New build estates - why?

[Mekrel]

I was prompted to start this thread due to an article on the BBC regarding legislation to ban the sale of new leasehold properties.

There are a fair few comments from people moaning about the fact they have freehold homes, but still pay a service charge for upkeep of communal areas (and this practice needs to be stopped). Usually these are new estates where the council are not adopting the road or communal areas such as children's play areas. Some are saying "we should get a discount on our council tax".

I've never really understood the attraction to such estates?

I appreciate not every new estate is the same, but in general what I've found is
* You have a cookie cutter home
* A tiny garden, overlooked by other closely packed houses
* Pay a service charge that can spiral out of control
* Typically pay a premium (builders tax, they bank ~3 years of future house price growth)
* I understand the premium comes with a benefit of warranty, but there's stories of NHBC not being worth the paper it's written on

A friend of mine bought a house on such an estate and part of his service charge is the provision of a parking enforcement agency. What surprises me about this is the estate is literally in the middle of nowhere and each house has a big enough drive to park two cars and there's visitor parking lay-bys. I can understand if there's a train station, retail centre or offices near by and you need to discourage people using the estate as a car park.

Am I missing something here? Why don't developers just build the houses without all these landscaped areas that need maintaining? I appreciate the councils probably don't help as I believe sometimes they stipulate that retail, community and play spaces have to be included to grant the planning application.

 

[ChrisD.]

Here we go.

 

[Mekrel]

Here we go.

What makes you say that? It's a genuine question and not an antagonistic one.

It seems strange to buy freehold, but have one of the downsides of leasehold.

 

[b0rn2sk8]

Basically it comes down to local councils wanting the council tax revenue from the houses but none of the responsibility.

They make it a part of the planning process that they are or responsible for the communal spaces they require as part of the development and pass the Barton to the owners to deal with it. This isn’t a new thing but as you say, it’s a growing phenomenon and it’s an obvious was for the council to grow its revenue base but not its cost base. Job jobbed for a council who are basically broke like pretty much all of them are.

 

[sovietspybob]

Am I missing something here? Why don't developers just build the houses without all these landscaped areas that need maintaining? I appreciate the councils probably don't help as I believe sometimes they stipulate that retail, community and play spaces have to be included to grant the planning application.

Pretty sure it's because the local planning authority require it, the developers aren't doing it out of the goodness of their hearts. They'd happily just build rows of Victorian era terraced houses with concrete yards if they could get away with it..

Again with the local councils they want their cake and to eat it too, they want the extra income from council tax but non of the burden to actually maintain anything by adopting the roads or maintaining the green spaces they mandated as part of the planning approval.

 

[throwaway4372]

I've never really understood the attraction to such estates?

I would have needed £300k more to buy somewhere more established, so I ended up on this estate through lack of choice/money. Presumably it's the same reason for everyone else.

I'd advise people against new builds for all the reasons you state and then some, I could rant all day about it. I'm lucky to have a freehold house and no service charge, but other houses on the same estate do, think it varies by developer.

 

[Mekrel]

Basically it comes down to local councils wanting the council tax revenue from the houses but none of the responsibility.

They make it a part of the planning process that they are or responsible for the communal spaces they require as part of the development and pass the Barton to the owners to deal with it. This isn’t a new thing but as you say, it’s a growing phenomenon and it’s an obvious was for the council to grow its revenue base but not its cost base. Job jobbed for a council who are basically broke like pretty much all of them are.

It's strange councils are so broke considering the number of these developments. Most seem to be claiming it's due to adult social care being passed onto them from the government? I appreciate there's some individual cases such as bad investments (was it Thurrock that invested in solar farms that were essentially a scam?)

Our council's (Bucks County) state doesn't seem to add up. It's £300m in debt but becoming a Unitary council was supposed to save costs...

 

[b0rn2sk8]

It's strange councils are so broke considering the number of these developments. Most seem to be claiming it's due to adult social care being passed onto them from the government? I appreciate there's some individual cases such as bad investments (was it Thurrock that invested in solar farms that were essentially a scam?)

Our council's (Bucks County) state doesn't seem to add up. It's £300m in debt but becoming a Unitary council was supposed to save costs...

Central government used to give the council something called a ‘block grant’ but as part of the austerity measures implemented by the conservatives, this has been reduced significantly in monetary terms but councils have not lost anything they are legally required to deliver.

Hence, they are all broke, particularly in areas where there are concentrations of people needing social care. The cost of delivering social care has also ballooned.

 

[Mekrel]

I would have needed £300k more to buy somewhere more established, so I ended up on this estate through lack of choice/money. Presumably it's the same reason for everyone else.

I'd advise people against new builds for all the reasons you state and then some, I could rant all day about it. I'm lucky to have a freehold house and no service charge, but other houses on the same estate do, think it varies by developer.

Not saying you did it, but I guess HTB only being available on new builds meant people could easier access those properties and get a lower LTV as a result.

 

[throwaway4372]

Not saying you did it, but I guess HTB only being available on new builds meant people could easier access those properties and get a lower LTV as a result.

I thought HTB looked like a bit of a trap so I avoided it, but people are always talking about it so must be quite a high take-up.

 

[ChrisD.]

What makes you say that? It's a genuine question and not an antagonistic one.

It seems strange to buy freehold, but have one of the downsides of leasehold.

Because there are many reasons people buy a new build, and quite often they don’t have the choice to buy an older property. The charges are unfortunately something which is unavoidable at present the government intervene.

 

[Mekrel]

Because there are many reasons people buy a new build, and quite often they don’t have the choice to buy an older property. The charges are unfortunately something which is unavoidable at present the government intervene.

Genuine question (regarding the choice comment), but aren't older properties cheaper due to the markup on new builds? I assume HTB has finished, but do developers offer other incentives on new builds such as covering stamp duty?

 

[throwaway4372]

Genuine question (regarding the choice comment), but aren't older properties cheaper due to the markup on new builds? I assume HTB has finished, but do developers offer other incentives on new builds such as covering stamp duty?

Mine covered stamp duty and white goods and flooring, but the estate was super early so they wanted people in. I literally emptied my bank account to buy so that was the only way I could get it done.
As much as I dump on new builds it's still 100x better than the situation I was renting in. Think black mould and very ill and expensive rent and housemates getting weird with each other. It had to be done.
As I said, the older equivalent houses in more established parts of town cost way more. People know new builds are risky and would avoid them if there was genuine choice.

 

[bazzabear]

Just to make these poor people feel a bit better - I have freehold, and no service fees for the estate. But that does mean I have to maintain the grass verge which is down the side of our garden but outside the wall (and which bellends keep driving over!)

 

[ChrisD.]

Genuine question (regarding the choice comment), but aren't older properties cheaper due to the markup on new builds? I assume HTB has finished, but do developers offer other incentives on new builds such as covering stamp duty?

Developers typically offer incentives, plus there's the knowledge that buyers are covered by a 2 year developer warranty and 10 year NHBC warranty. They're typically built in areas within catchment areas to desirable schools, will have fibre broadband as standard, they're empty and ready to move in, new shiny etc.

Decent older houses in desirable areas sell within hours/days if priced well, often starting a bidding war between the buyers. New builds offer FTBs a step onto the ladder, which they can use to accumulate equity to then use to purchase something else later down the line.

 

[Mercenary Keyboard Warrior]

As said, when granting planning the councils set a number of things, the house balance (social, 2 bed 3 bed 4 bed etc) things like parking restrictions, they refuse to fully adopt but don't give a rebate for the services they aren't providing.
(IMO they should withdraw these services from all if they cannot provide to all, none are statutory duties)
Adult care and removal of the block grant are the issue, nothing else has the ability to affect materially the balance for councils.

New builds have always had a bad rep since I can remember and yet 1980s new builds are very different from todays new builds.
I have lived in houses covering just about every decade from 1890s to 2010s and there is no perfect decade of houses, they all come with their challenges and stuff that sux.

 

[Mekrel]

As said, when granting planning the councils set a number of things, the house balance (social, 2 bed 3 bed 4 bed etc) things like parking restrictions, they refuse to fully adopt but don't give a rebate for the services they aren't providing.
(IMO they should withdraw these services from all if they cannot provide to all, none are statutory duties)
Adult care and removal of the block grant are the issue, nothing else has the ability to affect materially the balance for councils.

New builds have always had a bad rep since I can remember and yet 1980s new builds are very different from todays new builds.
I have lived in houses covering just about every decade from 1890s to 2010s and there is no perfect decade of houses, they all come with their challenges and stuff that sux.

Absolutely regarding your last point. My leasehold flat was poorly built (small independent developer), the house we bought is very well built as we're only the third owners, the first owner was a builder and built the house himself (I guess with contractors he knew/trusted).

Despite that, we have come across some bodge job repairs! I noticed the boiler flow and return are the wrong way around and the engineer who came to service it pointed out it must have been installed by the second owners, as the inspection date during production was 2019 or something like that.

 

[Richie]

Why don't developers just build the houses without all these landscaped areas that need maintaining?

Would you like to live in a concrete jungle with no open green spaces which are created by said landscaped areas you mention above?

I thought HTB looked like a bit of a trap so I avoided it, but people are always talking about it so must be quite a high take-up.

Depends on where you got your HTB. I believe. in England, its a loan that requires to start being paid back after 5 years?

In Scotland, you only pay the HTB part back once you sell the house. There are no interest charges either but you do have to pay back what you owe plus the percentage increase in house value e.g.

• Buy house for £200k and £30k of that is HTB (so 15%).
• Sell house years later for £240k (so 20% increase)
• HTB ask for £36k back (their initial £30k plus the 20% increase in house price)
• If, in the unlikely event, the house devalues, that also affects the HTB amount downwards
• You can buy "tranches" of 5% if you like which effectively pays back the HTB portion and, when you sell house, you would owe less or nothing
• You dont EVER have to pay it back at all unless you sell the house or die (then its taken out of estate)

Genuine question (regarding the choice comment), but aren't older properties cheaper due to the markup on new builds?

Possibly but its an initial hit at the front end. Depending on the age of the older property, you will possibly pay more for energy on an ongoing basis and also maintenance would come around quicker on the older property compared to a brand new one e.g. new roofs, windows etc

 

[Richie]

Absolutely regarding your last point. My leasehold flat was poorly built (small independent developer), the house we bought is very well built as we're only the third owners, the first owner was a builder and built the house himself (I guess with contractors he knew/trusted).

Despite that, we have come across some bodge job repairs! I noticed the boiler flow and return are the wrong way around and the engineer who came to service it pointed out it must have been installed by the second owners, as the inspection date during production was 2019 or something like that.

But wait, you only get snags and faults in new houses. Older houses are fault free, amirite?

 

[Mekrel]

Would you like to live in a concrete jungle with no open green spaces which are created by said landscaped areas you mention above?

Well the answer would be no, hence why I don't live in a city and I live in the Chiltern AONB.

However, I don't see how these landscaped areas are that beneficial? There's so many houses in one area, with the layout being optimised for # of properties, that you're surrounded by other houses more than greenery.

I don't see housing estates that are saying 30 years old with landscaped open spaces or children's parks in the middle of them. Perhaps councils are forcing these new estates to have mini parks in them as local ones become saturated as population grows.