Barratt Homes Extra Charges for Freeholders

outragedchris

Has anyone bought a Barratts Home within the last 10 years and then found that there are many extra charges that you can be hit with? If you pay maintenance charges for your estate, must you pay to get permission to make charges to your home, even if it is Freehold? Must you also pay for permission to change your mortgage? These charges can be over £250 each time, even for a satellite dish. I would be interested to chat to anyone in a similar situation.
You may not know about these charges as many on our development did not. During the first 5 years, permission is granted free by the developer. After 5 years you can be charged by the maintenance company. It is a whole new ballgame for "FREEHOLDERS".

Richard_Webster

The point about maintenance charges is separate from whether a builder can charge for consents for works.

It is quite normal for a builder to impose restrictive covenants requiring his consent to alterations to the building etc.

Some builders only require this for the first so many years - in other cases it goes on forever. After a good number of years the builder may not exist or may not be interested any longer, but the covenants are still there and if you do work in contravention of such a covenant you take a risk. Neighbpours often haver a theoretical right to enforce such covennats, but do not often =do so because of the cost involbved - they prefer to try to get planning permission refused.

princeofpounds

I think it is fair to point this out. Many people don't realise that things have changed here, and assume freehold properties are charge-free.


This is partly happening because developers are getting 'cleverer' and partly because it is worth so much more to develop ongoing earnings streams in a low interest rate environment. If capitalised at 5%, every £1000 p.a. of income is worth £20k to the builder when sold to a management company. Very few buyers have the understanding to incorporate such things into their decisions.


Of course the builders would say that it is a method to ensure freeholders pay towards the upkeep of the area, which is true, but it's certainly not the only motivation!

fashionvictim

outragedchris wrote: »

Must you also pay for permission to change your mortgage? These charges can be over £250 each time, even for a satellite dish.

I'm leasehold now and there is no need to get permission to change your mortgage. Everything else needs permission yes.

Are you saying this is the case on your development or asking people if this happens ?

bclark

We live in a freehold house on a new build estate and have to pay management fees.

At first it was pretty bad as they were quite expensive for no good reason so we had the management company replaced with a better one, still not perfect though.

We only pay £200 a year now and we don't have to pay for permission to remortgage or anything else though.

Things like charges for extensions are a different thing altogether as that's the covenant placed on the land which is a different thing from the management company. The only thing we have to do is pay £100 to the developer for permission to extend but when my neighbour contacted them to do this they weren't interested and told him to keep his money!

Chanes

Yes, we were looking at a Barratt house and when they started talking service charges on a freehold with other restrictions, we walked away. I'm sure there are fair reasons but I expect freehold to be free from service charges. I know that may not be accurate but it is what I would want from a freehold property. I know it sounds paranoid but I always remember reading about service charges being used as a mechanism to force people out of some flats, they just kept raising them. Maybe the law has changed but they said they had to keep raising them because people were moving out!

Senior_Paper_Monitor

The majority of 'new builds' we see now have fees (often considerable) and covenants involved affecting freehold houses.

Pete9501

Senior_Paper_Monitor wrote: »

The majority of 'new builds' we see now have fees (often considerable) and covenants involved affecting freehold houses.

Plus if the council don't adopt roads and street lighting then there are big bills due in years to come so a sinking fund is needed. Just escaped from this nonsense and have no intention of being caught again with £2400 pa charges on a free hold house.

davidmcn

fashionvictim wrote: »

I'm leasehold now and there is no need to get permission to change your mortgage. Everything else needs permission yes.

Are you saying this is the case on your development or asking people if this happens ?

I doubt it happens (or is even competent), but what's more likely is that a new lender will want a borrower to sort out any lack of consents etc when remortgaging, so it becomes "we have to pay Barratt to take out our new mortgage".

Richard_Webster

I don't think that builders make money out of the service charges as such. They have to go through the business of setting up a management company for the development usually because the planners have required it to be laid out in a way that leaves areas that need to be maintained and which the Council will not take over as part of the highway.

It is true that these companies often are in turn managed by some large property management company that makes large admin charges for answering queries etc.

martinsurrey

princeofpounds wrote: »

I think it is fair to point this out. Many people don't realise that things have changed here, and assume freehold properties are charge-free.


This is partly happening because developers are getting 'cleverer' and partly because it is worth so much more to develop ongoing earnings streams in a low interest rate environment. If capitalised at 5%, every £1000 p.a. of income is worth £20k to the builder when sold to a management company. Very few buyers have the understanding to incorporate such things into their decisions.


Of course the builders would say that it is a method to ensure freeholders pay towards the upkeep of the area, which is true, but it's certainly not the only motivation!

I can guarantee it is the only motivation, the management company is there purely to manage the communal areas. If the residents don't like the managers, they can go self manage, or appoint anyone they like (after a vote), so its impossible for the developer to sell it, in fact its a massive pain for the developer, they would much rather it be like the old days.

The only revenue stream worth anything is ground rent, and there is none on freeholds.

The maintenance charges are not sold by the developer, they are to fund the costs which in the past would have been paid by the council after they had adopted all of the open spaces (which is getting MUCH harder to do)

Pete9501 wrote: »

Plus if the council don't adopt roads and street lighting then there are big bills due in years to come so a sinking fund is needed. Just escaped from this nonsense and have no intention of being caught again with £2400 pa charges on a free hold house.

Richard_Webster wrote: »

I don't think that builders make money out of the service charges as such. They have to go through the business of setting up a management company for the development usually because the planners have required it to be laid out in a way that leaves areas that need to be maintained and which the Council will not take over as part of the highway.

It is true that these companies often are in turn managed by some large property management company that makes large admin charges for answering queries etc.

these.