax laws and housing deeds and the green shoots of growth showing.

Agents are witnessing a surge of buyers wanting to invest upwards into penthouses with gold-plated postcodes, but also downwards into bespoke basement developments. Shirley Humphrey knows this as well as anybody. As director of Harrods Estates, she is in charge of a portfolio that exceeds £800m and has seen the number of international buyers increase to encompass nearly 90 per cent of the company’s business.

‘Most people are looking for 24-hour, hotel concierge-style security. That’s been the case for quite a long time now because we have a client base of international, high-net-worth individuals who travel all over the world and buy and own several properties as second homes and investments.’

She cites the relative scarcity of large four- and five-bedroom, centrally located London properties as the driving force behind the demand for high-end redevelopments.

‘It’s definitely an investment opportunity. Especially in central London; in Knightsbridge, Belgravia, Chelsea, Kensington and Mayfair. In London there are very few places that can be built on, so many are redevelopments in existing buildings.’

Humphrey mentions several key developments as being high on clients’ recent wishlists, including One Hyde Park, the much-publicised development in Knightsbridge. ‘There are also more traditional examples such as Trevor Square, which is in a conservation area and was once a Harrod’s depository. It is refurbished to an extremely high specification with just 40 apartments. Then there is The Knightsbridge, with guide prices of £18.5m, which is a very popular development.

Or Lancelot Place, which can start at £3m, which is again a new building, again in Knightsbridge and is quite an unusual property.’ Location of these developments, as always, is key.

‘Most of our clients want prime, central locations. Around 99 per cent of them want to be within walking distance of Harrods, literally that close,’ she says.

But if you’re looking to invest in central London it’s also worth considering what can happen below ground. One relatively recent phenomenon is an increase in the capital’s ‘iceberg’ properties; where owners and investors are designing and building underneath their existing houses.

'In London there are very few places that can be built on, so many are redevelopments in existing buildings.’

‘People don’t realise the amount of space that lies beneath a property,’ says Maggie Smith of London Basement, a company that specialises in surveying, designing and building basement extensions to large London properties.

‘People generally just think about going beneath their house but you can of course, depending on planning and the area that you’re in, go beyond and out under the garden. The footprint can be much larger than you realise.’

The classic large, Victorian London properties are ideal for this type of development says Smith, with key locations such as Kensington, Chelsea, parts of Camden, Hampstead and over into Hampstead Garden Suburb in high demand.

The appeal of this type of development is the flexibility of design. For a cost generally beginning at around £1m, you can design and build virtually anything.

‘We’ve designed around golf simulator machines to private spas – the whole range,’ says Smith. ‘Gyms are popular as a basement can be a natural place to put them, and we’ve even, on occasion, created nanny suites.’

‘We built one recently in St John’s Wood that had the footprint of the entire house, plus a very long garden and the mews house at the back. Under the garden was a swimming pool with a gym and spa. It was unique. It was slightly difficult to visualise at first but then we presented all the 3D renders to our client and they were amazed.’

Very often, the dramatic change to the property turns a house into two halves.

‘There is definitely a sense of competition. We’ve noticed clients are more open to trying something a bit different.’

Adds Smith: ‘They’ve often got a traditional upstairs, with lounges and dining areas, but in the basement it gets much more contemporary. It’s generally much more up-to-date in the basements. In some, the contrast is quite incredible. But it works because they are separate areas.’

And the most extraordinary design? ‘One client had two teenage girls, who were very much into their drama, and two energetic small boys,’ says Smith.

‘Out and under the bay window the room became a stage with a spotlight on it for the girls, with couches at one end and a table tennis area at the other.

‘On the other side, front to back, was an indoor park for the two boys. They had shutters that would come across the windows and they also had cricket stumps, football nets and their bikes.

When the weather was bad, they could go downstairs to their own park and let off steam. Needless to say, they were very popular at school. Their house was the place to go.’

Away from the prime central locations of Knightsbridge and Chelsea, clients are expanding their acquisitions slightly further afield, especially when it comes to developing their properties, iceberg-style.

Over the past year or so, requests for searches for North London have been increasing. ‘This is especially true for Russian clients looking in Highgate, Hampstead and Primrose Hill,’ says Penny Mosgrove from Quintessentially Estates, a bespoke-property agency.

‘Belgravia, Knightsbridge, Kensington and Chelsea remain the areas of focus for our clients from western Europe, eastern Europe, the Middle East and Asia.’

Quintessentially Estates has noticed a marked increase in clients wanting bespoke investments.

‘Frequently people want more detailed specifications,’ Mosgrove says. ‘There is definitely a sense of competition. We’ve noticed clients are more open to trying something a bit different.’

What has underlined the continued growth of high-end property sales in the capital for companies such as Quintessentially Estates, London Basements and Harrods Estates, is clients’ desire to add value to their portfolios with quality design and modernisation with a personal touch.

‘Developments can include some amazing designs,’ says Mosgrove. ‘We had a client recently who, along with a bespoke renovation of the entire property, wanted a climbing wall built into their child’s bedroom.’

Reaching upwards isn’t only in the bespoke designs it seems; clients hopefully will also see their investments’ value climb.

Words: Staff

This article was originally published in Halcyon magazine in 2013

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