Yahoo Finance Watch this (air)space: Clapham airspace ‘with development potential’ to be auctioned for £10,000
As land in London grows more expensive, and with plots themselves in short supply, it is no wonder that even the most unlikely sites are viewed as having lucrative development potential: infill plots, say, or large gardens, car parking spaces and garages. Some are digging underground – and some are looking upwards.
In Clapham, airspace above a terraced building is being auctioned for £10,000.
The three-storey building, at 47 Northcote Road, close to Clapham Common, is currently home to an eastern Mediterranean restaurant and two flats. The airspace above it would extend to around five storeys, says auctioneer Phillip Arnold. Unsurprisingly, it is “sold with vacant possession”.
The airspace above a building is typically owned by the freeholder, as at Northcote Road, and is sometimes —but not frequently— put on the market. “They’re quite a rarity,” says Arnold, who last auctioned airspace before the pandemic. “They’re few and far between – mainly because the upper flat owns either the roof space or the base of the roof.”
“Anyone buying one of these has got to look out for what’s in the current top floor flat’s lease,” Arnold adds. “Sometimes the lease may say it owns the base of the roof. If it did, it doesn’t matter what planning you get, you’d never be able to build on it because the person who owns the top flat can turn round and say: ‘Sorry, that’s my roof.’ In this particular case, the freeholder owns it, so thankfully, it’s not an issue.”
The airspace, which is being sold by the freeholder, is marketed as an opportunity for further residential development. Next door, at 43/45 Northcote Road, the airspace above the building is currently in development, which provides a precedent.
The existing three-storey building, which, like number 47, originally contained a commercial unit and two three-bedroom flats, is being demolished to create a five-storey building with commercial space and five flats. The whole building, apart from the shop, which has been sold leasehold, is owned by the freeholder, according to the Land Registry.
At number 47, however, the top floor flat —a three-bedroom maisonette with an outdoor terrace— was last sold leasehold in 2020 for £620,000. How the sale of the airspace and any potential development affects the owners of that property remains to be seen.
“The freeholder is going to be granting their permission to develop it,” says Arnold. “Whether that leaseholder gets much say in it, I’m not sure. With any planning application that’s made, I’m sure they can take that up with the local planning office. But whether they can get it stopped or not, that’s another question.”
Despite the freeholder’s consent to develop the airspace, planning permission from Wandsworth Council is not guaranteed. “But the fact that next door’s got it – there’s probably a fair chance,” says Arnold.
Arnold expects the airspace to appeal to a dealer or developer, but believes that a buyer is likely to sell it on rather than developing it themselves. “What I’d expect to happen is that somebody will buy it, they’ll get the planning and then they’ll try and sell it on again to a builder. That’s generally what tends to happen.”
While some believe that airspace development represents a potential solution to London’s housing crisis, the projects require the backing of residents, are often complex and can become controversial. Southwark council’s plans for a major rooftop programme in 2019, for example, were eventually scrapped.
The airspace on Northcote Road is being sold with a 150-year lease and, were it developed, is likely to be turned into further residential accommodation. For the freeholder, though, selling the airspace is an opportunity to capitalise on their property. “I think they’ve identified an opportunity to make some money out of it,” says Arnold.
The guide price for the airspace is £10,000. “I’m sure somebody will take a punt on it,” he says. “There’s a still a risk attached to it —you could buy it and end up not getting planning— so I don’t think it will go [for] vastly over [the guide price], but I might be wrong.”
Airspace is often sold at auction because, says Arnold, it is a quick means of selling that attracts the dealers and developers who are most likely to buy a property like this. The airspace above 47 Northcote Road will be publicly auctioned on Thursday 7 December, via Phillip Arnold Auctions.
“If you can pull it off —buy it and get planning— it’s the cheapest purchase of something to develop that you’re ever going to get,” says Arnold. “The build cost isn’t going to be cheap, but the purchase price offers a chance to make a very big profit on it.”
