Justice for all residents on privately managed estates.
Entitled “The Potholes and Pitfalls of Life on an Unadopted Road” this article is about the modern managed private estates with some case studies of the difficulties home owners face. Home Owners Rights is promoted and the petition we support to make adoption of estates compulsory.
Please support all estate home owners by signing this government petition. We only need a few hundred more signatures for the government to respond….
Home owners are subsidising infrastructure provision in their local authority area. How?
Section 106 of the Town and Country planning act allows developers to contribute to local infrastructure where planning permission would otherwise have to be refused. The original intention was to facilitate development of more new homes and provide road improvements, school places, affordable homes and leisure facilities for the new population. In recent years local planners have been using section 106 to provide more and more local infrastructure, arguably not always of direct benefit to the development under question. It is being used almost as legalised bribery to extract as much cash as possible from the big house builders.
It is acknowledged that the commercial house builders are driven by profit and shareholder value, so they are going to do everything they can to retain their profit margins including:
Home buyers on these estates are therefore purchasing a sub standard home on a sub standard estate and pay unregulated estate charges – effectively a private tax. There is no doubt that future saleability and value of these homes will be affected.
For leasehold houses with high ground rents and doubling clauses, the homes are unsaleable right now.
A HorNet member has researched the topic, and if you are interested, there are links in this document to articles about section 106 use and its damaging effects: S106 Articles Links
The bottom line is that we, the new home buyers, are getting a raw deal as a direct result of the way local planners are utilising section 106.
We think this diagram broadly represents the relationships between different tenures and charges on new build managed estates.
It is easy to see how central to the whole system estate charges are. Permission fees are common, but not always present.
The diagram graphically illustrates how residents with the least resources (in leasehold flats) end up having to pay more in terms of running costs. A bit like that cheap ink jet printer where the ink costs almost as much as the device. How much has Help to Buy contributed to this exploitative situation?
Leasehold houses on these developments may not be simply about lucrative deals selling on the freeholds and high and doubling ground rent, it is also easier to retain control over the estate, particularly when a property is sold on. The obligation to pay estate and permission charges automatically is transferred to the new owner, this does not happen with positive covenants for freehold houses, so less reliable conveyancing devices are used, like estate rent charges, or a chain of covenants.
“Leasehold to fleecehold” It is also clear to see how, if a leasehold house owner buys their “freehold”, they remain in the fleecehold trap. Many leaseholders are reporting this via our friends at the National Leasehold Campaign.
