PENTHOUSE DEVELOPMENT Features
Sky’s the limit The
Kevin Marshall takes a look at the increasingly popular trend for adding penthouses to blocks of flats
A lot of us will have seen examples of the increasingly popular roof extension projects now going on around the country, particularly in
major cities. So what's behind the trend? The most obvious explanation is the additional value unlocked by such schemes, in tandem with the increasing shortage of places to build new homes. In the same way that increasing numbers of private home owners are developing loft extensions, why not use the roof of a block of flats?
For flat owners in existing blocks, the natural reaction to such a suggestion may well be alarm but it doesn't have to be bad news - there are plenty of
positives.For shareholders in an enfranchised/RMC situation the benefits are obvious:
A cash injection to the company funds which could be distributed to shareholders as a dividend.
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Reducing service charge percentages for the existing flats. Money may not need to be spent on renewing the roof. A sensitively designed penthouse level can enhance an otherwise basic looking block. Free improvements to the block –such as lift renewals to suit new floor levels etc.
Even if your block is still owned by an external freeholder who would take the benefit of the cash paid for the roof space, many of these plus points still apply. Also, in return for residents' support for a scheme, freeholders will often offer some incentive in terms of cost free improvements to a block which helps the sale of their new units.
However, there can of course be disadvantages:
If poorly handled, the construction phase of development can be a highly disruptive period for residents to endure.
If poorly designed, a development can blight the block long term. If complex circumstances exist, getting a project off the ground can take some considerable upfront investment and potentially a period of many years.
Assuming these problems can be overcome, how do you take a penthouse development project forward?
Much depends on what the ownership structure is and what the leases allow, so the obvious starting point is to see if this is worth doing. Before incurring any professional fees, a good place to start will be to approach local estate agents and seek their input. Try a firm that regularly sells flats in the building; most will be keen to offer some guidance free of charge on the basis of a possible future commission. In most cases, it is the technical or planning/legal issues that thwart schemes, rather than the values achievable.
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