ParkHomes and Equity

lincroft1710

Albermarle said:

lincroft1710 said:

Sea_Shell said:

We regularly stay in "park homes" (lodges) for our holidays.   They retail new at anything up to £250k, especially on a nice site.  40'x20'

I wouldn't call them a caravan, but the smaller ones are more caravan like.

What type (size) are you looking at?

There is a park in Hampshire which has just opened a new development of holiday lodges with prices ranging from £365,000 to £600,000. Annual site fees are £10,200

I am  not an expert, but I know there is a difference between holiday parks and residential parks.
Normally with a holiday park, you can not live there 12 months a year, and the park will effectively close for a  period each year. Also I think you can not use the park address, for things like GP registration or the electoral roll.
They are exempt from the Mobile Homes Act 2013, which was written for residential parks. If you live on a fully licensed residential park, you can live there all year round and use it as your main address. The Act also sets higher build standards for homes on a residential park, although there would of course be nothing to stop a high end holiday park to have better built homes.

My post was in response to @Sea_Shell's regarding the cost of holiday lodges. The park in question is most definitely a holiday park. 

GDB2222

triplefin said:

I am going to buy a Park Home. I was always under the impression that they were leasehold therefore you were unable to take out equity. However, I notice that some are advertised as being freehold. Does this mean one can take out equity in the same way as you would any other freehold property?

Thanks for clarifying that it's  a residential park home, as this gives you more protection than a holiday park home. It's unusual for these to be freehold, so I think you'll need to clarify exactly what you are getting and what ongoing charges there will be. For example, you may own the plot, but you might need to pay quite a lot for the use of the access roads etc. 

Park homes tend to be fairly short life buildings, so not very suitable for equity release. But, you might be able to use the freehold plot value for equity release. 

Besides that, there are specialist firms that provide finance to purchase a park home. Up to 80% of the purchase price, I understand. So, the park home itself does provide some collateral, even without owning the land it sits on.

triplefin

GDB2222 said:

triplefin said:

I am going to buy a Park Home. I was always under the impression that they were leasehold therefore you were unable to take out equity. However, I notice that some are advertised as being freehold. Does this mean one can take out equity in the same way as you would any other freehold property?

Thanks for clarifying that it's  a residential park home, as this gives you more protection than a holiday park home. It's unusual for these to be freehold, so I think you'll need to clarify exactly what you are getting and what ongoing charges there will be. For example, you may own the plot, but you might need to pay quite a lot for the use of the access roads etc. 

Park homes tend to be fairly short life buildings, so not very suitable for equity release. But, you might be able to use the freehold plot value for equity release. 

Besides that, there are specialist firms that provide finance to purchase a park home. Up to 80% of the purchase price, I understand. So, the park home itself does provide some collateral, even without owning the land it sits on.

Thank you for your thoughts about the freehold plot. Obviously something I need to look into more. I was surprised to find a couple of these marketed with a freehold label.  I am a cash buyer so finance is not a problem. I understand there is usually an annual fee payable to cover roads etc. 

Murphybear

lincroft1710 said:

Sea_Shell said:

We regularly stay in "park homes" (lodges) for our holidays.   They retail new at anything up to £250k, especially on a nice site.  40'x20'

I wouldn't call them a caravan, but the smaller ones are more caravan like.

What type (size) are you looking at?

There is a park in Hampshire which has just opened a new development of holiday lodges with prices ranging from £365,000 to £600,000. Annual site fees are £10,200

That doesn’t surprise me.  Parts of Hants and Dorset are eye wateringly expensive for anything near the seaside.  I was born and brought up in Hants and now live in Dorset, I couldn’t afford a holiday place here unless my Premium Bonds come up.  Beach huts can go for £300k down here.  Or as some people say “glorified sheds”

Ive just had a look on Rightmove.  There are 2 park homes in some of the most desirable places in Hampshire.  Both cost £650k with service charges/maintenance of £12k.  One has been on Rightmove since April.  I wonder why?  

searchlight123

My brother and sister-in-law live in a residential park home in Essex. It is a really good sized 2 bed, 2 bathroom bungalow. Very nice size and a lovely wrap around garden. Wasn't cheap (circa £220k) but around half the cost of a comparable traditional bungalow in the same area. Their 'plot' is freehold - and their park fees are around £4k a year.

Not my cup of tea but they are very happy there and it afforded them the opportunity of an early retirement with no financial worries, so good for them.

Grumpy_chap

triplefin said:

Thank you for your thoughts about the freehold plot. Obviously something I need to look into more. I was surprised to find a couple of these marketed with a freehold label.  I am a cash buyer so finance is not a problem. I understand there is usually an annual fee payable to cover roads etc. 

I don't know what Freehold means in the context of a static park home.
The first thing I'd check is that the Estate Agent didn't simply tick the wrong box when creating the listing.