New housing developments are springing up across the country, and Bishop Auckland constituency is no exception. Anyone buying a new home has come to expect the process to be stressful and expensive – from paying conveyancing fees to navigating the mortgage application process and organising the move itself. It is thought that once the furniture is assembled and the boxes are unpacked, the stressful time is finally over and you can start to enjoy your new home.
That is, until the bill for estate maintenance lands on the doormat.
Watch Helen present her Ten Minute Rule Bill in Parliament:
What are estate fees?
Estate fees, also known as service charges, management charges, rent charges, or maintenance fees, are now a common feature of many private housing developments. They are included in the small print of transfer deeds on many freehold properties, although many residents don’t know they exist until a bill arrives.
The communal green spaces on the site, including things like grass verges and shrubbery areas, are retained by the developer instead of being adopted by the local authority. Property companies then either charge residents directly, or sell on the contract to a property management company who collect these fees.
Much like the spiralling Grounds Rents scam which affected leaseholders, estate charges on freehold properties are being used as the latest cash cow by unscrupulous property companies.
There are no precise figures on the number of households affected, but it is easy to estimate the scale of the problem. In 2017 alone, there were 133,280 new build dwellings completed by private companies. A significant proportion of these homes will have been constructed by major housebuilders on large private developments where buyers are charged these fees. Over the last five, or even ten years, this practice has spread unchecked amongst developers – leading to problems for homeowners on a massive scale.
While estates do need to be maintained, the fees demanded of homeowners are completely disproportionate to the services provided – if indeed they are provided at all. Fees vary according to the location, developer, and management company, but are usually in the region of £100-£220 per household, per year. When collected from every household in a development – say 150 homes, each paying £170 – this produces a yearly income for the property company of £25,500 from just one estate. This is in exchange for irregular grass cutting, the removal of dead trees (which are often not replaced), postage, and the company’s bank fees.
I have had reports from constituents that if they cannot pay, or refuse payment in response to inadequate service, the management company initiate legal action, including sending bailiffs and threatening repossession of the property.
This micro-industry is completely unregulated: homeowners do not have access to a dispute resolution ombudsman, they cannot choose their service provider, and there is no cap on fees. Consequently, people are finding themselves trapped on a poorly maintained estate with escalating yearly fees – with no way to hold those responsible to account.
This practice has to stop.
I will present a Ten Minute Rule Bill in the House of Commons, calling for an end to these unfair, exploitative fees. I have been working with homeowners across the constituency, and the national campaign group Home Owners Rights Network (HorNet) to develop this bill.
The Freehold Properties (Management Charges and Shared Facilities) Bill will be presented after Prime Minister’s Questions on Wednesday 14th November. The Bill will include measures to regulate the fees charged to residents, ensure shared facilities are of an adequate standard, and make provision for the self-management of communal areas by residents if they wish to take this route.
Over 30 Members of Parliament, from different political parties, have already agreed to support this bill.
How can you get involved?
If you live in Bishop Auckland Constituency:
If you own a freehold property on a new build development in the Bishop Auckland Constituency, and would like to share your experiences with unfair estate fees, please get in touch by letter, email or phone. It would be very useful to include any relevant documents and photographs.