Dilemma "Fleecehold"

AdrianC

Flugelhorn wrote: »

We'll all different, I put quite high value in being in my own place rather than renting off someone else, I know it costs more in then end but that is how I choose to spend my money

But it's not all about money, of course.

It's also about the freedom to be flexible. Especially when you're looking at buying a place that's got a high risk of being difficult to sell on.

RelievedSheff

Flugelhorn wrote: »

Going to take that barge pole off the amazon order. Shame re some of the up to 20 year old properties as they are quite nice - reckon we are heading for another house hunt, will make sure to grill the EA on this before we view any

Not all properties under 20 years old will have a maintenance charge.

The new build we moved into in April has no maintenance charges for the estate. So don't discount them all on that basis.

GDB2222

There’s an article on the BBC
'Fleecehold': New homes hit by 'hidden costs' https://www.bbc.co.uk/news/uk-england-46279048

It seems a bit OTT, to be honest. A woman who refuses to pay £150 a year because she doesn’t think the work is good enough. A man who wishes he’d never moved - because of a charge of £400 a year. There are open spaces, and the estate needs work to maintain and improve it.

We live in a garden suburb, and we pay £150 a year to the local suburb trust for administration of the conservation area, and it seems great value to me.

OldMusicGuy

I've lived in a fleecehold house for 20 years and had lots of problems with an appalling management company (overcharging, incorrect billing, refusal to refund incorrect charges and more). The work they carried out was very poor but at the end of the day we just paid a fee which was kind of like a tax for shoddy maintenance work. It started out at around £250 per annum 20 years ago and was up to £500 per annum when we left.

However, our agreement seems to be less onerous than many. Although we could not replace the management company or form a residents management company, the annual management fee increases were capped (most seem to rise in line with inflation these days) and there was no right of repossession for unpaid fees (just penalty interest on the money owed).

Given what I experienced, I would be very wary of taking on a fleecehold property these days, especially if the agreement allowed for repossession if fees are unpaid.

It didn't prevent us selling the property recently but it probably helped that our buyers previously had a fleecehold house and were familiar with how they work. Be aware there are costs they don't tell you about when you sell - it cost us £350 for a "management pack" to allow the sale to proceed.

sal_III

GDB2222 wrote: »

There’s an article on the BBC
'Fleecehold': New homes hit by 'hidden costs' https://www.bbc.co.uk/news/uk-england-46279048

It seems a bit OTT, to be honest. A woman who refuses to pay £150 a year because she doesn’t think the work is good enough. A man who wishes he’d never moved - because of a charge of £400 a year. There are open spaces, and the estate needs work to maintain and improve it.

We live in a garden suburb, and we pay £150 a year to the local suburb trust for administration of the conservation area, and it seems great value to me.

Ignore the nonsense complainers. The major issue is not in the couple of £100s charge per year itself. The problem is the onerous terms in most cases, where you have no control over the quality of work and price charged by the management company, to the extend that in some cases they have a claim on your house if you fail/refuse to pay the fee. This is the OTT bit.

Who knows it might become the next doubling ground rent scandal with lenders refusing such properties as security, leaving you locked.

If I have a choice I wouldn't bother with one of these, if I have no say in the ManCo and costs and most definitely not if they have claim on my house.

GDB2222

It would only take a minute change to the Right To Manage legislation to sort this out. Management companies would have to be reasonable, then, whereas currently there seems to be no control or recourse whatsoever.

pinkteapot

Having moved to t'other end of the country in December last year, just wanted to give my tuppence worth on the rent vs. buy thing.

I absolutely understand the desire not to rent, even if it costs a bit more. What I would say is look at the market where you're buying carefully in terms of how quickly houses sell. Where we've moved to, hardly any houses sell quickly - even those that are priced about right compared to recent sales. There's simply very few buyers. Decent houses can still take a number of months to sell and many take more than a year. If you're buying in an area like that, it will make it hard to tie up selling and buying in the future as if you see a house you absolutely love and want, the vendor may not wait while you find a buyer.

Just something to research before making a decision. You might have done already, and your area may be very different to ours. We were very glad we were in rented when our house came up. We've been renting since December last year (with interest from our house equity paying half the rent) and we completed on our new home last week. We're spending a few weeks doing some jobs there before moving in.

AdrianC

pinkteapot wrote: »

What I would say is look at the market where you're buying carefully in terms of how quickly houses sell. Where we've moved to, hardly any houses sell quickly - even those that are priced about right compared to recent sales. There's simply very few buyers.

Whichever way round, chain sales can be... fun.

In a buyer's market, it may take a while to sell.
In a seller's market, you may not secure the place you want.

Either way, breaking the chain is helpful.

pinkteapot

p.s. And if you are buying a 2-3 year one, I'd avoid freehold with service charge. Just in case at the point you want to sell it's become a major issue but nothing's been done to fix it.

RelievedSheff

sal_III wrote: »

Ignore the nonsense complainers. The major issue is not in the couple of £100s charge per year itself. The problem is the onerous terms in most cases, where you have no control over the quality of work and price charged by the management company, to the extend that in some cases they have a claim on your house if you fail/refuse to pay the fee. This is the OTT bit.

Who knows it might become the next doubling ground rent scandal with lenders refusing such properties as security, leaving you locked.

If I have a choice I wouldn't bother with one of these, if I have no say in the ManCo and costs and most definitely not if they have claim on my house.

The latest articles about this in the news this week have been brought about because a lender has refused to lend on a property with estate management fees. So it is already becoming a bigger issue than previously and could become an even bigger problem if more lenders jump on the band wagon.

The government and other parties are all saying they are going to build more houses per year but until they sort out issues like these they don't stand a chance. Local authorities can't/won't adopt green spaces due to budget cuts, lenders won't accept management companies, so who sorts outs the green spaces that the planning departments insist are included within new developments?