Buy a basement to bag a bargain in St John’s Wood and Marylebone
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Basement, or ‘lower ground floor’ flats currently cost a third less than properties on higher floors in such central north London areas as St John’s Wood, Little Venice and Marylebone.
Apartments on the lower ground floor can be as much as 45 per cent less expensive than flats on upper floors in the same area or even the same building within the boroughs of Westminster and Kensington & Chelsea, according to research by the property analyst Propcision.
The report said prices of basement flats had been reduced in order to attract buyers to such an extent that it was now possible to buy a property in parts of Westminster at the same price level as in many areas outside prime central London.
Although basement flats are often valued lower than flats on upper floors, the report found that the price gap had doubled to 30 per cent in some cases as a result of the softening market.
Richard Bernstone, director of Aston Chase, agreed that the value of a basement flat was likely to fall more than other types of property in a more difficult market.
He said: “Anything that’s slightly compromised or blighted, which in this context would mean a basement or lower ground floor flat with no redeeming features, is going to be more market affected than something on an upper floor.
“However, I wouldn’t want to apply a blanket 30 per cent discount on a lower ground floor flat.
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“If people are buying in blocks of flats they want upper floors because they want the security. If people are buying in a converted property the lower ground might have the benefit of a garden. Now that’s going to command more of a premium than an upper floor,” he continued.
“Lower grounds tend to be darker, less secure and they’re going to be cheaper because they’re less desirable. That’s the principle but it doesn’t always apply.”
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Propcision also said that some prime London investors seek out basement flats in search of higher rental yields. However, Mr Bernstone noted that while a basement flat might offer better yield, an upper floor apartment would be more likely to provide better capital growth.