Has anyone recently bought a house on a new build estate and been told there'll be an annual service charge for upkeep?
We're looking at a new place - but was informed there is an annual charge of £275 to a management company. The agent was quite vague in what that covers, but she seemed to suggest it was for the road through the estate, common green areas and something to do with a pumping station (guessing that's for grey water or sewage).
Is this quite a high charge or about right for something like this?
Alarm bells would be ringing for me if the roads in the estate were likely to remain unadopted by the local authority. The problem with shared management charges for this kind of service is that they can go up substantially over time, and are likely to make the home harder to sell in future.
The same applies to sewerage/pumping stations, but more so in my opinion.
http://www.new-home-blog.co.uk/why-are-private-roads-so-common-on-new-housing-developments/
There's been a few articles in the Guardian recently which might be worth a read
https://www.theguardian.com/business/2016/nov/29/government-promises-to-stamp-out-abuses-of-new-build-ground-rent-scandal
You can usually only serve five dwellings from a private road.
Is the property freehold?
In Scotland so maybe not the same, but we paid a fortune for faculties management and they were shite. The council adopted the roads after 3 years..BUT the grass verges remained a good scam for the chosen landscape company as long as I was there.
Has anyone recently bought a house on a new build estate and been told there'll be an annual service charge for upkeep?
We live in a newish estate, annual charge is £110, that covers maintaining landscaping in communal areas, upkeep of playpark, annual inspections, etc.
Mostly gardening I would expect. You want to get a detailed budget. FYI I had a new build flat where the management company paid the developer a £3k "fee" (our money) for managing the handover, total rip off. I wouos check the road, you want that to be adopted. Also I lived in a small development of 9 houses and we owned the land / road, we paid about £500 a year mostly gardening and tree work with about £200 for a reserve fund for the road.
We moved three years ago and have a similar type of charge. It pays for grass cutting, bush trimming (fnarr), maintenance of common areas, a couple of small playparks and, strangely enough, street lighting. It's currently about £150 pa but it does seem to vary according to house size/type.
The folk doing the work seem to be on the ball and the place is well looked after.
That's a normal charge.
Pay it forget about it
See if any of it is offset in your council tax / utilities - if you're paying for sewerage pumping does that mean you're rebated an amount for sewerage in your other bills. I pay a lower rate of council tax (water and sewerage are bundled in the council tax bill north of the border) because we're on a septic tank.... which I don't pay anything for either 🙂
That's a normal charge.Pay it forget about it
A normal charge for what? If it's covering unadopted roads and any aspect of sewerage, it could be a major headache for the OP unless it's capped at RPI and there's no other small print about one-off costs of fixing stuff.
At the very least, I'd be going over the paperwork with a toothcomb to make sure there are no surprises in future.
It's also worth bearing in mind that private roads do not have to be built to the same specification as public ones, the streetlighting doesn't have to meet standards, it won't necessarily get gritted and it's worth checking whether it will be put on the route for local authority bin collections.
It's a normal charge for an upadopted highway, be thankful they didn't just sign it over to the residents to deal with as they please.
There is structure in place, if the OP want's further detail he's gonna need to query this with the person billing him.
The charge is relative to the location, the frequency and their management fee.
Unless you have significant support you'll be paying it.
how big is the development?
I live in one of 15 houses, the charge is £450/year at the moment, but its self-managed, so we're only spending ~£100 a year at the moment, building up a nest egg so when the road needs doing there's cash there for it.
I don't think any new build estates have their roads adopted any more, this is completely standard
Phone You and Yours. Radio 4, right now!
Yep, moved in to a new estate earlier this year and have this in place, from memory it's approx £100 for the year.
I was very dubious at the time as I hadn't heard of it outside of flats/apartments with communal areas and the like, but after doing some research it seems very common these days so we sucked it up.
Our is ex-MOD housing sold off in the late 90s.
Estate Management Fee is £250ish per year. Went up a few years ago to build up some cash reserves but came back down.
At least the grass verges are looked after and the shared areas get tidied up. Handed the water pumping station over to local water authority finally so the nightmare of pump replacement because someone is flushing disposable nappies again has stopped.
Street lights are a pain to get bulbs changed but don't know if council would be any quicker.
Overall living here for 15 years it's been OK, the odd passive aggressive letter for dog walkers and people who's hedges don't quite look standard stopped when one of the estate reps moved house.
Management Company seem to charge a fortune to swap transfer the fee to the new owner when a house gets sold.
Roads have been patched up a couple of times, keep trying to get them taken on by local authority but they've requested a complete resurface before they'll consider it which would cost a fortune.
Not a terrible experience other than paying the fee feels a bit like retro banking, they still have cheque as an option.
My mate had to pay £1000's when the pumping station serving his estate required renewal. No warning, just a bill for several K towards it. He was not a happy bunny, even less so was his neighbour whose house flooded when the newly refurbished pump was overwhelmed about a year later.
Similar situation to Gary_m, we moved into a new build 4 years ago, annual charge of £120 to maintain open green spaces, hedges, playground equipment, etc, roads will eventually be adopted (they're still building parts of the estate, it's big). Our deeds / conveyance lists the annual amounts and what it's for, they were fixed for first 4 years then rise by a set % every 5 years or so. Bit of an irritation that we pay council tax on top, as if we'd bought on an older estate the council would be maintaining, but we all just suck it up.
Licence to steal from you, however, the Property Factors Scotland Act 2011 and the Homeowners Housing Panel can help you if they try to act outwith their remit. There may be something similar in England and Wales.
I successfully took mine to tribunal fwiw.
Check what the pumps are needed for. Sewage or former flood area. Are new ones replaced at your future cost.
New builds my arse.
Personal opinion.
I run a ground maintenance firm and I do contracts on housing estates in Scotland. I, for one, wouldn't buy a property with factor fees, as there will always be extra bills and that feeling of something being outwith your control.
Almost all new estates now are not adopted by the council and will have factor fees forever. I believe the councils do usually take over sewers and the like, though I'm not sure what's normal regards street lighting.
My usual role is to pick up litter, keep all grass and shrub areas neat and spray monoblock with moss and weed treatments.
A typical range of prices per property for ground maintenance alone is £10-40 a quarter.
My mate had to pay £1000's when the pumping station serving his estate required renewal. No warning, just a bill for several K towards it. He was not a happy bunny, even less so was his neighbour whose house flooded when the newly refurbished pump was overwhelmed about a year later.
Sound familiar, that's why we had to build up cash reserves as £1000s of funds went in call out and new pumps.
Thanks for all the replies.
How do I find out if the road will be adopted in the future? It looks like a fairly standard road - not brick weaved etc, and I've been told the council trash lorries will be coming down for the fortnightly collection.
I emailed the agent and asked if there was something in place for calculating the fees - and was just told they'll be reviewed annually. Which makes me nervous, as someone said, the fees are out of my control and someone could just come knocking for thousands.
after doing some research it seems very common these days so we sucked it up.
Yup, a new estate near us has exactly this deal.
They're paying for upkeep of roads, a large area of maintained park, an access track and all their own roads. (All remain un-adopted.) Public have access to all of these areas under the S106 agreement.
Personally I think they're crazy to accept it, and it will cause upset in future as the residents start to realize they're paying for stuff everyone else is using.
What happens is a few residents refuse to pay in future? Will the other residents have to sue their neighbors?
Also, I've been told who the managing agent will be - Chamonix Estates - they receive less than favourable reviews. But I guess no managing agents reviewed when they're doing a good job!
How do I find out if the road will be adopted in the future?
I don't think they will be ever unless policy changes.
It used to be that if there were more than 8 houses the Council would tend to adopt. That seems to have gone out of the window now, I guess because money is tight and if they can collect Council Tax without maintaining your road, why wouldn't they?
We pay about £300 p.a. for ours I think.
It's for the communal parking areas and green-spaces. It feels like a bit of a rip off as it is calculated on how many parking spaces you have on the leasehold communal car park. We have one space and a garage, but get charged for 2 spaces. The cheeky buggers haven't cleaned up inside my garage - ever! And we have no grass in our communal car-park where as other bits of the estate do. It's an outrage...
It has proved it's worth with anti-social 'social' neighbours. Any dumped crap or graffiti and they deal with it. They also have all the contact details for all the landlords and seem to be able to use the right legal threats to make annoying things stop happening once notified.
We recently changed something and now the company reports to a governing body made up of community minded residents, so all's good. Other than my garage...
Suggest the OP reads the Guardian article linked above by Stu. Essential to check there is no ground rent charges with huge rises built in. Perhaps not such an issue if it is definitely just for maintenance but if it was me I'd like to see it in black and white before signing anything. Who is getting paid - can the householders control it?
In one case reported by the Guardian, a buyer of a £101,000 flat in Dudley built in 2010 by Taylor Wimpey found that his wife’s ground rent was set to spiral to £8,000 a year. He said the couple were now trapped in an apartment they could no longer sell because the ground rent review clause in the lease was preventing lenders approving a mortgage.
IF youve got a van or a pet check the lease before you move in, as some leases refuse large vans and pets. Ask the council if theyre adopting the road, or if its already adopted
Yeh, second what others have raised, you need to get them to spell out to you how the rate will go up in the future as it can escalate rapidly and make selling it a nightmare
Housing in the UK appears to be increasingly some kind of feudal scam - benefiting only the landowners, builders and banks...
Leasehold flats for a start - FT ran a piece on leasehold recently which described it as medieval law (which it is)... you never actually own anything, not the land, nor the building...
Then you get situations where managing agents overcharge and fail to deliver but when the leaseholders successfully sue them, the costs get added back into their management fees.
Def read the articles in The Guardian re the scams going on with increasing ground rents - which sounds an awful lot like extortion, but totally legal because the landowners have successfully prevented proper reform of property law...
There's also now new build houses being sold only as leasehold... (houses, not flats...)
Or leases which get sold on and gently increased over the years...
I have to admit I'd never heard of new build estates coming with management charges - sounds like another way for developers/landowners to rinse us of our post-tax pay to me...
Brits are uniquely insane about property - we've been conditioned into handing over vast amounts of our hard-earned to developers, banks and landowners and feel happy about doing it cos our homes are our castles...
5th from bottom in the EU for outright owned, no mortgage remaining... all that debt and we still have one of the lowest rates of ownership in the EU!
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]Eurostat data...[/url]
OP - there's a very good reason why the agent was being vague about it!... she's hoping like hell you don't ask too many 'difficult' questions before you sign...
I have often wondered, who buys a leasehold?They all seem to be advertised at around market value too. I really don't get it.
who buys a leasehold?
People who can't afford anything else generally... which is increasingly everyone who hasn't already bought
Buy To Letters - they're only interesting in making money
Every Londoner who earns less than £100k. Seriously - pretty much impossible to find a 2-bed flat under £400k or 1-bed flat under £350k now - in tattier parts of SE London even a small 2-bed terrace house is now £500k+
Median London income is c£35k...
The only experience of leasehold I have is that they were't cheap. That's kind of my point. It's not owning, so why would someone who wants to own just sign a long lease for lots of money?
Why leasehold for houses though? The estate I'm on is privately owned houses built in early 1970s. The roads etc are all adopted by the council. No ground rent, no maintenance charges.
There are a few small areas of common land where hedges need trimmed. We do it ourselves.
The road has not needed re-surfaced since 1972 and still looks good for years. Roads built to a good standard and more importantly only carrying light access traffic with no HGVs can last years.
I can't remember the figure but basically most road damage on trunk roads is caused by HGVs as road damage increases by (I think) the cube of axle load. So there is no reason for a council not to adopt well built roads. They take the council tax so they should take on the usual responsibilities.
For example, the heaviest HGV axle does
over 150,000 times more damage than a typical car axle.
The leasehold on my house is for 999 years as the local Lord used to own most of Huddersfield. I get to buy the freehold in 18 months though. 🙂 My yearly rent charge is £2.50.
I have no idea why anyone buys a new house. The pride in building a quality house seems to have diassaprared a long time ago, built with no design flair to the cheapest price they can manage and sold via lies and deceit for the highest price to the biggest sucker. They can't even resist taking more money after you've bought it, as this thread shows.
Thanks all, but this is for a freehold property - not leasehold.
I emailed them yesterday to ask who is explicitly responsible for paying for any road repairs, or repairs to the pumping station. I got a reply this morning that this would have to be raised whilst going through the process of reserving the house via my solicitors.
They also won't email me digital copies of the plan showing areas which the managing agent will be responsible for.
All this is making me very nervous.
If they won't tell you what are they hiding?
I'd be tempted to write back stating without this information you will not be proceeding further. They will not want to lose a sale
I got a reply this morning that this would have to be raised whilst going through the process of reserving the house via my solicitors.They also won't email me digital copies of the plan showing areas which the managing agent will be responsible for.
Seriously? - so you have to shell out for a solicitor just to find out in exactly which way (or not) you are being stitched up?
It's certainly an eye opener - even an older house with a few problems to sort out sounds like less hassle than this.
I wouldn't go any further without more details.
A lot of people won't be as inquisitive as you (although they should be) which is what they might be banking on.
As per the above - I would want to know exactly what the service charge covers and in particular would want to know what aspects of the sewerage and roads are to be adopted. I would be quite surprised if foul sewerage is not to be adopted but surface water drainage can slightly more often be left for private maintenance - especially if it includes 'sustainable drainage' elements such as swales, soakaweays etc that water companies often won't take on. I wouldn't want to have unadopted access roads.
You should be able to get an idea about highways from the planning authority. It might even be confirmed somewhere in the planning correspondence for the scheme which will be available on the council's planning website. Look for the highway authority response.
They want you to get a solicitor because it cists you cash you are less likely to back out at that point, a solicitor will no doubt tell you it is standard so you are less likely to be spooked by a odd clause.A solicitor will also want the transaction to go through so will be unlikely to advise a poor clause as opposed to an actively bad one and a solicors insurance will take the hit for any foul up.
Personally I would be very sceptical. Bare in mind when you come to sell on your future purchaser may be someone like me .
As above, don't just walk away but run away.
Alarm bells should be going off at this point, what scummy sales tactics
As above, don't brush this off as being okay. We were in a flat on an unadopted road, and the fee was at first £250/yr. Don't have figures to hand but it was much more by the time we left (only 4 yrs later) and they were trying to force through uber expensive repairs to the woefully designed cycle storage and parking at our expense also.
It also caused us serious arse ache when we tried to sell up.
They really are bumholes and I would never buy new build again.
Definitely ask to see any documents. These are meant to inventory what they plan to do with your money.
The development we're on has a £100/year charge for groundwork. We moved in 18 months ago & so far we haven't received a single bill for this. Our neighbours, who didn't buy their house off the site developers, had incredible problems getting information from the management company via the vendor's solicitors. Our docs make no mention of possible changes in charges, yet.
New build purchase here. It's for maintenance of all non adopted private areas communal spaces playing fields play parks etc.
Ours also has a quarry face that may need maintenance. Ours is a capped scheme. We pay approx 300pa. Well worth it for where I get to live...
Oh and ours is freehold and our individual property is calculated and the cost apportion shown to us in a breakdown and paid 6 monthly
Capped for how long though? £300 won't go far in twenty years time for example.
Genuine question; if you want to live in a nicely landscaped estate with play areas etc, who do you think should pay for the upkeep and maintenance - the local council? I know of many horror stories of this type of work being passed over in the priority list.
I guess I see it not much different to what happens in communal stairwells. Maybe that's an Edinburgh/Scotland thing though.
OK bit more clarity after I went down there and spoke in person.
There are no real 'landscaped areas' to maintain - no parks, play areas etc, it's all housing and peoples gardens. There's a bit of old woodland out the back - but most of this seems to be for the roads, pavements, lights, parking, sewerage, pumping stations etc. The council aren't going to be taking any of it on. It's all under the managing agent.
We'd essentially be financially responsible for everything on the development. Also the fee is just an initial estimate at the moment, it could go up after the site is complete.
Wow. Considering many buyers man not be so inquisitive that is a stitch up and a half
Developers probably won't give a toss. People buy new-builds like STW forum members buy T5's.I'd be tempted to write back stating without this information you will not be proceeding further. They will not want to lose a sale
[img]We'd essentially be financially responsible for everything on the development. Also the fee is just an initial estimate at the moment, it could go up after the site is complete.
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Also the fee is just an initial estimate at the moment, it could go up after the site is complete.
Also known as a licence to print money from a captive audience! I don't see any incentive there for the landowner to control costs...
Harry Enfield has it right "I saw you coming..."
We badly need to change our attitude to property - we justify overspending on it to a massive amount for some insane reason, and then wonder how we've ended up in debt crisis... and public services are massively underfunded cos there's not enough taxpayer cash to pay for them
[quote=glasgowdan ]
A typical range of prices per property for ground maintenance alone is £10-40 a quarter.
Interesting Dan. Our factor charges us £351 a quarter for the gardening services. All they do is mow a couple of small areas of grass and there are a couple of small areas of soil with plants but they're non-flowering and haven't grown much so I haven't seen any noticeable work done on them in 10 years.
It's an absolute ****ing scam
There's a bit of old woodland out the back - but most of this seems to be for the roads, pavements, lights, parking, sewerage, pumping stations etc. The council aren't going to be taking any of it on. It's all under the managing agent.
Not a chance I'd be buying a property if I could be liable for the repair of that lot! Some expensive infrastructure there.
People buy new-builds like STW forum members buy T5's.
nice work. 🙂
I would echo others -
- you have no control over these fees
- you have no choice but to pay them
- the fees will only go up
- this will make the house more difficult to sell in the future
That said -
- will the road and street lights be adopted by the council? That could be a considerable expense. I think that so long as the infrastructure is built to standard they will take it on. And if it's not to a good standard ... how long will it last?
- if you are paying for part of the water infrastructure - will you see any reduction in your water bill?
We found another development in the next village along. Same house, same builders, different plot. This one also has a managing agent - but the main differences are the road is planned to be adopted by the council and there are no pumping stations (just a single sub station).
So from what I can tell the annual fee will only be for maintaining the communal green areas, as there is a park in the development, and a few shared brick weaved drives.
Am I silly for considering this, or should I walk away?
I'd still be very wary of anything with a managing agent... it's still open to abuse and ever-increasing costs. And how 'planned' is the adoption by the council - a salesperson's invention to get you to buy or a firm commitment by the council...
Are older houses on adopted estates really not an option?
The Scottish Government operate a property factor register which all factors are obliged to be on. No registration = no business. There is a fit and proper test and they have to provide an annual return listing the properties they factor. My first port of call would be to check that the mgt company are registered and then if you feel you are being treated unfairly make a complaint. If they aren't on the register then they can be fined.
Do you really own your home? Not if you’re a leaseholder
A good summary of the rip-offs going on with new build/leasehold
[url= https://www.ft.com/content/d284bf04-e472-11e6-8405-9e5580d6e5fb ]Financial times[/url]
If the link doesn't work - cut and paste the first line of my post into your browser
Land Registry numbers tell us that thousands of houses are now being sold on long leaseholds as well.If you are one of the buyers of one of those houses, perhaps one who spent years saving enough a deposit to move out of the rental market, I wonder if you are what you think you are. You see, you aren’t actually a homeowner. You are still a tenant. You have the right to occupy the property for 99 years, 125 years or perhaps even 999 years. But the building itself and — crucially — the land on which it sits, remain the property of the freeholder.
But think about the ground rent and you will a clue as to why developers are so keen on leaseholds — and why some have even been selling perfectly ordinary three-bed newbuild houses (rather than flats) on absurd 999 year leaseholds instead of freeholds (although salesmen like to call them “virtual freeholds”). As buying agent Henry Pryor points out, there is “no genuine reason” for this.
Greenbelt? If so, be very careful...those that don't pay cause issues which then affect the whole estate i.e. no work done.
The seller will tell you virtually nothing about the annual charge and what it covers, they should mention the charge, but when pressed you'll get very little detail.
You don't need to pay but the agent will come after you. After a long and stressful period of time, if they don't make money they will stop servicing the estate. If the council hasn't adopted the road and green space then the agent owns these and can fence them off (local to me has a kids park fenced off and up for sale...cheap!).
in tattier parts of SE London even a small 2-bed terrace house is now £500k+
Median London income is c£35k...
Other parts of the country are available in which to live.
a kids park fenced off and up for sale...cheap!
Buy it then.
I'm tempted...the area of land would be a superb chunk of land for a house...would need to get planning permission to build a house, but it is tempting.
Except, the land is owned by the agent and they are selling it to get back at a number of residents who didn't pay the factor fees as the factors (agent) wasn't doing their work...went to court, unearthed a huge amount of other disgruntled areas with similar issues and the agent lost the case...so they have now withdrawn any work and are looking to sell off the land...
Factoring fees are a royal pita.
