With London being London, seemingly any space that can be developed is being developed. The more typical schemes are loft conversions, rear extensions and everyone’s favorite, the basement dig. Another which has become increasingly popular is the extension of one’s demise into vault spaces, which are typically located beneath pavements.
There are numerous complex considerations for work of this type such as planning, feasibility, engineering, but if the property concerned is of leasehold title, then you will have to establish the value of the vault as part of the purchase of such space from the freehold company.
We have covered the methodology of valuing loft spaces in a previous blog post, as well as the initial principles as to establishing ownership in the first place. You may even find out that you own the vault and it is within your demise, but your lease may prohibit any development. Speaking to a specialist surveyor or even solicitor to determine whether the freeholder can indeed charge you a premium or simply go through the motions of a license to alter, would be the step.
Once/if it is established that as a leaseholder you do need to pay a premium for the space, the calculation is much the same as any other residual or development valuation; establish the uplift in value as a result of the works and subtract the costs. This leaves you with the profit which would be split 50/50 between you and the freehold company. The surveyor valuing this may well want to make a suitable deduction to account for the risk of such a project and this deduction is, only naturally, going to be higher than your run of the mill loft conversion.
It may transpire that the cost of the whole project (professional fees are likely to be high on a build such as this) is very similar to the increase in value meaning that the space would only have a nominal value. In more prestigious areas, such as Kensington or Chelsea, where a good share of this type of work occurs, there is still likely to be a handsome profit.
Here are Peter Barry, our Chartered Valuation Surveyors are also RICS Registered Valuers, and have the skill and expertise necessary to advise you on the value of your vault space. If you have any queries please contact us by email or call on 020 7183 2587.