What is a 'Fleecehold' House

maton91

Hello all,

On another thread I am buying a hosue that has an annual grounds maintenance charge of around £60 a year. I understand this is for the upkeep of greenery, roads etc... and everyone on the estate pays it

I have recently heard the term 'fleecehold' which seems to be where one owns a freehold property but still pays additional charges to the developer

Is my future arrangement not classed as fleecehold and if so why not please?

Thanks in advance

hidden_sacrifice

Fleecehold isn’t an actual term. But new build developments sell freehold houses but have a maintenance charge so people think they’re getting fleeced. I personally don’t see an issue. We’ve offered on a freehold property with an annual charge but the way I see it is if I lived in an older house, I’d be pretty peed off if my council tax kept going up every time a new build development went up as it’s more areas to maintain. 

daivid

'fleecehold' is where the property is leasehold, with a lease that can be raised greatly in future (costing the homeowner a lot and potentially making the property unsellable).

Maintenance charges are very different but you will still want to consider potential future costs e.g. how much might you have to pay if… ..the roads all need resurfacing/whatever other potential large costs apply to the estate 

Hedgepigs

hidden_sacrifice said:

Fleecehold isn’t an actual term. But new build developments sell freehold houses but have a maintenance charge so people think they’re getting fleeced. I personally don’t see an issue. We’ve offered on a freehold property with an annual charge but the way I see it is if I lived in an older house, I’d be pretty peed off if my council tax kept going up every time a new build development went up as it’s more areas to maintain. 

But are you not peed off that your council tax is paying for the upkeep of the older properties streets? 😉

Neil49

We live on such a development and the funds go to a grounds maintenance company, not the developers. 

Yes, it's an additional cost but the grounds are maintained all year, more frequently in the summer with regular mowing etc, and they repair /replace fixtures and shrubs etc as required. I can't see our local council doing that and certainly not to the standard we get. 

You also have someone you can contact and complain to if necessary. We have meetings with the company and also a Facebook group to discuss any issues. Try doing that with your local council. 

hidden_sacrifice

Hedgepigs said:

hidden_sacrifice said:

Fleecehold isn’t an actual term. But new build developments sell freehold houses but have a maintenance charge so people think they’re getting fleeced. I personally don’t see an issue. We’ve offered on a freehold property with an annual charge but the way I see it is if I lived in an older house, I’d be pretty peed off if my council tax kept going up every time a new build development went up as it’s more areas to maintain. 

But are you not peed off that your council tax is paying for the upkeep of the older properties streets? 😉

No because I still have to drive on those main roads that need maintaining. I still take my kids to those parks, require emergency services, my bins being collected, etc. council tax covers far more than just the maintenance of the street you live on

Hedgepigs

hidden_sacrifice said:

Hedgepigs said:

hidden_sacrifice said:

Fleecehold isn’t an actual term. But new build developments sell freehold houses but have a maintenance charge so people think they’re getting fleeced. I personally don’t see an issue. We’ve offered on a freehold property with an annual charge but the way I see it is if I lived in an older house, I’d be pretty peed off if my council tax kept going up every time a new build development went up as it’s more areas to maintain. 

But are you not peed off that your council tax is paying for the upkeep of the older properties streets? 😉

No because I still have to drive on those main roads that need maintaining. I still take my kids to those parks, require emergency services, my bins being collected, etc. council tax covers far more than just the maintenance of the street you live on

Well exactly. So new developments shouldn't really equate to council tax increases for existing properties, just because the council adopts them.

Anyway, I'm not saying  it's right or wrong, just playing devils advocate! I can see how some may see it as 'unfair'. But as Neil49 said, you are hopefully getting a better service for that premium. I guess a lot comes down to the actual management company as to how reasonable or not it is.

eidand

"fleecehold" is a term used for properties on new build estates which come with unregulated and unlimited fees. Some even have terms that they can repossess the property if you don't pay. you can't change the colour or your front door or if you want to alter anything you have to pay the builder a fee. Stuff like that happened a lot in the past, but I haven't been checking lately.

In the view of many, a freehold property is not one where you have to pay someone else for changes and certainly no one can take it away because you haven't paid their extortionate fees. That's how fleecehold was born

Johnnyh123

I find it complete madness that people defend it.  When a new build estate is set up the council are getting the tax income without the expense.  The expense is being passed on to the consumer.  It’s another example of rip off Britain.  The fact that these charges are basically unregulated should be setting alarm bells off for people but there seems to be a bit of Stockholm syndrome kicking in.  In about 20-30 years (or maybe less) there’s going to be a “scandal” on the level of cladding where there’s thousands of unadopted roads falling into disrepair that bin lorries etc refuse to go down and require residents to fork out thousands to fix which is what your council tax goes towards. These houses will become unsellable.  It’s all foreseeable big it’s essentially another stealth tax these governments we’ve had for decades get away with passing on to people unfairly.

eidand

These things are well documented so if anyone still falls for these things ... well, it's on them.
The builders wouldn't do this if no one bought those houses. I have zero sympathy for anyone caught in this trap.

Section62

Hedgepigs said:

Well exactly. So new developments shouldn't really equate to council tax increases for existing properties, just because the council adopts them.

Johnnyh123 said:

I find it complete madness that people defend it.  When a new build estate is set up the council are getting the tax income without the expense.  The expense is being passed on to the consumer.  It’s another example of rip off Britain.  The fact that these charges are basically unregulated should be setting alarm bells off for people but there seems to be a bit of Stockholm syndrome kicking in.  In about 20-30 years (or maybe less) there’s going to be a “scandal” on the level of cladding where there’s thousands of unadopted roads falling into disrepair that bin lorries etc refuse to go down and require residents to fork out thousands to fix which is what your council tax goes towards. These houses will become unsellable.  It’s all foreseeable big it’s essentially another stealth tax these governments we’ve had for decades get away with passing on to people unfairly.

It makes sense to me.

There are two distinct cost elements for public realm features in newbuild developments.  They are the capital cost and the revenue (maintenance) cost.

Historically local authorities adopted roads and communal spaces, but they had to be designed to the LA's standards and typically the developer would make a lump sum "commuted" payment representing 'x' years of maintenance costs.

The effect of that was twofold - the developers would pass the additional costs on to housebuyers, and typically the development was provided with the bare minimum of low-maintenance facilities.

Development has changed in the last couple of decades, such that people expect to live in nicer 'places'.  The cost of providing and maintaining those enhanced places is greater than the historic versions.  So from a 'fairness' point of view, the people living in nicer places with all these enhancements should be contributing more to the cost than the bare council tax.  (* 'nicer' and 'enhanced' are subjective, and we could discuss that for pages).

So, the outcome is developers no longer build to adoptable standards (and so don't need to pass on as much capital cost + get more dwellings per unit area) and the general public don't have to pick up the maintenance cost of shoddily built public realm.