Simon Barnes explains why big isn’t always best when it come to buying property in Prime Central London
The obsession with digging deeper or adding extra floors to create more space and assuming that this will add value, is a current trend in Prime Central London. In the past, buyers would enquire about properties based on the number of bedrooms, reception rooms and how the space flowed, the property’s overall layout and number of floors.
The shift to the emphasis of ‘square footage’ dates back to the mid ’90s. In the Far East during this period, developers were pre-selling developments off-plan, primarily to investors, where all the flats were identical in layout. In Hong Kong a typical new build two bedroom flat would be around 200 sq.ft, whereas in London it would be double that. That’s when the trend for basing value on the amount of square feet first emerged in London. Over recent years, the growth in the UK new build residential market has certainly influenced the focus on square footage because flats are getting smaller, so square footage becomes more important.
However, in Prime Central London the restrictions applied to listed buildings, or properties within a conservation area, mean that there is a limit to the increase in size permitted for a traditional layout in a town house. Most buyers prefer a normal layout with accommodation over two or three floors, offering decent sized reception space on the ground floor and four bedrooms on the first floor, with a master suite on the top floor. Adding an additional 800 square feet of space won’t add value, unless there’s a workable means of extending the ground floor to enhance the existing layout.
A few years ago, I was acting for a developer client. I showed him a really quirky studio house in Little Venice, that was unmodernised with a practical arrangement of space in a great location, perfectly suited to a young professional or couple. On viewing, my client’s immediate reaction was to plan to extend and make the space bigger with the intention of increasing value and profit. I advised against this because firstly, it was unnecessary and secondly, in making it more expensive, it would price out the buyers most likely to snap it up. Ultimately, on taking my advice, the developer focused on modernising the existing house, and the property was sold straightaway to a young professional couple, as predicted at the outset. The moral of the tale is that it is possible to stay smaller and yet enhance the value and importantly ‘buyer appeal’.
Most London houses follow a fairly similar pattern when it comes to required accommodation; rarely will a buyer insist on a basement casino two floors below the pool already located in the basement; or a further six bedrooms over three extra floors. For example, in Belgravia, there are houses in certain streets, which are narrower and have two extra floors, being arranged in all over five floors. The value of such properties will be different from those with more lateral and useable space laid out over fewer floors. Likewise a mews house comprising of around 3,000 square feet over two floors might seem to a developer an opportunity to double the square footage, create two extra floors and include a cinema in the dug-out basement. However, on doing this, the mews house once appealing with a practical layout, period charm and quiet location, is morphed into a large overdeveloped space, out of place and uneasy alongside its natural neighbours.
Taking the formula of each square foot of building in Prime Central London being worth between £3,000 – £4,000 can be a costly mistake when developing or extending a property.
Personally, I believe that it is a crude way of arriving at a value, when so many other factors need to be taken into account. How space is configured, and how space really works inside the home for those living there, should never be underestimated or undervalued. Remember bigger isn’t always better.