This is an example of the monthly longform articles I write for one of my clients, a property services specialist based in London. These pieces are designed to engage audiences of property professionals and investors, tackling topical issues and placing my client as industry experts. The article can be seen in its original context at the link below.

https://awh.co.uk/thought-leadership-articles/hidden-value-in-the-home-unlocking-untapped-potential/

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Hidden Value in the Home: Unlocking Untapped Potential

In a housing market as stretched as the UK’s is, the search for value is shifting away from the obvious “bricks and mortar” and increasingly towards spaces beyond what is immediately visible. For residential property investors, this means looking beyond standard acquisition models and asking a different question: What untapped potential is already built into an asset?

This thinking is underpinned by stark supply-side realities. According to the Centre for Policy Studies, the UK currently faces a housing shortfall of around 6.5 million homes when measured against comparable European countries. With new build rates unable to keep pace with demand, existing assets are under pressure not only to deliver yield but to realise latent value.

This is where expert property managers, surveyors, and asset advisors play an increasingly vital role. By understanding the often-overlooked elements of the built environment, professionals can identify and unlock underused potential within existing holdings. These opportunities, when strategically assessed and properly executed, can deliver significant returns, support long-term resilience, and make better use of constrained urban footprints.

Read on to explore four key overlooked zones within residential property: airspace, basements, rooftops, and underused communal or service areas. We will examine the commercial logic, the regulatory and technical considerations, and the kinds of expertise required to transform latent potential into realised performance.

After all, value creation is not always about expansion, but about seeing what’s already there.
Airspace: The Vertical Frontier
Airspace development concerns the exploitation of the volume above existing buildings, and in dense city locations where land is either fully used or prohibitively expensive, it offers a pragmatic route to creating new value.

This potential is formally recognised within UK legislation. For example, existing permitted development rights (PDR) now allow certain buildings in England to be extended upward by up to two storeys to create new homes, without the need for full planning permission. Despite this, current delivery remains modest, with a recent industry briefing noting that just 1,022 new build units in England were completed under upward PDR in 2023.

The value proposition of airspace development is multifaceted. Firstly, freeholders can gain income by selling or leasing the additional storeys, or by entering into joint-venture arrangements with specialist developers. In one case cited by The Independent, a group of north London flat owners sold the airspace above their property for £1.25m and enjoyed an increase in value of around 20% on their existing flats. This illustrates how the benefit goes beyond the new floors themselves: an improved building and repositioned asset can deliver overall portfolio enhancement.

Secondly, by enabling new units, an airspace scheme often justifies a revised valuation of the host site. This approach is often referred to as the “plinth plus uplift” model, which is a way of viewing a building as both a platform (the plinth) and a development opportunity (the uplift). In many cases, the uplift enhances the original property’s appeal and market value, creating a compound effect across the asset.

Airspace development also holds strategic and ESG benefits. Given the UK’s constrained land supply, delivering additional homes without footprint expansion appeals to policy-makers. It can help spread the cost of upgrading existing buildings. For instance, improving roof insulation, installing improved lift systems or modernising common areas can all fall under uplift works, giving all-round benefits to the building.

Despite the benefits, relatively few developers are venturing successfully into this space, perhaps deterred by the critical issues at play, such as calculating a building’s structural capacity and ability to take an extra load, as well as rights of light and party wall matters, tenant protection during construction, and careful negotiation of air rights with existing leaseholders.

Furthermore, even under PDR, local authorities still require prior approval for factors such as external appearance, transport/ highways implications, and flood risk, meaning that skilled planning advice and early engagement are key.
Basements and Downward Expansion
In many mature urban areas, where horizontal expansion has largely been exhausted, real-estate professionals are increasingly turning their attention underground. Converting basements or creating new subterranean space offers investors and managers a practical route to adding floor area, increasing rental streams, or delivering additional units without expanding the site footprint.

In the UK, research indicates that a basement conversion can add around 10%-15% to the value of a home. In London’s premium markets, uplifts of between 69% and 96% have been observed when major basement development is carried out.

From a commercial perspective, basement-level development can deliver significant advantages. For freeholders or long-leasehold holders, converting basement space into self-contained units or high-quality ancillary space can generate new rental income or sale value. Meanwhile, a successful basement project can trigger a re-valuation of the host building, raising the overall block value rather than simply the new floor area. Furthermore, where lateral or vertical expansion is limited by planning or structural constraints, going downward becomes an effective alternative for value enhancement.

However, the engineering, planning and operational risks associated with basement works are significant. One key issue is structural capacity: excavation beneath an existing building or lowering a floor level typically demands robust underpinning, and must be planned carefully with structural engineers. Access and tenancy continuity can be another deterrent, as the works can be very invasive, and tenant disruption needs to be managed proactively. At the same time, substat

At the same time, the planning and legal complexities can be significant, as works such as excavation, adding lightwells and change of use may require full planning permission. Furthermore, subterranean spaces are inherently at risk of damp and poor daylight, so compliance with building standards can be difficult and costly.
Rooftops and Communal Areas
In densely built-up areas where every square metre matters, rooftop and spaces above a building represent one of the most underused zones of residential assets. Transforming these into active use can deliver not just aesthetic or amenity benefits, but concrete commercial uplift.

A growing body of evidence underlines the market value of sustainability and amenity-rich assets. For example, research finds that tenants in the UK are willing to pay, on average, a 13 % premium on rent for homes described as “green” or low-carbon. While this figure covers broader sustainability features, it points to a willingness among occupiers to prioritise better-designed, value-added spaces, including rooftop terraces or green roofs.

Commercially speaking, development of a rooftop space can lead to direct income generation: The rooftop can host new units, penthouse extensions, and amenity pods containing shared facilities such as gyms, workspaces, lounges or even cafes. Rooftops are also ideal spaces for solar power installations, which can be leased to energy companies. For multi-unit residential buildings, adding a rooftop lounge or terrace can allow a premium “amenity charge” or justify higher rents.

By enhancing the overall quality and appeal of a property via landscaped green rooftops or a communal rooftop space, the whole building often benefits from a higher valuation multiple. Investors increasingly view amenity-rich schemes as less risky and more attractive to tenants.

Furthermore, green roofs, biodiversity enhancements, urban cooling benefits and rooftop solar systems appeal to planning authorities and can unlock incentives. Roofs are already recognised as critical surfaces in climate adaptation: a UK study found that roof space accounts for 40-50 % of the impermeable surface of urban areas, signalling a clear planning rationale for reuse.

However, the transformation of rooftop spaces is not without challenge, and it requires the same rigour as any development project. Key considerations include structural capacity (can the roof slab take regular public use?), waterproofing and drainage design (flat roofs are notoriously vulnerable to water ingress), fire safety and escape routes, and tenant disruption during construction.

While roofs are typically considered cost centres due to the need for maintenance and repair, these costs can easily be cancelled out by the space’s potential to elevate income and capital value. With the right structural survey, planning strategy and amenity design, the rooftop could become one of the most strategically valuable layers of your asset.
Unlocking “Micro-Assets”
In many residential portfolios, the spaces that support the main building, such as garages, service yards, car parks, storage rooms, lifts and landings, are often regarded as cost centres, or simply incidental to the main residential value. However, these ancillary areas increasingly represent micro-assets with the potential to be converted into meaningful value drivers.

According to data from Savills, the UK’s co-living sector now reports around 9,000 operational units and planning submissions rising 87% in one year. Much of that growth is driven by communal space optimisation and shared amenity design, indicating that tenants and occupiers are placing greater value on flexible, well-utilised common areas.

For investors seeking space to create these sought-after common areas, what were once service rooms or ancillary courtyards can be repositioned as value-enhancing components.

There are several routes to unlocking this value. For example, an underused garage block or car park may be repurposed for storage units, bike hubs, or micro-workspaces, depending on location and planning. Existing communal rooms or corridors can be upgraded to provide shared lounges, parcel drop-points, or coworking pods, adding income streams or uplift in rent. Meanwhile, outdoor spaces and service areas can host telecom infrastructure, solar panels, or EV-charging points, generating long-term service income with limited construction risk.

However, maximising micro-assets requires specialist insight. Issues such as identifying legal ownership boundaries, ensuring compliance with building regulations and fire-safety standards, managing tenant impact and rights of access, and conducting cost-benefit modelling to ensure the upside outweighs disruption all call for careful consideration and expert advice.
Regulatory and Planning Insights

Approvals for new homes in England dropped to a 13-year low in Q1 2025, with only 39,170 units given the green light. This marks a 55% fall from the preceding quarter, and is 32% down on the same period last year. Without careful planning and expert advice, developers risk falling foul of the planning system and losing out on opportunities to maximise value.

Many airspace and rooftop extensions benefit from permitted development rights (PDR), but they still require prior approval based on factors such as external appearance, access, highways and more. Understanding the local authority’s interpretation of PDR is essential before applying.

Structural, legal and rights-based pre-conditions can also delay or derail development plans if overlooked. Common considerations include party-wall matters, rights of light, leasehold versus freehold ownership of strata, boundaries of common parts, and building regulation compliance, such as drainage, fire escapes, and accessibility.

With the Levelling‑up and Regeneration Act 2023, aimed at speeding planning and boosting brownfield delivery, now in force alongside evolving building regulations, investors must factor in ESG compliance when budgeting time and resources for their build. Meanwhile, the drive toward low-carbon and amenity-rich assets places material pressure on design and specification, both in terms of regulatory considerations and occupier expectations.

The latent spaces in a residential holding are only as valuable as the planning route and regulatory risk allow them to be. An expert advisor will integrate regulatory due diligence, structural feasibility and lease/legal review into the earliest phases of asset assessment, reducing the risk of wasted time and investment, and converting potential risk into predictable uplift.
Conclusion: Seeing the Invisible
Many of he greatest opportunities in today’s overcrowded housing market are not found in new plots or ground-up developments; they often exist within the properties we already own. Airspace, basements, rooftops, and communal zones are untapped layers of value waiting to be realised. But unlocking that potential requires more than creative vision: it needs technical insight, planning expertise, and commercial precision.

As space becomes ever more constrained and planning approval rates continue to tighten, investors and asset managers who can identify and activate these hidden opportunities will gain a crucial competitive edge. The value is there, but the challenge lies in seeing it early and executing it well.

At AWH, our specialists help clients uncover, assess, and deliver this kind of embedded potential across residential portfolios, from feasibility studies and planning appraisals to development management and strategic asset optimisation. Our experts don’t just see buildings, but the hidden value waiting to be realised within them.