There has been a lot of noise in the press recently about estate management charges, most recently following Matthew Pennycook’s motion in the House of Commons and the comments made by Justin Madders during that same debate.
Justin Madders stated that almost every new development “adopts the same exploitative model” and asked why homeowners are “paying twice” – once through their council tax and again through a management fee. He also suggested that first-time buyers are sometimes agreeing to “unspecified sums to unspecified recipients” for as long as they remain in their home, and that local authorities should simply stop permitting this model through the planning process.
Matthew Pennycook, meanwhile, acknowledged that private estate management arrangements are now widespread because councils are no longer routinely adopting new roads, lighting, open spaces, and amenities, which is a shift he referred to as the rise of “fleecehold.” He also highlighted that government will be consulting on this area.
These are very serious statements, and we can understand why they’ve created anxiety. If you hear a politician say you are being exploited, it’s natural to feel concerned or suspicious.
But there is a huge amount of information that is missing from the conversation. Estate charges are not there because agents are pocketing money or charging for services that have already been paid for. They exist because councils are increasingly not adopting areas within new developments. If the council will not take responsibility for roads, drains, lighting, green spaces, or playparks, then someone has to maintain them.
And that “someone” is the homeowners because they are the people who collectively own those shared areas.
Why estate charges exist
On many modern developments, the council decides not to adopt certain infrastructure. This is becoming increasingly common. So instead, a resident management company or similar structure is set up to maintain those communal parts.
Maintenance still has to happen. The grass still needs cutting, lighting must be safe, roads require ongoing care, and drains need regular clearing.
The agent doesn’t get to choose whether the council will adopt or not, we simply help facilitate the maintenance of the areas that the residents collectively own.
The money isn’t “going to the agent”
Another misconception within the media narrative is that estate charges are somehow a cash pot for the managing agent.
They are not.
An estate budget funds the cost of actually maintaining the asset, not the agent’s back pocket. The managing agent is paid a management fee for their service, but the service charge itself is spent on the estate, predominately contractors, landscapers, repairs, lighting, insurance, and so on.
Estate charges are not a duplicated tax. Council tax funds council-adopted services. Estate charges fund privately owned communal areas that the council has declined to adopt.
Where improvement is needed – transparency at the point of sale
There is one point raised in the article that is worth taking seriously, which is the idea that buyers sometimes don’t know what they are signing up to.
That does need improvement.
Budgets should not be vague. Developers should not produce artificially low first-year costs simply to make a house look cheaper to run. Sales packs should include realistic, future-proofed budgets, not wishful thinking.
One possible reform that could genuinely help is independent verification of the first-year budget before homes go on sale. If those initial cost projections were validated by qualified estate management professionals, rather than being set solely by developers, homeowners would have more certainty and less risk of unpleasant surprises later. It would help stop artificially low initial budgets being used as a sales tactic and would set a more truthful foundation from day one.
While it would need a policy shift to implement this formally, agents with experience in real-world cost forecasting, like JMJ, can support developers who genuinely want to do this well. Independent scrutiny of early budgets would benefit homeowners and responsible agents alike.
That part of the system needs strengthening. And it is entirely reasonable that buyers should have reliable information before exchanging contracts.
The problem is not the existence of estate charges, it’s the misunderstanding of them
The recent political commentary frames estate management as a system designed to take advantage of homeowners. But the system itself is not exploitative because the gap lies in communication, expectation setting, and a lack of understanding of how modern housing developments are built, funded, and maintained.
The result of that misunderstanding is distrust. Residents get angry, agents are vilified and the conversation becomes emotional rather than factual.
Estate management charges is not a double charge. They are how privately owned shared spaces are maintained when councils don’t adopt them.
Clarity, not alarm is what will actually support homeowners.
