What's the deal with residential park homes??????

[A9SheryRan]

My mum is 60 next year and is currently going through a messy divorce. She is having to sell her home in the process and will have to downsize.

She won't come out of the divorce with a lot of money and doesn't want a mortgage/loan in her retirement. She's currently looking for properties now and her only asks are that she has a garden (she LOVES gardening).

We've seen some residential park homes which are within her budget in some decent areas but what are they like?
She's young at heart and always spends time with the grand-kids. After she's settled she wants a pet too.

Are residential park homes a good route to go down? Anyone live in or know anyone who lives in them? What are the pros and cons for someone like her?

Dad was in one - loved it. 365 day residency, quiet, attractive, smart. It was lovely. Only reason he moved was to be closer to me and there are none near me. He’s now in an over 50s property. He put his park home on the market, was still having brochures sorted etc when he got a call from the agent. A couple wanted somewhere like his, could they come and view? They were there in 30 minutes, 15 min looking round and there and then offered a cash offer of more than he had paid, 3 years earlier.

As houses, and as communities, they can be good. But as PP have said there are a lot of risks - isolated locations, restrictive T&Cs, high and hidden costs, depreciation, difficulty of selling, and insecurity.

A park that is good now can easily change if it gets a new owner or manager. At 60 she is very likely to live longer than the max permitted age of the home, so will need to deal with either moving, or with buying new and disposing of the old one (with additional commission costs) when she's in her 80s.

It works for some people, but do extensive research and make sure she goes into it with her eyes fully open.

A friend of mine has lived in a residential park for over 10 years. She lives with her husband and they love it. I know they have to pay ground rent to the owner (no idea how much). They have a hall, large living/dining room, 2 bedrooms, kitchen. It's bigger than some bungalows I've been in. The only problem they've had is when the electricity went off and nobody could get hold of the owner to contact the electricity board.
I imagined it to be like a holiday caravan/lodge park but it's not, it has defined plots with fenced off gardens and drives. It looks like a development of new bungalows.

Read the lease and the service charge arrangements very, very carefully. Get legal advice from a solicitor with experience of this sector. Look to see if there are any residents groups for the particular operator and see what they say.
if buying a new one look at what the market is like for second hand ones, unlike ordinary property the values if these only goes down.

I’m almost certain that every 15 years or so you have to move them…..

I worked with three people who lived in them and did long term, before I moved to where I live and work now.

Seemed to me that who managed the park homes made a difference (they were good at this place), and also local shops etc were limited. I know someone now who has one as a weekend retreat and there is one month a year where they cannot use it, however that is not called residential.

So consider local facilities and do your research about any conditions. And charges especially.

@A9SheryRan some of them are lovely, some are not warm enough in winter, some have a period of up to a month where the owner can’t live there, though not all - and that can be handled by booking a long holiday somewhere warm. There are also options for part-ownership for over 56s as well; might that be an option?

There may be issues with residential caravan or 'lodge' developments. You have to pay service charges and ground rent and the only person I know who lives in one pays more than £6k a year in basic charges. There's council tax on top. Bottled gas for heating/ electricity is supplied by the site owner and he charges a premium. Lodges aren't that well insulated, and because they are detached they can be expensive to heat. You don't own the land the lodge is sited on and if the site owner decides they don't like you things can get very complicated. The lodges are just glorified caravans and they may not have a long life. So you're living in depreciating asset that may eventually be worthless — and even incur costs to remove from the site. Some sites have contracts that require people to replace their lodges or caravans after 20 years or so, to keep the site looking smart and fresh and not full of dated, dilapidated units. So if your mother buys a 5-year-old unit, she may have only 15 or so years before she has to find another £100k or so to replace it.

If she's 60 she is likely to live for another 25 years. She and you need to think about how she'd cope in her 80s if she had to move out. In my area people are able to buy a 1 or 2-bed bricks and mortar retirement flat in a development for around £100k. The ground rent and service charges are about £5 a year. It's true that if your mum or you came to sell it in 25 years time you might get less than £100k back — but you'd get something.

Oh, and some sites have a contract that specifies that if you sell your van/ lodge to someone else the site will take 10+% of what you sell it for.

I have looked at this option but it seems that they are very overpriced compared to a bricks and mortar flat, for instance. It just doesn't make sense to buy a residential park home that is way higher in price (think 150 k for residential park home compared to 90k for a flat). And then have ground rent (which will most probably increase) compared to a flat which presumably will gain in value and meet your needs. And also the depreciation in value of the park home.

The comparison of those numbers means it makes absolutely no sense to buy a residential park home.

Sorry: the bricks and mortar retirement flat has charges of around £5k a year, not £5!

Nope.

If she can't afford somewhere with a garden except with a park home, could she afford somewhere with no garden, and then get an allotment, do voluntary work somewhere related to gardening, or live next to a nature reserve. I'm a similar age, and love gardening, but I'd be loathed to get a park home in case I needed to sell later and find my capital had eroded.

There was a small residential park in our area that had the land sold and they were all evicted to make way for a drive through coffee place. The residents, some of whom had lived there years and expected to see out their days on the park, set up protests and really publicised it but nothing could be done to save it. 🙁

I have a friend who lives in one (early 50s) with her two dogs. It’s a lovely place. She has a great garden and it’s very peaceful.

The leaseholder doesn't have any say in who you sell a bricks and mortar flat to. I've sold two leasehold properties. But you're right when it comes to park homes and lodges and caravan parks: the sale of the lodge/ park home goes through the site owner with none of the complexities you get with solicitors when buying a bricks and mortar property. It's more like buying a car than a long-term property.

The downside of that is that you're beholden to the park owners and their fees. Also, it will be really difficult to sell.

What will she do in 15-20 years when she needs to pay thousands to get her old 'home' taken away and replace it with a new one, costing £100k+? I do hope for her sake that she has a plan.

The only person I know who lives in one knows that if she lives beyond the age of 81 she's going to be in trouble, because at that point she'll have to move out and will be homeless.

Yes, exactly. Really not a good investment nor a long term plan. I really would not touch this type of home with a barge pole.

Don't let her do it.
There is a Facebook group called Holiday Park Action Group full of horror stories of people losing everything.
It's an unregulated industry full of sharks.
Seriously.
Do t do it .

I would look into how its heated too. Someone I know lives in one. Posh site, nice etc, but can only buy gas from the owner and its extortionate. Likewise, ground rents £££.So the on costs are huge. Also whereas most houses increase value with age these depreciate and I think many have clauses that you have to replace after x years. What if she needs funds for her old age at least a tiny house would hold its value?

Tell her to look for a cheap freehold house not a mobile, she may as well flush her assets down the toilet buying a park home. An older friend bought one, and is financially crippled by the ever increasing service charges and ground rent. She’s late 60s and she says it was the worst decision she ever made. The mobile cost £75k which sounded like an absolute bargain but it’s a millstone round her neck now. No one wants to buy it because of the hidden costs and fees.

I don’t get that at all. I think there are a lot of question marks because she has a lot of questions.

Our friend has had the same experience. She too bought after a divorce against everyone’s advice and she says it’s the worst decision she ever made. Not because she hates the cabin, it’s lovely. But the park owners are hellish, gouging her on fees and even on energy costs (she can’t have her own supply). She has a modern unit and even then it’s impossible to keep warm in winter. Fast track 20 years (she’s your mum’s age) and she now realises she’s going to be huddled in a rusty tin can which no one will take off her hands, swathed in blankets to keep warm. Please, please tell your mum about these notes. I can’t bear the idea of more and more people making this terrible decision and ending up in the same terrifying position as our friend.

If your on facebook I suggest you look at this group: https://www.facebook.com/groups/1488700298019076/?locale=en_GB

Although residential homes should be different. Large numbers of these parks sell to people claiming they can live there all year, but it is only as a holiday home and you must be paying council tax elsewhere.

I'd recommend she stick to bricks and mortar. The electric, gas, standing charges, ground rent and lack of security make them an expensive way to live.

Some only let you have them for 20 years. Then you're out on your ear. Plus the month away each year.