Estate Service Charge

DCFC79

As its a new estate then in theory nothing major ( as in road surfacing) should need doing, maybe the cutting of any buses or trees on the green area. Im in the same position, I'll give it a few years and will consider moving to an estate that isnt new.

Doodlebugs

We bought a new build and pay a service charge, I think that’s pretty standard for all new developments now? It hasn’t gone up in the 6 years we’ve lived here and we’ve had no issues so far. Possibly because some of the residents are part of the management company. 

A friend bought on a bigger development, I think the council must have adopted the roads and taken over the maintenance of her area at some point as she didn’t have to pay her service charge after a few years. 

Not all new builds are bad. 

Slithery

DCFC79 said:
...maybe the cutting of any buses...

Sounds expensive to me

holmc

Thank you for all of your comments, everyone! Much appreciated! 

ArthurS

I’m in this situation now! I have just found a house I want to buy. Reserved the plot (new build development site) and engaged the solicitors - so already a fair few hundred pounds paid - and now I’m getting concerned about this estate charge. Can any reputable solicitor actually recommend to a client that they should proceed with the purchase if the risks stated by everyone in this forum (and that I have thought of myself) are apparent? And why is it only some new build devs that don’t have their land adopted by the council yet another right next door does and their residents don’t pay any fee? I have engaged the solicitors now but the big question is, am I making a fuss about nothing or should I jump (also very aware there are basically no houses on the market at the moment!)

ArthurS

ArthurS said:

I’m in this situation now! I have just found a house I want to buy. Reserved the plot (new build development site) and engaged the solicitors - so already a fair few hundred pounds paid - and now I’m getting concerned about this estate charge. Can any reputable solicitor actually recommend to a client that they should proceed with the purchase if the risks stated by everyone in this forum (and that I have thought of myself) are apparent? And why is it only some new build devs that don’t have their land adopted by the council yet another right next door does and their residents don’t pay any fee? I have engaged the solicitors now but the big question is, am I making a fuss about nothing or should I jump (also very aware there are basically no houses on the market at the moment!)

Additionally - could you risk not being able to remortgage? If your charges become extortionate, you won’t find any buyer, therefore making the property ultimately value-less. If that’s the case a mortgage provider won’t provide any loan for a remortgage etc and you’re stuck with a property that is worth nothing and a massive bill for estate charges…

Is there any sort of clause or specific wording that can be encouraged or considered to make this more desirable when purchasing?

AFF8879

You don’t really have much of a choice if you want a new build (and in some markets right now like where I am in Hampshire, new builds are the only option as anything decent is sold before you get a chance to even open the link from the alert email!)

The key is to try and get one with a management company where the residents are directors.

Noneforit999

Par for the course with new build estates these days.

You are paying for general upkeep of the estate itself so cutting of verges, upkeep of kids play areas, electric for the lighting etc etc. Reality is the local Councils don't want these costs so the developer farms them out to a management company.

We have one and our bills didn't start until year 3 as the developer was still building. 

Year 3 was about £175
Year 7 (this year) is £280

Its increased but not by a huge amount.

To be fair, the estate looks nice still. They cut the grasses fairly regularly over the summer, all the lights work and nothing needs doing.

When you get the bill, over 50% of the breakdown of costs will be admin so fees for the staff, postage, insurances etc. Less than 50% will be actual costs of maintenance. 

Our deeds have a covenant in them which states we have to obtain permission from the management company to make changes so every time we remortgage we have to get a certificate from them which ads about £280 to the costs. We are about to sell ours too and we have to buy a management pack for the new owners which is about £500 too. 

Its largely money for old rope but ultimately nobody wants the responsibility to manage the common areas for an estate with 100 properties. Our road was actually adopted by the Council a few years back leaving only 50% of the estate roads for the management company but the costs have certainly not gone down.

ArthurS

Thanks all - keep the advice and experiences coming - the more the better! 
I just find it odd that if we have to pay an additional charge for maintenance of land the council doesn’t own, why do we not get a reduction in council tax? Otherwise we’re essentially paying for other estates to have their roads and lighting maintained and not our own!

I’m interested to know if anyone has had any experience of an estate charge when something has gone wrong - for example a burst drain? Fallen trees on telephone wire? Etc? Is there a large one off fee asked of the residents? Does your yearly fee sky rocket to accommodate similar future issues?

diggingdude

ArthurS said:

Thanks all - keep the advice and experiences coming - the more the better! 
I just find it odd that if we have to pay an additional charge for maintenance of land the council doesn’t own, why do we not get a reduction in council tax? Otherwise we’re essentially paying for other estates to have their roads and lighting maintained and not our own!

I’m interested to know if anyone has had any experience of an estate charge when something has gone wrong - for example a burst drain? Fallen trees on telephone wire? Etc? Is there a large one off fee asked of the residents? Does your yearly fee sky rocket to accommodate similar future issues?

The time to mention that is when politicians come knocking on your door for your vote. Ask them why you are subsiding people who live in other areas and watch them lie as they promise change.

In all seriousness though this is the future. We will all be paying more to support services we don't use