To think my parents are making a mistake?

[FizzyCherry]

My parents are both of retirement age, Mum is 69, Dad is 72.
Due to various reasons they didn’t get a mortgage until 20 years ago and both still work to pay it off, but they have at least 7 years left on it.

They have decided they want to retire, sell the house and buy a static home at a holiday park. They’re convinced it’s their ideal solution.

I totally understand their logic but I can’t help feeling they are being lured into a situation they will end up regretting.

If they sell the house, they can clear the mortgage and buy a static home outright with money left over.

However, they still have to pay the equivalent of 2/3 of their mortgage in ground rent and various other fees.
The park has swimming pool, gym etc, they are “free to use” - but that’s another £120 a month membership (!)
They must vacate their home for the whole of February every year so the site residents can avoid council tax.
Plus a friend of theirs lived somewhere similar that the owner decided to sell to developers. They were given £45,000 to “buy somewhere new”, after having lived there 10 years. They only owned the home, not the land, so that actually wasn’t a bad offer, but obviously nowhere near enough to start again.
So although they won’t have a mortgage, their outgoings will still be quite high, and they won’t have the same income, and they will need at least one car because this place is in the middle of nowhere. Plus at the end of the day, they will have nothing to show for it.

I have visited and it’s nice, but I think they are so attracted to the idea of living on a holiday park they are not seeing the full picture.

In addition, it’s in the countryside, where my mum has always insisted she could never live.

I asked if they would even consider this village if they were looking at houses, they said not for a second.

I fully support them in needing to make a move (and the house they’re in they only bought when I was 20, I only lived there 2 years so there’s no childhood sentiments involved).
Nor is this about inheritance before anyone says anything.
Although we’re not well off now, my husband stands to inherit quite well and my parents have never had much, plus have several kids, so it’s never been something we really think about,

But AIBU to be wary of this solution? Their current house is five minutes from mine and they are convinced that I’m trying to put them off because it’s convenient for babysitting etc but I genuinely am not remotely thinking about me or my needs, I’m an adult who can sort my own life.

I haven’t told them this but my husband and I have been trying to work out a way to help my parents pay the mortgage off but we’re just not in that position right now.
Nor can we offer them a spare room for February every year, we don’t have one. Nor do my siblings (one does but he lives abroad and my parents don’t like flying so he comes here for visits).

I suppose what I’m looking for is reassurance that I am BU, or at least more experiences of why I’m not.

I have suggested they look at retirement flats etc, my mum thinks they are for “old people”.

They like their house and would stay if they could afford it.

WWYD?

One of my family is a financial advisor. He generally advises his clients away from these types of holiday homes as they only depreciate in value. Along with all the other concerns you have and other reasons posted here.

My parents were toying with this idea but knocked it on the head after doing their research.

I wonder if you can research alternatives for them? A small flat in a cheaper location? Doesn't have to be retirement.

It's madness.... In the UK weather and also the chances of them not having the amount of money to live on they're hoping for...with the park fees/maintenance /compulsory absence from park to fund /depreciation, let alone perhaps having to buy an entire new unit...

With all the concerns upthread- park homes /static caravans are becoming the pyramid selling /timeshare of the 21st century...

I don't understand how people can tell the OP that this isn't her business. They are her parents - it is her business!

I think you have to be really blunt with them. How do they propose to pay all the fees/replace the static once they give up work? What are their plans for each February?

I see you being expected to bail them out of trouble in a few years. So you have every right to vociferously express your opinion before it's too late.

Ultimately is IS their choice, but I think you're right to be concerned. It sounds very precarious. Where will they go in that 12th month? How will they pay the increasing ground rent?

Could you suggest that they try renting a similar house for a month or two in, say, November?
At least that way, you can all be sure they understand what they're getting into.

If they really are that desperate, can you and your siblings help out financially for the next 7 years?

Read the info at the link below - yes, there are horror stories but best for your parents to be aware. I am sure there are park home owners who are fine and happy with arrangements but how do new owners know what might befall them in the future? You cannot actually do anything other than make sure your parents have full information...

www.theguardian.com/money/2003/apr/27/property.homebuying
www.thephraa.website/

National Park Homes Council (www.theparkhome.net), and the British Holiday and Home Parks Association (www.bhhpa.org.uk).

It is a totally mad idea and you must try and talk them out of it. I know somebody who did this years ago and said it was the worst thing they ever did and it was totally freezing in winter.

Also the caravan will deteriorate over the years and will eventually need to be upgraded by a newer one. It's all very well to say it's up to parents but children take the flak for mistakes by elderly parents. And it will become OP's worry in years to come.

I would be very firm about insisting they think through all the ins and outs. As in, if they say something about renting a holiday cottage for February, immediately go online and price one up, or if they say they want to stay with you, firmly saying that won't be possible. Ask them where they plan to stay if they do become less mobile or in needed care for that month. Will they be able to find and afford somewhere accessible and local enough for carers to still get there? Do what you can to make them do the maths.

Ultimately you can't force them to do or not do anything, they are adults, but you can at least know that you've done all you can to help them avoid making a mistake.

Any of this sounding feasible, OP?

I wonder if it would be possible to convert the remaining part of their mortgage into interest only and the mortgage only to be paid of when they die and the house is sold. Not sure if you can have an equity release on a house that still has a mortgage on it.

And another thing if they do end up having to claim pension credit or housing benefit when they retire, what they can claim for rent won't include the amount they pay for use of facilities like the swimming pool and so on. This is just so ill thought out and full of pitfalls.

They have enough craftiness to look for 'loopholes' in 'the system', but not to really understand how and where is right to do this. A big attraction of park homes was apparently that "you can buy one without using a solicitor!"--to the rest of us, it would seem like madness to spend £k without taking legal advice, and of course exacerbated by that lack of education.

That's a very powerful insight.

Many years ago, I recall reading that someone had done a study (in the halcyon days when ethics approval was only applied to medical trials and often not even those) aimed at identifying these sorts of delusions. It compared the price you could get selling a car radio which was (a) advertised new, being sold because the car owner was upgrading (b) sold in a pub with a heavy implication that it had been illicitly obtained as "surplus stock" or some such euphemism for stolen and (c) sold in a pub as explicitly being the proceeds of car theft. Scenario (a) got the lowest price. People liked the idea of getting a good deal even if it was illegal, to the point of actually being willing to pay more for it.

You're saying the main way to scam people who don't have easy access to legal advice is to appeal to their paranoia about "the system" while steering them away from solicitors. That makes a lot of sense. Thanks.

My parents moved into a retirement flat because they could no longer manage a house and my mum had exactly the same reservations as your mum (she thought it would be like an old folks home). Their flat is beautiful and they really love it. Most of the people who live there are active and they have made some nice friends.

The only thing I would say is that you need to be aware of service charges; my parents pay approx £150 a month but they have recently paid out £4,000 for each flat for a new roof.

My Dad bought a proper park home (all year round living not a holiday home which they are planning if they have to vacate for February). He's now 80 and it is problematic. The investment in a depreciating asset isn't such a problem but because of the ground rent he is effectively paying rent still even though he owns his home.

ALso as with your parents he is out in the countryside and thats becoming a problem as he's getting older. He forsees having to give up driving in the next couple of years as he's beginning to find it stressful.

Homewise sell properties with a lifetime lease at a cheaper rate than the full price of the property. It will mean they don;t leave any property but as you say you're not worried about that then it could be an option

www.propertyindustryeye.com/analysis-a-look-at-how-the-home-for-life-plan-works/

Are they sure about the council tax? My friend's mum has a holiday chalet (doesn't live there) and pays council tax at 90%.

It sounds a daft plan to me and if it all goes wrong you will be the contingency plan
I agree with this but what can you do?
parents don't seem to listen to their children in these sorts of situations

How are they going to afford the ground rent if they're retiring and it is 2/3 of their mortgage payment? That doesn't sound right to me, are you sure of that figure?
After that, I know people who have retired to these parks and are the happiest they have ever been, it's a close community with a holiday feel about it.
You mention all things that "could" happen and go wrong. If we all felt like that we would never do anything would we?
The month that they can't be on site is in Winter and if they save for it they can book into a seaside hotel for a month at very little cost.
Try to look how it can be done, not how it can't.
Leave them to it, be happy for them.

Actually I think with Homewise leases you can leave up to 50% of the value to your beneficiaries.

I think you should take advice on it but I think it looks a good option for people who want to live somewhere they can't afford to buy outright who aren;t worried about leaving money.

ALso look for leasehold properties with short leases - they are often heavily discounted.

They are total money pits we had a static caravan that was seasonal and it cost us a fortune the ground rent just went up &up the residential parks are even more expensive but if they can afford it then it is up to them but I would go through it with them and where are they going to stay in February?

Example 2 bed flat in IOW for £73k (depending on your circumstances

www.rightmove.co.uk/property-for-sale/property-62159161.html

Check your area on rightmove or similar site.

"Not sure if you can have an equity release on a house that still has a mortgage on it"

I wondered about that.

You're saying the main way to scam people who don't have easy access to legal advice is to appeal to their paranoia about "the system" while steering them away from solicitors. That makes a lot of sense. Thanks.

To be fair, I don't think the "Don't need a solicitor" thing came from the site management themselves. It seemed to be more the personal preference of people who generally aren't keen on bureaucratic processesof course, few people actually relish them, but most of us can see the need. There were a few site owners who used quite aggressive methods to 'churn' their residents, but I don't think they'd have had the wit to use psychology to get them to sign up. Some people can walk into a bad situation even without the bad situation doing anything very clever to draw them in. (Other disputes seemed to hinge around a basic difference between the business model the site owners had predicated their existence onie replacement of units, re-sale of utilities etc.--and the far lower inputs envisaged by some of the residents.)

I'd be concerned, too, but I don't see what you can do if they're really set on it.

I looked at a lot of retirement flats with my mother - she wanted to downsize from a fairly small house - she'd already downsized once before my father died. But the flats tended to be very poky and the maintenance/ service charges were always pretty steep, so it never happened.

BTW, retirement properties can be notoriously difficult to sell if and when you have to, for probate or care costs, and even if they are empty for a year or more, the hefty charges still have to be paid.

I understand your concern. I saw a TV programme about a community of retirees living in static homes, it was in the south of France but there is no reason to believe that the same situation couldn’t arise in the UK.

The owners of the campsite sold up, and the new owners decided to upgrade the entire site. They informed all the residents that they had six months to upgrade their static homes to new models, otherwise they would face eviction from the site.

Most of the residents couldn’t afford new homes, and the resale value of older static homes is extremely low. They tried to find other places they could move to, but couldn’t find anywhere that would accept them, as their homes were too old. The documentary showed them fighting through the courts for the right to stay, but I don’t remember the outcome. It was all extremely stressful and complicated.

Couldn’t your parents simply downsize to pay off their mortgage?

They must vacate their home for the whole of February every year so the site residents can avoid council tax.

This is an effect of it being a holiday letting, but isn't the reason.

IIRC, the protections of being on a residential caravan/mobile home/ park home park, limited as they are, only apply if it is your "only or main home". By closing the site for a limited period each year, the relevant legislation doesn't apply--leaving the occupant (as mentioned upthread) entirely subject to the contract.

(There may also have been planning issues whereby the LA was happy to grant permission for a holiday site but not a residential one.)

Oh when we decided we had enough of the site fees etc the park wouldn't buy our van back or allow us to advertise it in the members club for sale as it was to old (it was 8 years old) it was a faffing hoha. I did manage to sell it to a caravan dealer at a frigging loss. Your parents need to look at the miniscule small print before they buy anything

Re the month of February, BTW, my folks once spent a whole winter month in a fairly cheap hotel in Spain. My father always maintained that the entire month only cost about the same as they'd have paid for food and heating at home.