A boiler room in the basement of a block of flats is expected to sell for more than £250,000 at auction.
Buying a home in London is getting further out of reach for most people with the average property now costing more than £500,000 for the first time.
A typical home costs a staggering £768,000 in fashionable Bloomsbury – but an unusual opportunity has popped up for someone looking to buy in one of the city’s most expensive areas for a fraction of the normal price.
This is because it is a two-room basement which in the past was used to provide heating and electricity to residents.
As modern boiler and electrical equipment has shrunk in size over the years, an upgrade at the block has freed up enough space to sell the basement off.
The vendor has managed to secure planning permission for the site to be converted into a tiny two-room apartment.
With 550 sq/ft, the finished flat will be just over half the size of the average new home in England.
It will have one bedroom, an en-suite shower room and an open-plan kitchen/living room. There will also be a hallway with space to store a bicycle.
The boiler and electrics room will be auctioned by Savills on December 14 at its London sale with the agent giving it an estimate of in excess of £250,000.
It is in the same Victorian apartment block, near Great Ormond Street, that an unexcavated basement recently sold for £150,000.
Robin Howeson, associate director at Savills auctions, today (Mon) described it as “an exciting development opportunity”.
He said: “Although currently used as the boiler room, this 550 sq/ft basement unit has planning permission already in place for the creation of a one bedroom self-contained flat.
“Located in Bloomsbury, a sought after area of central London where the average price of property has reached £768,669, this lot offers buyers an exciting development opportunity.”
The sale of the basement follows last week’s announcement that the average home in London now costs £503,431 – up 10 per cent on 2014.
This double digit growth means the typical London homeowner saw the value of their house increase by £932 PER WEEK last year.
The borough of Camden, where the boiler room is located, now has an average property price of £847,321 – more than four times the average price in England and Wales.
But while prices go up, sales have gone down with transactions in the capital dropping 20 per cent year-on-year, according to the most recent figures from the Land Registry.
Experts blame a lack of supply as well and high prices which make saving for a deposit more and more difficult.
Simon Rubinsohn, chief economist at the Royal Institute of Chartered Surveyors, said: “Activity is subdued and this is due to a number of reasons, in particular the lack of supply.
“Prices are being squeezed up because of the lack of supply. It is a legacy of the last financial crisis which resulted in a shortage of housebuilding.
“The backlog of undersupply is now visible in the market and it will be interesting to see if the new developments help plug the gap.”
Jo Eccles, managing director of Sourcing Property, added: “It is now very expensive to buy, sell, and trade up gradually, so people are moving homes fewer times and, therefore, there is less turnover of property.
“Affordability simply isn’t there. Wages haven’t risen enough to keep up with house price inflation and that has really hampered many buyers’ prospects of saving up for a deposit and getting onto the property ladder.”