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?

Otherwise, have you considered you and your siblings remortgaging your own properties to bail out your parents? I'm sure legally it could be drawn up that any future inheritance must first be used to pay back all the siblings who helped, before whatever remains is split equally

This I would be wary of, but the OP has said that they and siblings aren't in any position to do this anyway.

The OP hasn't said anything about where her DPs live, how much equity they have or why downsizing is not an option financially. Now they could live in a cheap part of the country and have always done low paid jobs, but even then, in 20 years, they should have paid off nearly all their mortgage and as house prices were much lower 20 years ago, their mortgage should be quite small unless they have been remortgaging and taking money out and/or extending the term (there is no mention of them upsizing in the last 20 years which would be a legitmate reason to increase the mortgage amount and term).

This, along with the hair brained caravan scheme, suggests to me that they are quite bad with money and if the OP and her siblings bail them out, they will still end up in a mess because they will continue to live above their means.

If this is the case (and it might not be, no intention to offend) why should the OP and her siblings risk their own financial stability to bail out feckless parents who will continue to make poor financial decisions and not see past the short term because they always have an expectation that someone else will bail them out?

You are not BU. How are they going to maintain the ground rent etc when they are no longer working? Heating bills? What happens if the owner sells the site? A friends father decided to do this. He sold his house and put the profit into buying a canal boat. Great idea until a few years in and lack of money for maintenance meant the boat sank. They were then homeless at almost 70. A retirement flat is a much better investment.

The downside of the caravan is yet to be discovered by your parents, but I can tell you some of them:

1. They are horrendously noisy when it is windy and rainy it is impossible to sleep

2. The confined living space tests even the best relationships

3. Storage is a huge problem there is so little of it.

4. The beds are tiny and uncomfortable, even changing the mattress made no difference. The single beds are even worse

5. They need to check they will be able to register with a GP etc, as some of the parks are not included as they are considered 'second homes' and not primary residence.

6. They are not secure, anyone can sell it on and change it beyond all recognition and charge the earth.

7. If one of your parents needs hip replacements etc in the future, it will be almost impossible to manage in a caravan.

8. They can be absolutely freezing in the winter, boiling in the summer

9. Being 'homeless' for a month might sound fun when you are a youngish older person and can travel, it won't be so appealing when they are ninety. Most likely they will be living in a B&B for a month.

10. They will lose a lot of money when they come to sell it, it will be much harder to move into stable accommodation as the prices will go up.

11. the heating bills and frozen pipes are always an issue

12. Everyone there is nosey and bored, and it is quite a suffocating atmosphere.

If they know all of this and still go ahead, good luck to them. I would recommend they rent one for a year first and try it.

YANBU. My aunt and uncle did exactly that about 18 years ago. They now have an old caravan that’s worth nothing, no bricks and mortar that would’ve doubled in value since then, and every year they have issues with somewhere to stay for a month. They were full of plans to go somewhere warm for the month but instead have ended up having to live apart with different friends/family members each year. In addition, when it freezes they get frozen pipes/broken down heating and the caravan now needs new windows etc. Biggest mistake they ever made.

I do know people who moved to one several years ago, they would have been 62, 68 when they moved. It is a residential park and they seem very happy, no probs. Though everyone is old so whenever I speak to them they list whom of their neighbours has died! But I spose that's the same with any elderly residences. It is in a pretty area, no pool etc and they wanted to own their home outright and be handy for buses etc, which they weren't before. Perhaps the DPs need to check out other parks.

When sitting them down with calculations, also include how each one of them could afford it alone if the other was no longer around. In that situation they could face losing their home and having nowhere to go on top of losing their partner.

As your parents are doing this to save money and enable them to retire I think you need to present any objections in financial terms. Show them GaucheCaviar’s link. I assume they are not Radio 4 listeners as there have been countless features on the this on You and Yours, Moneybox etc. It sounds as if they have been swung by the idea of being mortgage-free and paying no council tax and living in a place with a gym and pool on site without looking at what the financial reality will be. 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. This in spades. Of course you should try and draw their attention to the pitfalls.

Your uncle sounds well below being aged and infirm though pinkvoid! And that's kind of what people are saying, caravan living isn't suitable for most people once they get very old, once they're really feeling the cold and are less mobile. He also has a place to go permanently for the one month each year which OPs parents don't.

I don't think living in a caravan is a bad idea per se if you like the lifestyle, and some people do. You just have to understand how expensive it can be and be able to afford it. Your uncle may well be able to, OPs parents can't.

Point out to them that in seven years time their mortgage - which I imagine is a fixed rate - will be paid off. If they move to this caravan (which is essentially what it is) they may well be paying the equivalent in service charges by that point - assuming services charges are not fixed and will go up year by year. They will effectively be in exactly the same situation they are in now for perpetuity, but will no longer have such a saleable asset to get them out of the hole.

My dad and his new wife did this.

Her newly divorced, with her settlement, and dad with his money tied up in a property.

They used all of her settlement to buy a park home outright. It seemed at the time like the perfect solution... no mortgage property fully owned. Little maintenance.

BUT

Parks like to keep themselves looking smart and so all have a 15 year (maximum) age on homes and can then force you to remove it. They put it in the contract. Most uphold it too as it is in their interests to sell you a new home, and if not you, another buyer on your plot.

Ground rent will be about 3.5k a year

All have to shut up shop for at least 28 days to remain holiday parks and so avoid council tax. Most shut for 3 to use it as a maintenance period. Where will they stay?

My dad has now sold his own property but had so little equity it won't cover the next newer park home. And the current one is slowly ageing but FASTLY depreceating.

It's like losing the security of a paid for home, or even of a mortgaged home, and living in your financed car...... because that is how rapidly they lose value and also age.

we lived in a static caravan for a stint. we even put in a very small aga, but winter still had me in despair. i didn't realise just how depressed it made me until we moved out and i had nightmares about being back there.

I agree, huge bloody mistake.

Reminds me of my GFIL - his wife died and she had taken an equity release out on the house. By the time they managed to sell the house, there was barely any equity. All they could afford for him was a static caravan. The park is horrible, no proper amenities. He now has dementia and can’t drive and is completely stranded there. They’ve been trying to sell for over a year and can’t.

Figure out how much equity they have and see if there’s anything proper and suitable available for their budget. Avoid this sort of thing, retirement flats etc unless they’re the only option.

Do they have a bedroom or reception room they could convert to take on a lodger? It’s give them more income.

This is a really bad idea, and will cost them more in the long term.

Are you able to help them pay off their mortgage so they can stay in their current house? Or can they downsize to another bricks and mortar home?

Where is the OP?

Lots of people do it. However they go onto small sites that don’t have an age limit on the Caravans as long as they are kept in good condition. Newer ££££ Caravan’s can be kept very warm, central heating/underfloor insulation/double or triple glazing etc but you do have less space and you cannont just adapt a Caravan easily although you can buy Caravans for disabled people ready kitted out from the manufacture (wider doors/lowers sinks and units/extra hand rails/hoists etc

The biggest thing isn’t lots and lots of research not just jumping into it. Site fee’s easily go up at least £100 a year, gas safety yearly, electrical 3 yearly, drain down when vacating for the month during winter, insurance, water, gas, electric. They will still need a registered abode for council tax purposes etc.

I would be concerned too , cant they downsize ?
My friends Mum and Dad downsized and bought a static caravan in their 50's!! I can't help worrying it was a terrible mistake . Do they even last 50 years ? ( potentially) .

A lot of retirement flats have a huge groundrent too . Me and my mum went to look and one of them was £500 a month plus her bills , she is better off staying in her big house !! 🤷‍♀️

I would be concerned too , cant they downsize ?
My friends Mum and Dad downsized and bought a static caravan in their 50's!! I can't help worrying it was a terrible mistake . Do they even last 50 years ? ( potentially) .

A lot of retirement flats have a huge groundrent too . Me and my mum went to look and one of them was £500 a month plus her bills , she is better off staying in her big house !! 🤷‍♀️

Can you show them how much the outgoings will be in a spreadsheet ? A hotel or similar for a whole month would cost a lot plus the fees .. £120 for a gym is Mega expensive . They could join a luxury gym for that !

Where is the OP? - gone for a weekend break in a caravan?

Are the gym, pool, etc open and available all year round? Some amenities are only open for peak season and then it will be cold, rainy and nothing to do. I think the posters who have suggested they rent for a year (could rent out their place they own at the same time) have a good solution then they will know exactly what they are getting.

so many pitfalls!
what is the attraction of a static caravan?

Is it because you feel as if you're permanently on holiday.... because caravan = holiday?
So It seems like a fun way to live when compared to declaring yourself to be elderly and living in an old person's flat

A lot of retirement flats have a huge groundrent too
We definitely need better and more cost effective solutions for older people, attractive and easy options which will incentivise people to downsize
Not predatory retirement complexes trying to bleed them of all their assets

If the OP does come back, another thing her parents need to think about is how much 'stuff' they have and what they plan to do with it if they do move into a caravan.

Most people who've lived in a house for decades have managed to fill it with possessions and furniture and will need a serious decluttering exercise before they can move to a caravan. MIL struggled badly enough when she moved from a smallish 3 bedroom terrace to a tiny 1 bedroom bungalow.

She got rid of about 2/3 of everything she had, paid a fortune to store some things for a year, before she realised that she wasn't ever going to fit them in the bungalow and still struggled to get to grips with much more compact living - there were boxes under the bed, stuff piled up on top of the kitchen cupboards etc.

What about practicalities like would there be a washing machine or would they have to use a laundrette (more expense) and would a caravan kitchen be suitably equipped for proper cooking?

My PIL did this 5 years ago and haven't looked back since. They have a wonderful early retirement life. It's a lot more common than you might think.

We also have a static caravan on the same site and wouldn't hesitate to think about doing the same when we're of that age.

The only difference I see in the situations though is that they had paid their mortgage off so whatever was left over from sale of house and buying the lodge was theirs to keep. They also don't have to be off site 28 days consecutively but 28 days over the year, which is easily done with holidays and weekends away.