Anyone else now avoiding freehold houses with estate management charges?

[ScaredSceptic]

We're looking to move and the only house we've seen so far that ticked all our boxes in our search area was a newish build (8 yrs old). The estate agent's details briefly mentioned a charge of £20 per month for "grass cutting". The estate looked neat and tidy and well managed, so £20 a month seemed reasonable, albeit annoying on top of the Band E council tax.

However when we made further enquiries it turned out the charge was in fact more like £35 a month, having gone up considerably since the property was built. A copy of the management company accounts showed that of the total bill split between all the houses on the estate, half of it was "management fees". Thousands of pounds just going to this company to do very little (the roads have been adopted, the management company is responsible for only some communal grassed areas).

I then did more research and found that there is no cap on how much these charges can be increased by each year and no recourse for residents to challenge it. We decided we weren't prepared to take this on so walked away.

I'm glad we did as there now appears to be more and more publicity around these "fleecehold" schemes - articles in the press, and government consultations on reducing the prevalence of these arrangements and on increasing the rights of homeowners already subject to them. This will hopefully yield positive benefits eventually, but my concern is that anyone owning one of these homes (and I know there are a lot, as it's virtually all new build estates now), may find it affects saleability and or value. If measures are put in place to stop this practice, why would anyone want to take on a property which is already tied in to such additional fees on top of council tax?

It is very limiting though, as it rules out a lot of properties, as the area we are looking has a lot of new estates.

I just wonder if we are being unusually cautious, or whether others are also now wary of these schemes?

Well yes of course, I mean who else would pay for communal areas if not the homeowners of the block? I thought you meant inside houses!

🤣 Id love someone to come and change my lightbulbs

Absolutely 100% avoid. A friend sold recently at a loss because of the fees and the fees to sell (for management packs and other nonsense) were more than the solicitors and moving costs added together!

Not true. Many councils hate them and want to take over management of them. However the developers deliberately build the roads to non adoptable standard and so councils can't adopt them without significant remedial work that councils can't justify paying for and management companies won't pay for.

Our house is about 30 years old, on a small estate of 16 properties, eight on each of two access roads.
We have a residents' association which manages everything, we pay about £50 per property annually. It pays for the low level lighting in the close(s) and when necessary a bit of road surface repair, which one of the members actually does. He just bills for materials.
The accounts are showing a healthy surplus if we did need to get the professionals in. We've been there six years now and it hasn't increased at all.

I bought a house and bought the freehold. It cost me about £8k plus solicitors fees, so just under £9k.

The yearly charge was only £180 a year and hadn’t increased for 17 years but I just wanted peace of mind that the land as well as the house was mine.

We pay over £300 per annum for 60 ish houses. The roads and lighting are adopted by our council - this fee is purely for grass cutting and playground maintence! It’s ridiculous. It’s gone up from the quote of £160 when we signed five years ago. I can’t believe inflation has that much to answer for… I wouldn’t do it again.

And many are built to standard but the local council are just fuckers.

The councils could take them on if they wanted regardless. They are functional. They simply don't want anything out of the ordinary because god forbid they might have to do an actual job rather just pretend to be busy.

Councils won’t adopt roads / public open spaces when the utility companies won’t adopt the drainage / sewerage system first.

I wouldn't touch it either. Its the leasehold disaster repackaged.

I spent ages looking on Rightmove before deciding against a flat because of the problems I found out about with leasehold flats, so decided to stretch to a small freehold house but have had to temporarily stop looking as life took another turn. I had never heard of “fleecehold” until I read this thread so I wanted to say thanks OP for bringing this to my attention!

A lot of these new build houses look really nice, and are often in convenient locations…I wonder if that’s why people are still buying the houses, that and rents ever increasing.

Thanks for posting OP, we are looking to buy a new build and was totally unaware of this practice so will be checking for this before I commit to anything.

I’m currently tied into one of these contracts. I am paying council tax and a management company for services, so effectively paying twice for one service.

The management company aren’t approachable at all. They can charge whatever fee they decide and there’s zero discussion. If they do what they consider to be extra work, like cutting a tree back, you get charged extra.

There’s no way of getting out of these contracts. The contract is very cleverly designed and is tied to the deeds of your house.

It’s very poor practice but householders can’t do a thing about it. Your council likes these management companies because they do the work for the council. The council still gets full council tax from everyone on the estate and we also pay a management company.

This system has put me off ever going for another new build.

Same. Dealbreaker.

Our previous new build had a service charge. You are right to be wary as they can just up their prices so hard to know exactly what they’ll be in the future. Luckily ours were fairly cheap when we were there.
When we moved as well lots of extra paperwork and we had to apply for their management pack - we had an issue with our garage as well so lots of going back and forward about that. not a deal breaker but good to be aware of the pitfalls.

I wouldn’t buy anything with ongoing charges , never .