Planning applications for householder developments to enlarge their homes have increased by an average of almost 13 per cent across all London boroughs.
Domestic buyers being pushed out
The trend to enlarge rather than trade up is most pronounced in areas favoured by residents who live and work in the capital, rather than investors or oligarchs who have historically favoured prime central London.
The largest increase was in Haringey where planning applications increased by 38 per cent followed by Greenwich (34 per cent increase) and Ealing (30 per cent increase). In fact, those boroughs with the biggest appeal to domestic buyers, typically outside zones one and two, have all seen major increases in planning applications to improve their homes as Londoners choose to improve not move.
Overseas investors no longer buying or renovating
Prime central areas have long been popular with overseas investors, but the strong pound and increases in Stamp Duty have dramatically cooled this market with transactions declining by as much as 30 per cent in prime central boroughs.
The decline in transactions has also translated into a broader loss of confidence in Prime Central London, with fewer applications to extend and renovate.
Planning applications have seen the largest decrease in Kensington & Chelsea (13 per cent decrease) followed by Wandsworth (5 per cent decrease) and Westminster (4 per cent decrease).
Robert Nichols, Managing Director, 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.
However, this is not the case in Prime Central London where we have seen plummeting sales volumes and very little appetite from existing homeowners to make major home improvements. It may be that we are seeing the beginning of the end of basement developments in the wealthy, inner boroughs.
Despite Londoners staying put, and a massive drop in the number of overseas investors, house prices have remained resilient across the capital. Although 2016 may be the year that capital growth begins to plateau.”
