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New Build Estate Charges

New Build Estate Charges and how a home survey can help 

A frequent issue we come across when dealing with home surveys for new build properties is how little awareness there is among homebuyers about ‘New Build Estate Charges’. However, if you are thinking of buying a new build home, then finding out about these additional fees, and whether you may be liable for them, is crucial.  

If you don’t, you may be sleepwalking into a binding contract that could leave you facing a hefty annual bill for unseen costs. While there is a lot of information out there about New Build Estate Charges, there is very little awareness of the problem. Homeowners usually only find out about them when it is too late. You could end up shelling out hundreds of pounds in maintenance charges for communal areas of your estate every year. And properties which are liable for these additional fees can be harder to sell. So, what are New Build Estate Charges, and how can you avoid them? 

What are New Build Estate Charges? 

New Build Estate Charges – dubbed ‘fleecehold’ by the media – arise when a new housing estate or development is built, and the local authority decides not to adopt the new area. 

This leaves the builder, developer or thirdparty management company with responsibility for the upkeep of communal spaces and roads.  The developer can pass the cost of paying for the upkeep of the land on to homeowners, who pay it on top of their Council Tax, even though the council doesnt maintain their street. 

It means buyers are contractually obliged to pay an equal share of the costs to maintain and manage their open spaces if the estate is unadopted. The charges cover the ongoing maintenance of communal areas such as roads, grass verges and playgrounds. 

These maintenance fees are currently unregulated and uncapped, meaning that in some areas, developers can hike the charges as they see fit.  Management contracts for unadopted private estates are also often sold off to speculators and property management companies.  

These companies can then pass on the costs to homeowners via a deed of transfer under the Law of Property Act 1925which obliges the homeowner to pay for maintenance of the land. 

Critics say the system is open to abuse because management companies have no obligation to keep costs down, or even provide evidence the services they charge for are being carried out. Homeowners, meanwhile, have dubbed it a stealth tax and say its frustrating because they are paying for the upkeep of privately-owned public spaces which can be used by anybody. 

If you own a leasehold property for a fixed period, you may also be charged expensive ground rent and other fees which might make your home more difficult to sell when you move. If you’re a freeholder and own the home and the land it’s built on, you’ll still have to pay annual fees on top of your mortgage, Council Tax and other household bills.  

How can you avoid these extra costs?

If you are already in a situation where you are paying New Build Estate Charges, unfortunately, there may be little you can do. Chances are you are subject to a binding contract between the developers and their maintenance company which leaves you liable to the charges. However, if you are thinking of buying a new build property, then getting a valuation done beforehand is essential. It will ensure you are aware of any potential fees you may be liable for should you wish to proceed – and allow you to negotiate a better deal with the seller.  

How can GB Home Surveys help?

At GB Home Surveys, we can help you avoid any nasty surprises that come when you buy a new build property. We offer a different approach to getting a home survey that’s thorough, convenient and hassle-free. It will provide you with all the information you need to make the right choices.  

We’re an independent, RICS regulated chartered surveyors and have been providing trusted services for almost 30 years. Our surveyors are all RICS registered valuers and have vast local expertise and knowledge, so you can be sure you’re getting the best advice to help you buy with confidence. 

So, if you are interested in buying a new build property and want to ensure there are no nasty surprises lurking around the corner once youve signed the contract, then give us a call. 

We can do all the research and legwork to let you know whether the home you are buying is on unadopted land, so you can make the choice that’s right for you. 

For a free initial consultation and a no-obligation quote, give our friendly team a call today to discuss your requirements.   

 

Looking for a quote, or maybe you have a question? Get in touch today.

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