One way to pay for communal building repairs:eight north London neighbours built a penthouse on the roof to finance £400k building repairs bill

Enterprising neighbours sold the air above their apartment block so a new penthouse could fund much-needed repairs to their West Hampstead building.

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Until recently, retired banker Jovan Mihailovic lived in what he admits was probably the shabbiest block of flats in Abbey Road, West Hampstead.

In a conservation area full of fine Victorian villas with potted bay trees and Farrow & Ball front doors, the Sixties block with rotting windows and peeling render, where Jovan, 74, and wife Milicia, 66, bought their flat 25 years ago, stuck out like a sore thumb.

Inside things were little better. The lift had long ago given up the ghost and the communal areas badly needed rewiring. The cost of the work, plus landscaping the communal garden, would come to about £400,000 — well beyond the pockets of the Mihailovics and their seven neighbours. So they kept putting off the task.

But as the state of the place became desperate, Jovan came up with a possible solution that had been right above his head all along: build a penthouse on the roof and sell it to fund the repairs.

“The building had a flat roof and it was also not as high as the other buildings in the area, so I saw that there was a chance to get planning permission to add to its height,” he says.

The neighbours agreed and their first step was to buy the freehold of the building. Negotiations were slow and sometimes fraught but in 2010 they paid £200,000 to become co-freeholders, each paying £25,000.

Then Jovan asked Camden council planners whether they might agree to the idea of a penthouse being put on top of the building. Officers indicated that — in theory — it would be acceptable, at which point Jovan started searching for a developer who might grab the opportunity to create a new home in an affluent north London conservation area.

He found Apex Airspace, a specialist in rooftop developments, and after negotiations agreed to sell on the space for almost exactly the sum needed to renovate the building.

Apex Airspace took over at that point, hiring architects and applying for planning permission, which was granted last summer. Work on site is expected to start in June, and will take about six weeks.


Apex specialises in “off-site manufacturing”, where the entire flat, including plumbing, electrics, kitchens, bathrooms and even wallcoverings, is built off-site and then craned into position in a single day.

The next few weeks are spent attaching the timber-and-steel prefabricated structure to the roof, adding cladding, and landscaping around it.

Val Bagnall, the firm’s business development director, says it has 105 similar projects in the pipeline in London, adding that the concept’s growing popularity is driven by the shortage of land for development. Haroon Bhatti, Apex Airspace investment director, says: “There is the possibility of building 180,000 homes on London rooftops.”

The penthouse will be for sale at the end of summer and renovation of the rest of the block will be under way.

Jovan Mihailovic says: “The neighbourhood will get a much more attractive building; we’ll have a better life in a more energy-efficient building with double glazing and solar panels — and the lift will work.”


  • Residents keen to exploit the potential of a block’s flat roof must acquire the freehold.
  • Pitched roofs are more difficult to work with and usually have to be removed first.
  • Adding floors to a block that’s already more than four storeys can create costly technical difficulties.
  • Local property values have to be at least £450 per square foot for the finances to stack up.
  • Alex Ingram-Hill, head of valuation and surveying at John D Wood estate agents, cautions that planning permission “is by no means guaranteed. And if the space is owned by several freeholders, trying to reach a consensus on what to do with a roof can also be tricky.”
  • Freeholders could do as Jovan and his neighbours did, and sell the space to a developer. Financing and managing the build themselves would mean higher returns but would involve outlay and expertise.


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