Londoners pay to improve homes rather than move

Planning applications for major home extensions in London increased by 13 per cent last year

Dominic Lipinski/PA Wire

Jonathan Prynn, Business Editor @JonPrynn

17 February 2016

London’s “improve not move” trend is gathering pace with planning applications for major home extensions surging by almost 13 per cent last year, according to new figures.

The increase almost exactly matches the drop in the number of homes changing hands in the capital over the same period as owners choose to enlarge their own properties rather than pay thousands of pounds in stamp duty when they move.

In some boroughs applications for work such as back and side return extensions, loft conversions or basements have rocketed by more than 30 per cent, according to data compiled from town hall records.

The biggest rise of all was seen in Haringey with a 38 per cent rise in the year to September followed by Greenwich with 34.4 per cent. Across London as a whole applications were up 12.6 per cent from 31,760 to 35,776.

The only local authority areas where they fell were expensive central London districts such as Kensington & Chelsea, where they were down 12.6 per cent, possibly because of less demand from wealthy foreign buyers wanting to undertake major renovations.

Increasing numbers of London homeowners are choosing to stay put rather than trade up to bigger properties, the figures suggest.

Property experts believe this is partly because the cost of moving has exploded in recent years largely due to higher stamp duty rates. Buyers moving to a typical £500,000 London property now have to hand over £15,000 to the Treasury on top of estate agency, legal and removal costs.

Another factor is that the long boom in London prices has stretched the gaps between the rungs on the property ladder, making it much harder to make the traditional trade up from, for example, a first-time buyer flat to a three- bedroom house.

Robert Nichols, managing director at estate agent Portico.com, said: “London has become a city of home improvers not movers. Our research shows that although the number of transactions continues to plummet, householders in all but the most expensive central London areas are making significant improvements to their homes as they choose to stay put.

“This is not the case in prime central London where we have seen plummeting sales volumes and very little appetite to make major home improvements. We may be seeing the beginning of the end of basement developments in the wealthy, inner boroughs.”

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