With its eclectic fusion of Regency and mythological motifs, Havona House stands out amid the stucco-fronted Victorian townhouses in Notting Hill’s Pembridge Villas. The newly built mansion’s mock neoclassical columns and the limestone carvings of Greek deities on the facade reflect the roots of its owner, property investor Costas Diamantopoulos. Stepping inside the 8,600 sq ft (800 sq m) property, which is on the market for £25m, you are confronted by an array of opulent features, including a free-floating stone staircase, hand-blown glass pendants and marble en-suite bathrooms.

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The basement conversions at Havona House includes a Turkish bath, a cinema and a 70ft swimming pool that turns in to a dancefloor. Photograph: Sarah Lee/The Guardian

But the most extraordinary parts of this substantial home, just a short walk from bustling Portobello Road market, lie below ground in a double-level basement, which cost £4m to build. On its first floor is an underground garage, in which up to three cars can be parked via robotic platforms. On the lower floor is a 70ft swimming pool, which is filled by a waterfall that cascades over mirrored panels, with a cinema screen to the left. Mango onyx marble panels line the right-hand wall, with a Turkish bath, sauna, shower and a gym further on the other side. At the far end is a £30,000 plaster sculpture of four dancing figures, based on a painting by Poussin. The artwork also hints at the room’s special feature: at the push of a button, hidden hydraulic legs raise the ceramic-tiled floor to transform the space into a dancefloor. “In four to five minutes you can go from having a pool to a huge area of entertainment,” says Diamantopoulos.

The excavated basement conversion at Havona House, Pembridge Villas, which has one of the largest excavated basement conversions in London. Photograph: Sarah Lee/The Guardian

This is the second basement development Diamantopoulos has built in London in 10 years. He oversaw a much smaller one in 2008 under his former home in Cheyne Place, opposite the Chelsea Physic Garden, although it, too, has a pool, cinema screen, gym and sauna. This property is also for sale, for a comparatively modest £12m, under the terms of Diamantopoulos’s divorce settlement. But he says his family regularly congregated in the basement when it was their main residence. He would swim in the oval blue-tiled pool, inspired by his childhood memories of the Greek islands, making use of the wave machine, or relax in the sauna, while his older daughter and her friends would use the gym. “If someone has the space and the ability, I would always recommend a basement,” he says.

A basement development in Cheyne Place, Chelsea, featuring an oval blue-tiled pool inspired by the Greek islands. Photograph: James Baily/Barnes Private Office

As decadent as they may seem, the features of Diamantopoulos’s basements are typical of many of those built under central London’s most exclusive neighbourhoods in the past decade, according to a new study by Newcastle University’s global urban research unit. The report, Mapping Subterranean London: the Hidden Geography of Residential Basement Developments, found at least 4,650 basements were granted planning permission in Kensington and Chelsea, Westminster, Hammersmith and Fulham, Haringey, Camden, Islington and Wandsworth between 2008 and 2017. According to their planning applications, these schemes boast at least 376 swimming pools, 456 cinemas, 996 gyms, 381 wine stores and cellars, 340 games and recreation rooms, 241 saunas or steam rooms, 115 staff quarters, including bedrooms for nannies and au pairs, 65 garages, 40 libraries, two gun stores, a car museum, a banquet hall and an artificial beach.

The sauna and steam room at Havona House, Pembridge Villas. Photograph: Sarah Lee/The Guardian

Roger Burrows, professor of cities at Newcastle University and one of the basements study’s authors, says its findings illustrate the impact of the global super-rich on the UK housing market. The number of UK-based ultra-high-net-worth individuals (UHNWIs) – those with investable assets of at least £21m – has increased by 28% over the past decade, according to estate agents Knight Frank, with the vast bulk – around 4,900 – based in London. After the 2008 financial crash, Burrows notes, prime London property became a popular investment for the international wealthy, as seen in the growing number of luxury tower blocks lining the Thames. At the same time, he says, ultra-rich overseas buyers seeking substantial properties in central London have pushed out “old money” and affluent professionals into lower-income areas, leading to a widespread crisis in housing affordability. “In the last 10 years, we’ve had this very visible change to London’s property market, with all the high rises going up,” Burrows says. “But the replacement of the nearly and merely wealthy by the uber-wealthy isn’t as physically present because a lot of it has been happening underground. These basements are an architectural marker of the transnational elite moving in to London either to live or as an investment.”

The vast amount of extra space built under prime London properties contrasts starkly with the shrinking size of newly built homes bought by average families. For example, living rooms are nearly a third smaller than equivalent homes built in the 1970s, falling from 268 sq ft in the 1970s to 184 sq ft in a house built since 2010, according to another recent study. Burrows says: “One cannot but be struck by how the amount of living space different households have available to them differs now. In our research we have come across some basement developments in central London where just the pool, gym and cinema combined are larger than the newbuild rabbit-hutch homes that many people have to put up with.”

Nowhere is this more evident than in Kensington and Chelsea, the capital’s richest borough, which has the highest number of large and mega-basements, often two or more storeys deep and extended under the garden. Beth Holroyd, co-author of the study, says variations in the scale and sumptuousness of basements reveal the wealth gap between London’s merely rich, such as corporate lawyers and accountants, and the global super-rich, including bankers and oligarchs. Holroyd says: “There is a clear pattern of association between the level of neighbourhood affluence and both the size and extravagance of the basements. The pool is a clear marker of wealth.”

On Tregunter Road, in the Boltons conservation area of Chelsea renowned for its Italianate Victorian housing, the researchers found 22 approved basements, with features including 12 swimming pools and five cinemas. Five of these basements are standard-sized, 11 are classified as large and six as mega. One of the mega-basements, with a pool, gym and car lift, is in an 8,000 sq ft townhouse on the market for £26m. Four of the basements are currently under construction. Outside one, a huge red crane lowers building materials into the rear garden, under which, planning documents suggest, a two-storey basement with a pool, cinema, gym, wine store, steam room, salon and staff room is being created. Another two-storey basement with almost identical features is being excavated under a house across the street.

“I can see that from my garden,” says local resident Shirley, who lives round the corner on the Boltons, gesturing at the crane with her walking stick. “We’ve had something like that or worse going on for years. We’ve had incredible noise and vibrations. I’m sure there have been momentary gaps. Our feeling is it’s too extreme. Very wealthy people buy them hoping to get the price rise and do them up and sell them and the next person does the same. Only a few of them are here all the time.”

Alistair Langhorne and Claire Bunten, directors of LAB Architects, have been designing basements in the Boltons conservation area since 2008. On a tour of the area, Langhorne says that even here most of their clients want a basement to enhance their family life, rather than for property speculation – although Bunten admits that the budgets for some schemes were “otherworldly”. “They’ve all probably got homes elsewhere in the world but this is their main residence,” adds Langhorne.

A basement conversion in Fulham, south-west London. Photograph: Hogarth Architects

Their first basements in the neighbourhood included a 15-metre deep one for a film director’s home, with a swimming pool, sauna, gym and car lift. “There’s a glass lift through the middle of the staircase that goes down to the basement [and] arrives at the deep end of the pool,” says Langhorne. The pair say their early designs favoured slick, minimal finishes, with stone and glass, often contrasting with the decor of the period homes above. They eschew “naff” cinemas with reclining seats and cup holders in favour of media rooms with bespoke furniture and hidden screens.

But Bunten says some of their later designs became more attuned to their clients’ international luxury lifestyles. For example, one project for a Turkish family on Tregunter Road involved a complete house renovation, including a basement with a swimming pool, gym, sauna and nanny’s room. “It’s beautifully finished. When [the clients are] in that upper echelon, they’re influenced a lot by new hotels and by travel, so they have a broader set of cultural references.”

Conservatory basement development at Cheyne Place. Photograph: James Baily/Barnes Private Office

The basement boom began in the late 1990s in Hammersmith and Fulham and Wandsworth, according to architects and developers, with middle-class families renovating their Victorian coal cellars. Excavations became more substantial as planning constraints made building above ground in central London extremely difficult, while, from 2010 onwards, stamp duty rises on property purchases over £1m made the costs of moving prohibitive, forcing owners to expand downwards. Only 23 of the basements the Newcastle researchers identified in these boroughs have pools – compared with 224 in Westminster and Kensington and Chelsea – and the vast majority are standard-sized – one storey under the footprint of the house.

Architect Ian Hogarth, whose own west London basement was featured in an episode of Channel 4’s Grand Designs, says most of the basements he has designed are in Hammersmith and Fulham. “They’re working families, they’re not oligarchs,” he says. “OK, they are people who generally work in the City or in corporate law – we’re not doing a basement for teachers or a lecturer – what I would call the normal London wealthy. They’re not people with outrageous luxury lifestyles. I guess most of the country would laugh if you say they’re struggling, but they are trying to pay for the nursery; in order to keep both parents working they have to take a nanny, and the nanny becomes someone they have to house within their home. [Basements are] not necessities. They’re aspirations for a family in a certain stratum.”

Yet, as the Newcastle University study notes, super-rich investors soon caught on to how significantly a basement could increase the value of a property. “At the other end of the spectrum are the people who do it purely for commercial gain,” says architect Mike Wiseman, partner at the Basement Design Studio, who has worked on more than 2,000 basement applications since 1996. “We’ve had properties up near Regent’s Park where it’s already a big detached mansion with a garden and they want a basement underneath on two levels that is adding another 10,000 square feet. And when that person calls you, they’re asking: ‘What do you think I should put in it?’ They don’t need it! They certainly don’t want the space. Maybe the [main] property’s worth £2,000 per square foot, and the basement maybe £1,500 or even £1,000 per square foot. But because I can build that for £500 per square foot, there’s a simple commercial decision there. I’m not a fan of those particularly.”

Steve Graham, author of Vertical, which explores how high-rise and subterranean living has become increasingly luxurious, says it is ironic that basements became investment schemes for the super-rich. He says: “Throughout human history basements have been dank spaces associated with poverty and disease, which the most desperate people would be forced to inhabit. Basement developments represent a reversal of [this] because of this super-concentration of wealth in London, aspiring for the trappings of a super-luxury lifestyle.”

A huge basement development in west London, which includes a dancefloor and DJ booth, cinema and carp pond. Photograph: Sarah Lee/The Guardian

There are signs, though, that this trend may be in decline, partly owing to the post-Brexit fall in property prices in prime London, but mainly because several central-London boroughs have introduced more stringent planning rules governing basement developments. Kensington and Chelsea’s revised basement policy of 2015 restricts basements to a single storey, extending to no more than 50% of the garden. Westminster council followed suit in 2016. Bunten believes the demand for basements will continue, but she says owners are becoming more discerning about how they fit them out. “There’s less of ‘here’s a checklist’ or ‘we need a pool because that’s what next door has got’,” she says. “It’s more about ‘what we need’. It’s less speculative. Pre-recession, there was this uplift in value from extra square footage that meant you were just printing money and that has changed.”

But Burrows believes that mega-basements will continue. “There will always be a few uber-wealthy types who seem immune to the vicissitudes of the economy, politics and local planning policies,” he says. “They always seem to find ways of getting around restrictions to build their luxury pools, galleries, cinemas or virtual reality golf courses. There may be fewer of those really massive basements now, but the trend is not finished yet.”