Freehold house with maintenance charge

ONEONEONE

Hello, 

Looking to buy a freehold house, relatively new - around 6 years old.

The house is situated on a small private road and there is a charge for the upkeep of the road and 2 v small grass verges. The road itself is more of a drive, there are 5 houses altogether and I would say no more than 75m long road. I have spent a long time trying to get the service charge info out of the estate agents, I think I finally have the truth: in that the 'communal' land is owned by the developers (small local company) -so a small strip of road and v small grass verges. The charge is £550 per house for the year, there is no recourse to challenge the costs, the developer as a management company is written into the deeds so no ability to change company, the wording does state though that costs should be 'reasonable', there doesn't seem to be anything regarding the company taking possession of the property should a charge not be paid but I don't have full access to deeds so not 100% sure on that. I know the price has recently gone up - in that is was around £440 until last year - so quite a jump in terms of %. 

I'm feeling on edge about this property, I really love it and it is of excellent build quality but I don't like that I have no control over costs or of the company in charge ever. I did ask around and neighbours seem to be relatively chill about the charge as well as service. I don't mind paying something as someone has to upkeep the area -but worried about protection going forward and compared to other estate charges I have read about £550 is on the high-side, thinking forward to 5-10 years time if i needed to sell the cost could go up to a point where prospective sellers feel uncomfortable. I know in the end this is my decision to make and level of risk I am willing to bear, I guess looking to get opinions about how sensible going for this property is in the long-run. 

Thanks so much in advance all  

princeofpounds

Doesn't sound great value for money. 

£550 at a mortgage rate of 2% is equivalent to the interest on an extra £27.5k of capital value.

AdrianC

ONEONEONE said:

I'm feeling on edge about this property, I really love it and it is of excellent build quality but I don't like that I have no control over costs or of the company in charge ever.

Then don't buy this property.

This one has an estate management charge, because it's on an unadopted road on an estate with common areas. Somebody has to pay to maintain those.

If you don't want that, then buy one that's on an adopted road, and doesn't have estate common areas.

ONEONEONE

AdrianC said:

ONEONEONE said:

I'm feeling on edge about this property, I really love it and it is of excellent build quality but I don't like that I have no control over costs or of the company in charge ever.

Then don't buy this property.

This one has an estate management charge, because it's on an unadopted road on an estate with common areas. Somebody has to pay to maintain those.

If you don't want that, then buy one that's on an adopted road, and doesn't have estate common areas.

Thanks, I agree someone has to pay and am happy to do so, I'm just concerned that I am offered little to no legal protection in the terms of the contract 

AdrianC

ONEONEONE said:

AdrianC said:

ONEONEONE said:

I'm feeling on edge about this property, I really love it and it is of excellent build quality but I don't like that I have no control over costs or of the company in charge ever.

Then don't buy this property.

This one has an estate management charge, because it's on an unadopted road on an estate with common areas. Somebody has to pay to maintain those.

If you don't want that, then buy one that's on an adopted road, and doesn't have estate common areas.

Thanks, I agree someone has to pay and am happy to do so, I'm just concerned that I am offered little to no legal protection in the terms of the contract 

But they're the terms applicable to this property.
Buy this property with them, or buy a different property with different terms.

mistrihelen

It would give me pause.

We fell in love with a semi-detached freehold house with a maintenance charge. It was attached to other houses/flats with communal parking and a few grass verges. The management company for a long term had been a group of residents, but has since passed to some sort of management group. However as it wasn't the developer we were still prepared to look at it.

The house was really in an amazing location and fairly unique, so we did want to buy it. In the end our offer wasn't accepted.

So I'm not totally against houses with these charges, but it is definitely a factor to weigh up and I would compare it against what else is out there.

ONEONEONE

princeofpounds said:

Doesn't sound great value for money. 

£550 at a mortgage rate of 2% is equivalent to the interest on an extra £27.5k of capital value.

Thanks, I do agree it's on the pricey side for this type of service, especially considering the relatively small area of upkeep and expect charges will creep up 

eddddy

It might be useful to find out what the £550 is actually being spent on.


For example, is it going into a sinking fund for resurfacing the road every 10 years, to keep the road looking nice?


If you bought a house with a 'nice' private drive (for example) on an adopted road, might you want to resurface the drive every 10 years, at a cost of £5k? If so, the overall costs might be similar.




I guess you could say that all houses have maintenance/repair costs every year - but in this case, £550 of those costs is spent via a 3rd party. I guess it's a case of whether you get good value for money from that 3rd party.

TrickyDicky101

Where we live we share a private drive with 4 other properties (shared length is approx 40 metres) and we are all equally responsible for the upkeep and R&M but there is no annual charge and no management company.  In 30 years of this house being built as far as I am aware nothings has been spent in maintenance of this drive.  It still looks fine.  There is a hedge that borders the drive and which is also included in the upkeep/R&M terms which my wife cuts (and doesn't charge anyone for).  To me £550 per year per house sounds exorbitant.

ONEONEONE

TrickyDicky101 said:

Where we live we share a private drive with 4 other properties (shared length is approx 40 metres) and we are all equally responsible for the upkeep and R&M but there is no annual charge and no management company.  In 30 years of this house being built as far as I am aware nothings has been spent in maintenance of this drive.  It still looks fine.  There is a hedge that borders the drive and which is also included in the upkeep/R&M terms which my wife cuts (and doesn't charge anyone for).  To me £550 per year per house sounds exorbitant.

It's where I'm leaning, happy to pay to maintain the very small verges and contribute towards a sinking fund but 550 a year is pretty steep 

ONEONEONE

eddddy said:

It might be useful to find out what the £550 is actually being spent on.


For example, is it going into a sinking fund for resurfacing the road every 10 years, to keep the road looking nice?


If you bought a house with a 'nice' private drive (for example) on an adopted road, might you want to resurface the drive every 10 years, at a cost of £5k? If so, the overall costs might be similar.




I guess you could say that all houses have maintenance/repair costs every year - but in this case, £550 of those costs is spent via a 3rd party. I guess it's a case of whether you get good value for money from that 3rd party.

Will check out the sinking fund as happy to contribute towards that, I guess when you factor in the other properties paying the 550 a year there should be def enough left over to re-tarmac and then some