By Agency Reporter

Thursday, 10 Feb 2011

LONDON: The scarcity of luxury houses and apartments on the market in neighbourhoods like Belgravia and Knightsbridge has prevented many from trading up to larger properties. Instead, they’re adding the kind of amenities often found in new developments, ranging from wine cellars and home cinemas to swimming pools, Bloomberg reported on Wednesday.

“People are enlarging houses and improving them rather than moving,” said Yolande Barnes, head of residential research at Savills Plc.

“You can either pay stamp duty and moving costs or you can add value to your home by spending the money on improvements,” he said.

New buyers want to add modern conveniences to the few luxury properties on the market, many of which are more than 100 years old. Neighbours like Evans are complaining to their local councils and even demanding compensation for the inconvenience, comparing some of the developments to mines.

Basement excavations in the Royal Borough of Kensington & Chelsea almost doubled to 147 last year from 81 in 2006. The figure was up by 17 per cent from 2009, the municipality said. Grosvenor Group Limited, the company owned by the family trust of the Duke of Westminster, gave permission for 28 basement excavations last year on its estate, which extends across Mayfair and Belgravia. That compares with just one in 2005.

The financial crisis stifled lending to developers and halted most luxury residential projects. Those that did proceed are now in demand as the weaker pound lures overseas buyers.

“The amount of money being made in the rest of the world is astonishing – confidence is more than just coming back to the London market,” said property entrepreneur Nick Candy, who along with his brother, Christian, masterminded the One Hyde Park development that opened last month. Six apartments sold there in November and December for record prices of about 6,000 pounds a square foot, he said, without giving their size.

The shortage of homes for sale in London’s seven priciest boroughs last year encouraged more people to renovate and expand their homes, data obtained from the municipalities by Bloomberg News indicate. The number of homes sold in these areas in 2010 was 30 per cent below the average of the past decade, Land Registry data show.

Source: Punch