What is property management of housing estates?

23 August 2022

The majority of freehold houses in England and Wales are serviced directly by a local council, so when you buy a freehold house, you may not be expecting to have an added bill from a property management company like FirstPort.

However, more and more estates with newly built homes are being privately managed by property management companies instead of local councils, with the property management company appointed to make sure the shared areas of the estate are safe, clean, and comfortable. The solicitor should make all potential house buyers aware of this arrangement as part of the sales process.

Why is there a need for a property management company to manage a private estate of freehold houses?

When a housing estate is built, it may not be fully adopted by the council and the developer will then appoint a property management company, such as FirstPort, through a tender process.

The developer and the council will have agreed during the planning process which communal spaces, if any, will be adopted by the council, and which will not.

The property management company will be appointed to oversee the privately-owned shared areas of a development that are not adopted by the council. The shared spaces they manage could include – but are not limited to – the roads, drainage, communal gardens, and lighting.

The costs are managed in the form of a service charge or estate charge. This will fund the essential work the property management company does to make sure your estate is in the best possible condition now, and in the future.

What will the service charge cover?

The service charge will typically cover the shared areas of an estate and an admin and management fee which covers the cost of our communications, development management and any regulatory compliance. The rest of the service charge covers areas such as grounds maintenance, insurance, pest control, keeping the public areas clean and free of litter, sewage and drainage, streetlamp maintenance, landscaping, playground upkeep, health and safety and general repairs.

We understand the importance of providing value for money and believe our transparent fees are the right way to do business for our customers. The money paid via the service charge is only ever used to make sure the estate is well looked after. We don’t make any profit on the fees charged by the contractors we work with – every penny goes directly to them so they can fully focus on providing you and your neighbours the best service possible.

How is the service charge calculated?

The service charge is carefully budgeted every year to cover the work there is to do and the expected costs of maintenance. Typically, owners of freehold houses will pay yearly for a property management company to maintain the estate.

All residents pay towards the costs in general, even if the works that are carried out are in another part of the estate to which they live. For instance, you might live in ‘A’ Road but the works are completed in ‘B’ Close. In this case, residents of ‘A’ Road still help contribute towards the works in ‘B’ Close – but equally the opposite will apply.

In our experience, this evens out across a maintenance year so it’s a fair way to split the costs. It also means you never have to worry about finding the right supplier or deciding how to split the bill with the neighbours – as we do that for you.

There are sometimes financial considerations that are out of the property management company’s control, which contribute to an increase in charges. For instance, insurance and electricity costs have gone up ahead of inflation and are set externally. This will result in an increased amount for the estate charge.

The precise way that you contribute towards estate service charges is set out in your ‘Transfer Document’ – the legal paperwork for the purchase of your freehold property.

What are the benefits of having a property management company looking after your estate?

There are many benefits to having a property management company look after the shared area of your estate. You will have a dedicated Estates Manager who will work as a point of contact for any issues or requests. They will be proactive too, identifying anything that needs to be resolved and overseeing any contractors we may need to work with to ensure a responsive and high-quality service.

Dave Carter, who is a Regional Manager for FirstPort Estates, said:

“I thoroughly enjoy the interaction with customers and resolving any problems they raise. Our services ensure that all sites are well maintained to a high standard to guarantee great ‘curb appeal’ for our homeowners.”

Can a Resident Management Company be set up on an estate?

Residents will have the option to set up a Resident Management Company (RMC), so they have more control over where they live. An RMC is often set up to support the interests of those who share private communal areas with their neighbours and to give residents more say in how their development is cared for. This is usually set up by the original developer of the building or estate and consists of equal members or shareholders, who are typically homeowners in the development.

FirstPort Regional Manager Karen Lacey explained:

“We want to make sure that every customer feels they can have their voice heard and that any issues can be addressed quickly. 

“I manage a team of Estate Managers who work with RMCs on many developments within my region. It’s great to be able to work with the Resident Directors to keep our managed estates looking great.

“The Estate Managers will hold quarterly RMC meetings and attend drop-in meetings with residents. That personal service is so important to us, and it helps us to easily address and resolve any questions from customers.”

What does an Estate Manager do day-to-day?

Sam Jones, an Estate Manager looking after sites across Devon, Cornwall and Somerset, says every day in the job is different.

He explains:

“My role is really varied. I always start my day by looking at any customer communication that’s come to me directly or that’s been logged via customer services. Customers always come first!”

“If I get a concern or query from a customer, then I will pick up the phone, so they know they have been listened to, and explain the actions I will take to help.”

“I’ll then typically spend two to three days a week visiting the estates and speaking with residents. That’s the best part of the job for me – I love being out and about and talking to customers.”

Nicole Hughes is an Estates Manager across the North West region. She says the most important part of her job is communication, and FirstPort’s new technology platform is helping to improve this.

She says:

“The new technology FirstPort is currently rolling out is already helping to resolve issues faster and helping us to update residents in real-time.

“I carry out site inspections every 8-12 weeks and residents are able to see what I have noted and the actions I will take instantly. I’m also, of course, always available to speak to customers in person when I am on-site as nothing beats being able to chat through something with a real person.”