Go new build or keep searching old build?

[Qqbank01]

Hi all, apologies for the long paragraph.

We are a family of 3 with a 6yo, currently renting a 2 bedroom terraced house, we have double bedrooms but very small kitchen/dining area which i am not satisfied.
I work locally so i can walk to office, my partner take care of kid and they can also walk to school, our house is close to market which is very convenient for groceries shopping.
Our kid is going a a good primary school, but only 1 good secondary school around, we like the environment around us and seems good for everyone.

We are looking for a 2-3 bedrooms house to buy, we can only afford 2 bedrooms small house in our current area (most of the property within our budget will need big redo or leasehold) so we walk to the other town to look for a new build.

They are going to release some 3 bedrooms semi house which fit most of our requirements and budget (freehold, nice kitchen, bigger living room and one more room for study/wfh, good school catchment), and of course there are negative side (quite far away from store/school, need to buy another car for commute, another expense)
But the most important thing is I feel worried about the management charge will be an issue. Developer said the management fee will be reviewed in line with RPI ever 3 years, it looks like a fleecehold?
We are looking for a longer stay and no intent to move away unless job/school situation changed.

I was thinking l should give up on the new build due to the above issue, and waiting for the other 2 bedrooms property coming up in our area? I can’t see any sign of price decrease in our area and it seems going unrealistic.

I wouldn't buy a new build because of all the problems you hear about, I would rather keep looking for a freehold property.

Don't get the management charge confused with leasehold, they are two entirely separate things.

We're buying a lovely new build, it's freehold.

We have a separate management charge of £75 a year for the upkeep of the wild pond area.

I wouldn't buy a new build with any sort of management fees attached. My friend lives on a private unadopted road and her Dh and another woman manage the estate fees but there's is just 20 houses. It pays for their street lighting but also maintaining the communal green space they have. They control it unlike when the management is retained by the builder. There are very few legal rights for people who enter into a management fee situation.

You might want to have a read of thishoa.org.uk/2016/11/problems-facing-freeholders-new-developments/

I would keep looking.

We've been in a new build for 4 years now.

The management fee has only risen by a small amount. It pays for upkeep of the roads on the estate and gardening of common areas.

It's completely normal and reasonable to rise by RPI every 3 years - otherwise how would they continue to be able to pay the gardeners in 20 years time when wages will have (hopefully) risen if you're still paying the same as 20 years previously?

Like a PP said - this is a management fee, not a leasehold...the amount we pay is very reasonable for what we get.

It honestly doesn't bother me. And the management is almost never retained by the builder - they handover to professional management companies.

We get a (very!) detailed breakdown every year of what our fee goes to and the gardeners are here practically every month mowing the common grassed areas.

It could do either way. Our management fee was always pretty reasonable and just used for cutting grass, maintaining trees and a very small play park.It's a development of around 40 houses.

But we have a friend who's been stung. It's a development that's mixed flats and houses. And the maintenance for the flats is split among everyone, so every few years they get a big bill for painting the outside of the flats and the internal hallways.

It isn't just the management charge which I agree with others may just not be an issue, it is the quality of come new builds that is dreadful. Depending on the builder, search Facebook groups but for example there have been FB groups on Persimmon with pictures of some of the work and my heart could break for the owners who just spend years trying to get them fixed....but some have brickwork that frankly I could do better on

There is an estate near us built by a "quality" builder which is a joke. Local landscaping companies are racking it in replacing all the paving and patios that have sunk. Plus floors that are all cracking by moving in day etc.....

Do your research very thoroughly

Thank you for your comment which is very useful.

It is Barratt new build and there will be flat and house in the same estate, the sales lady send me a surveyor report including name of management company and fee details, i will go back and ask for the spilt of cost between flat and house.
One of my neighbours just brought a house from there but still in progress, so I don’t have a chance to see the actual house.

I understand management fee is common in new build nowadays and used to maintain green space and small park inside (same as the sales lady said), 9x per year is reasonable for us but still have a concern, especially we are looking for long run.

Recently there was a 2 bedrooms house for sale in our area, but it is smaller then ours and small kitchen, it is a leasehold and i have tried to contact the developer for the ground rent details, they are charging the similar amount as the new build per year and have a chance to buy back to freehold (with huge amount), but can’t get the details of increase%, so i give up on viewing for this.

I wouldn't touch a Barratt new build with a barge pole. Give me an old house every time.

You need to understand what contract you are entering into. And how much the management fee will cost today and what it covers.

In a old estate the green areas will be maintained on a voluntary basis by residents and sometimes by the LA so you have no legal cost obligation.

With a freehold and a contractual obligation for "maintance" you are taking on a unknown debt.
Is it mix of freehold and leasehold properties.
What happens to big ticket items like lifts, fire safety equipment, painting etc in the apartment buildings.
What is listed as under the agreement, is there any limit on what can be charged for, who has the right to add in extra costs, what is the objection appeals process. If owners get to vote whats the housing ratio, because high density housing will have more votes.

When the developers leave the site, the residents form a committee and decide upon the management company, so there’s a shared responsibility for the maintenance of green spaces, play parks and facilities. The local authority will take over responsibility for roads, pavements, street lighting etc, when the developers leave the site.

I would never buy a new build, let alone one on an estate. Almost any older house will be better as long as it is freehold.

The only shared responsibility is one which is legally agreed.

The LA are under no obligation to accept land or infrastructure from a developer or any landowner. Even if the transfer is agreed in principle the LA can refuse to take charge of it for any number of reasons.

If the land has not been transferred and has play areas and equipment, individual homeowners would be foolish to risk their personal financial security by taking responsibility for property they can't get public liability insurance for.