Imagine buying a new-build freehold home. You find a place you like, pay your deposit, and then right before you exchange contracts you are lumped with a bill for £800 a year.
This is not a bill from your council but from the owner of the estate on which your home has been built. You owe them this money for the upkeep of the roads, street lighting, sewage system and green spaces. You cannot challenge the annual charge, and there are no caps on how much the estate owner can increase it. The council has no legal obligation to provide these services instead, but it will still charge you the same council tax as anyone else in your property’s price band.
It sounds a lot like the so-called ‘leasehold trap’, where property owners are subject to ever-increasing ground rent and service charges. But it isn’t. Instead, it is something known as an estate management charge (EMC).