Downsizing to a park home sounds like the ideal move for cash-strapped pensioners. Retirees can swap urban life for a quieter one in the countryside or by the sea, surrounded by people in the same age group.
Park homes are much cheaper than traditional bricks and mortar – you can buy one for less than £100,000 in most areas of the country. However, the UK park home industry has a reputation for being run by “distinctly shady characters with considerable powers”, as Sebastian O’Kelly, founder of the Leasehold Knowledge Partnership campaign group, puts it.
Last October, the government said there were “unscrupulous operators” within the sector, and that it was aware of examples of site owners who were “continuing to disregard the law, harass and financially exploit residents”.
However, the potentially good news for current and future park home residents in England is that the government has pledged to bring forward legislation designed to give them a better deal by, for example, bringing more clarity to the fees that are imposed, and introducing a “fit and proper person test” for site owners. A consultation on how this test would work is due to be launched this summer, though it is not clear yet when these measures will actually take effect.
It is estimated there are about 180,000 park home owners throughout the UK, with most living on privately owned sites.
Typically park homes are detached single-storey homes up to 20 metres long and 6.8 metres wide. Central heating, double glazing and carpeting are usually installed as standard, and some plots have space for a garden.
The brochures for new homes are pretty compelling, promising “idyllic surroundings”, “a like-minded community feel”, “luxury” and so on.
To be classified as a park home, a property must be movable in one or two pieces, either on its own wheels or by being transported by another vehicle. They are typically manufactured off site and then relocated to a plot or “pitch” owned by a private site owner or, in some cases, a local authority.
However, you won’t be able to get a traditional mortgage on a park home. Mortgage lenders are put off by the fact that park homes are situated on private land and tend to depreciate in value over time. Specialist finance is available but is usually expensive.
Buying outright with cash is a more popular option, with the funds either coming from the sale of a traditional home or a pension.
But the costs don’t stop at the purchase of your property. You will also need to pay a “pitch fee” or ground rent to the site owner. This can be anything from about £1,000 to £3,000 a year – possibly more.
Pitch fees cover the maintenance and upkeep of the site, the base that the home sits on, and possibly utilities such as water and electricity (though these are sometimes charged separately). The Mobile Homes Act 2013 allows pitch fees to be increased in line with retail prices index (RPI) inflation each year.
Meanwhile, a minority of site owners impose service charges (purportedly to cover management/admin/legal/repair costs and so on) in addition to the pitch fee.
Tony Turner, 76, bought a park home in Cornwall in 2006. He is the founder of the Park Homes Policy Forum and Park Home Facts, both of which aim to tackle injustices in the park home sector.
Turner says pitch fees are one of the biggest issues. “The increase with RPI is nonsense as renewal dates vary, so pitch fees are raised by different amounts and from park to park. We want to see fees increase by the consumer price index (CPI) – the same index state pensions are linked to,” he says.
Another controversial issue is that, under the current laws, residents have to pay their site owner a commission of up to 10% of the sale price when they sell their park home. This has been hotly debated for years, with residents calling for the commission to be reduced or abolished, and site owners arguing for it to be maintained.
“I think it’s unreasonable,” says Turner. “If you’ve spent £25,000 improving the home so it’s worth more, you’ll end up paying 10% of the inflated price to the site owner.”
He adds: “Also, by the time you’ve paid estate agent fees and removal costs and solicitors, the only thing you can afford is another park home. So you’re effectively trapped.”
Being trapped is bad news for anyone who has bought a park home but now wants out.
Says O’Kelly: “Park homes are like leasehold, but with some serious menace added to the mix: such as burning down or stealing the park home, or men turning up in middle of the night to howl abuse at ‘troublemakers’.”
A key issue in both the leasehold and park home sectors is that residents don’t own the land their home is situated on, and critics say contracts are written in a way that allows landowners to exploit this power imbalance.
Meanwhile, the park site owner must have both planning permission and the correct licence from the local authority for the site to be legal. You will need to live on a “protected” site with a residential licence in order to live in your park home all year round – otherwise you may have to move out for several weeks of the year.
Anyone thinking of buying a park home obviously needs to do their homework about the site and its owners. But even if you find one that is run by a credible operator, bear in mind that it may be sold on later.
“The issue is that a lot of sites fall into the hands of rogue owners,” says Turner. In October 2018, however, the government said a fit and proper person test would help remove “unscrupulous and criminal site owners” from the sector. It will also amend and clarify the definition of a pitch fee and prevent the use of variable service charges; change the pitch fee index from RPI to CPI; and look at whether the 10% sale commission should be changed.
