Holiday Park caravan/lodge purchase

Peter_in_Surrey

Hi,

I’ve searched the forum but didn’t find anything relevant, so I hope that my post is okay. 

My wife and I are in the process of buying a new lodge on a holiday park, with a 40-year licence, for £200k. I have paid £5k as an initial deposit, with a 5-day ‘cooling off period’. 

As I explained to the sales personnel, I have a major concern that, as it is a licence not a lease, is there any  security if the company folds, for whatever reason.  I'm assuming that we would just be unsecured creditors, and lose the lot.

The sales personnel waffle on about the company's heritage and stability, but they miss the point - many good companies fail.

I have previous experience of loosing significant amounts when companies to which I was a creditor have gone into liquidation. Obviously, all of life is a risk, but I’m getting a bit old and don’t want to be an old fool. 

I can’t reconcile why so may intelligent people are willing to enter into such an arrangement. I’ve been scouring the internet all day to find something to put my mind at rest, but I can't see anything that relates to long term security. Conversely, I find items such as:

https://www.companyrescue.co.uk/guides-knowledge/news/dream-lodge-goes-into-administration-4263/

and

www.ft.com 'holiday home manufacturers warn of risk of collapse' - “If holiday parks are not operational this summer, many park and caravan manufacturing businesses will fail,” 

To summarise, I am seeking advice as to what security one has for a holiday park licence, should the holiday park company cease trading.

Any advice would be appreciated.

Peter

youth_leader

Have you had time to check all the small print?  My friend didn't, and bought a lodge in our local holiday park here, for £150K - when she wanted to sell she had to sell it back to the holiday park company, for £15K.  Not allowed to sell it on the open market.

couriervanman

As above check the small print and check again........i have to say £200K for a lodge with a 40 yr licence,if i had that sort of money spare i'd be looking for a bricks and mortar holiday home in UK or Europe

NameUnavailable

Presumably you own the lodge but you need to check what the contract states. If the company folded (and you do own the lodge) you would have to pay to have it removed and placed at another site. How easy that would be is another matter especially if the site was closed off.

In the current circumstances I think I'd take advantage of that cooling off period! You can take a lot of holidays for £200K or buy a holiday home, as in an actual property, somewhere.

ProDave

Walk away. That is a bad investment. You should be buying a freehold property for that money.

Slithery

Save the £200k and spend it on several years worth of holidays instead, it will be much better value for money.....

carefullycautious

Is this of any use
https://www.thencc.org.uk/Con_Advice/Cons_HH_FAQs.aspx#:~:text=Do%20the%20Mobile%20Homes%20Act,on%20licensed%20residential%20home%20parks.&text=So%20if%20you%20do%20want,is%20licensed%20for%20residential%20use.

Peter_in_Surrey

Hi again,

Thank you all for your comments and advice.

It will come as no surprise that my wife and I have decided against the purchase and withdrawn from the contract.  We are, nonetheless, gutted, as it was a fantastic new build on a 5star holiday park, with panoramic sea views.

We will content ourselves with holiday lets - outside of the peak times.  Perhaps we can do a deal for a 3-month let in the middle of winter!

kangoora

I think that was a very wise decision. You don't mention service charges, maintenance or other costs which I would expect to see on a leasehold lodge on an annual basis. Also, it's not unknown for, say after 20 years, for a 'new' lodge needing to be purchased to replace the old 'tired' one. This should have all been detailed in the contract however.

You don't say how old a 'bit old' is so would a 40 year lease even be sensible if you were, say, approaching 60 years old........

£200k pays for a LOT of holidays, £5k/year for 40 years even without allowing for any interest, laughable as interest rates are at the moment.