Hello and welcome to the Experience Invest blog, where we keep you up to date with what’s happening in the UK’s property market. Research has shown that buyers are paying up to 13% extra for new properties with parking spaces in London.
A new study from Direct Line’s SELECT Premier Insurance indicates that on average, developers charge 5% of a new property’s purchasing price for an accompanying parking space. But this can rise as high as 13% in some locations; the research gave the example of a new build property in Battersea, London.
When sold with an accompanying parking bay, the property’s price increased by £65,000 – 13% of its £500,000 listed purchasing value. Meanwhile, Direct Line found that only 20% of London new build residential properties come with a parking space included in the purchasing price, in contrast with 67% of new builds in other major UK cities such as Leeds, Bristol and Glasgow.
Direct Line also suggested that building restrictions have turned new build parking spaces into a “desirable commodity’” with many developers restricting them to expensive or larger properties. For instance, a new development in London’s Hammersmith district only sells parking spaces on properties worth over £1.5 million. Meanwhile, developers in areas such as Wembley Park, Ealing, and Stratford only sell parking spaces with properties with a minimum of two bedrooms.
In some cases, developers are offering buyers the option to purchase yearly permits to rent parking bays. For example, a development in Brixton which is marketing new build apartments from £577,000, is offering parking bays at a cost of £104 per annum. In Bristol, meanwhile, parking permits are being sold for £1,400 per year on properties worth £425,000.
The price of parking permits appears to vary significantly, even within cities. In Brighton, a permit for a £775,000 property in Marina Village costs £250, but this rises to £1,000 on apartments worth £410,000 in other parts of the city.
Commenting on the release of the research, Select Premier Insurance head Nick Brabham was quoted by Property Wire saying: “Restrictions on the number of parking spaces developers can build to accompany new properties make these slots a hot commodity carrying a premium price point.
“In many new developments, those purchasing studios or one-bedroom homes are denied the opportunity to purchase a space, as they are reserved for larger properties. As larger scale residential developments are built in urban city centres, traffic volumes will become an increasing issue and planners may restrict the construction of new parking bays even further, making it very difficult for homeowners with vehicles.
“Access to secure parking can sometimes impact on insurance premiums for a vehicle, so people will need to weigh up the potential long term cost savings of purchasing a space carefully. The limited access to affordable parking spaces in many cities is becoming a serious issue, which is why we are seeing a growth in people renting out their driveways and spaces to other motorists.”
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