A driving force in the home market

A space for a car can set you back £100,000, says Graham Norwood. Are parking costs out of control?
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For about £125,000 you can buy a semi in Lancashire, or two terraced houses in Merthyr Tydfil, or a flat in Southampton. But in London, if you are so inclined, you can spend the same amount on 12.5 square metres of asphalt.

For about £125,000 you can buy a semi in Lancashire, or two terraced houses in Merthyr Tydfil, or a flat in Southampton. But in London, if you are so inclined, you can spend the same amount on 12.5 square metres of asphalt.

The £126,312 price tag (from John D Wood, 020-7908 1100) is for a space in the York House car park off Kensington Church Street in central London - the latest and surely the most expensive evidence yet that many drivers are willing to pay vast sums to park near their homes.

"I've got merchant bankers, QCs, doctors, people in music and a few in horse racing. They've all got these things in common - they live locally and need to drive in central London, and their cars are probably worth even more than the parking space, so they want something secure," says John Laws, the developer of the York House car park.

Local by-laws mean that only people with their main home in Kensington and Chelsea borough are allowed to buy in York House. About 40 spaces sold before Christmas at £102,500 plus VAT each; 40 more are now on sale at £107,500 plus VAT.

If Laws sells all of them, he will have received £11m for the spots. Bays have CCTV and video/intercom; each owner also pays £350 per year service charge and £50 in ground rent.

The price at York House narrowly beats the record set last summer when buyers of flats priced at £10m to £14m in Chesham Place, Belgravia were given the chance to buy two-car spaces in the complex for £250,000 - £125,000 a space.

But if you want an old fashioned bricks-and-mortar garage in prime central London, you must pay more - the highest-known price was £140,000 handed over for one in Allen Street, Kensington, in April 2004.

"It's a strange market, but there's a constant demand. Whatever the condition of the housing market, there are always people wanting somewhere for their car," says Tom Tangney of estate agent Knight Frank. He's selling a "tandem space" - two cars, one parked behind the other - for £130,000; again it's in Kensington.

The agency Lane Fox says it marketed a parking space in the borough for £100,000 in late April. It had several people competing to buy, and a deal was done within 48 hours at well over the guide price.

The problem of parking near your home is inevitably worse in London. Kensington & Chelsea council, for example, issues 63,000 resident's parking permits a year but provides only 26,000 spaces. But the trend is spreading; in some new developments in Clerkenwell, just outside the central London zone, spaces go for up to £30,000. In Brighton, a new development by Avalon Homes is charging £12,000 a space. Some central Edinburgh schemes are thinking of charging £20,000 a space.

The parking market is gaining momentum because of a growing trend for councils to refuse planning permission for any car parking in new homes. Officially, this is a bid to avoid further traffic congestion and to support public transport; in practice, it fuels demand and prices for private car-park spaces or garages.

Tony Walshe, a developer who built the Base Central apartment block in Camden, says he wanted to include a ground-floor parking space for each of the 50 flats. "The council refused point blank," he says.

Some planning authorities are going further. Twelve London boroughs, including Camden and Tower Hamlets, refuse to allow buyers of new homes in specified areas from even entering into residents' parking schemes, which habitually have more "members" than there are spaces.

Property analysts say this isn't a major problem when most apartments in a block are bought by investors, because most city-centre tenants aren't car owners. But with the rental market saturated in many city centres, new flats are increasingly being targeted at owner-occupiers, who are car users.

We have seen houses shoot up in value; we have seen flats not yet built traded like shares; now car parking may be the next big property market. "If you live in a house in a city and have a garage, hold on to it," says an agent in Manchester. "If you don't, what about converting the front room?"

Parking space

We asked estate agents in towns and cities how much an existing garage in a central location, or a parking space in a new block of flats, might cost:

Central London Up to £130,000 per space

Fringe central London Up to £35,000

Edinburgh Up to £20,000

Dartmouth, Devon Up to £18,500 (garage)

Manchester Up to £17,500

York Up to £15,000 (garage)

Reading Up to £14,000

Outer London Up to £12,000

Harrogate Up to £10,000 (garage)

Leeds Up to £9,000

Southampton Up to £6,000

Cardiff Up to £5,000

Bristol Up to £3,500

Truro Up to £2,000

Plymouth Up to £1,750