Merton council has moved to impose limits on basement extensions, with five proposals submitted on New Year's Eve alone, as rising numbers of homeowners dig down.

Wimbledon Village is at the centre of the "digdowns" trend, with 12 applications granted in the past three months and 18 further under consideration.

Underground extensions have become popular as owners attempt to boost their home's value without expanding the property's footprint.

John Keeble, associate director of Hamptons International, Wimbledon, said: "This has been a growing trend in the last five years due to the increase in value of property in the village. A lot of people are paying about £500 per square ft for basement extensions."

In response to the growing number of applications, the council is introducing its first planning policy dedicated to basements, expected to be active by spring.

The new policy rules out extensions under listed buildings, where they will cause loss, damage or long term threat to trees and limits their area to exceeding no more than 50 per cent of either the front, rear or side garden of the property.

Applicants for significant basement extensions will have to pay experts to assess impacts on drainage, flooding, ground water conditions and structural stability before submitting plans.

Developments will also have to demonstrate they meet carbon reduction requirements.

The policy shift comes after Kensington & Chelsea council announced similar restrictions on basement extensions, following neighbours' concerns about noise disruption and structural damage to their homes.

Sue Cooke, chairwoman of Parkside Residents Association, said: "Most new builds and renovations include a basement extension.

"The council needs to ensure the work is done properly and with the least risk of damage to neighbouring properties and the local environment. The proliferation of this type of application could be setting up lots more problems for the future as other boroughs like Kensington & Chelsea have found out."

Some residents in St Mary's Road, Wimbledon, a hotbed for basement excavations, say they have already experienced structural damage from excavations.

One resident, who did not want to be named, said: "There are water streams in this area which have been re-routed by basement excavations. The last six months have been an absolute joke. We've had water coming from below and from above so every time it rains outside it rains in our kitchen."

Simon Pole, principal of Pole Structural Engineers, Wimbledon, said: "Basement excavations are not something to undertake lightly but if done professionally there is no reason why they can't go well."

Mr Pole, who has surveyed several Wimbledon homes planning underground extensions, recommended getting advice from architects and chartered surveyors with local knowledge of the area before digging down.

Homeowners' proposals for basement extensions have become increasingly ambitious, with designs for cinemas, media rooms, gyms, wine cellars and walk-in wardrobes all featuring in recent planning applications.

Councillor Andrew Judge, cabinet member for environment, sustainability and regeneration, said: "Concerns expressed about basement extensions often relate to the disturbance during construction and the potential impact on the structural integrity of the neighbouring properties.

"In Merton, we also receive concerns over the potential loss of rainwater soakaway, drainage, trees and biodiversity from back gardens.

"The council's new policy is designed to protect the environment and neighbours' interests from the impact of basement extensions."