Benefits of buying a holiday home - your questions answered
Buying a holiday home opens up a world of benefits and allows you to enjoy time on a fantastic holiday park for days, weeks or even months at a time.
If you could choose anywhere in the UK, would you go for a favourite location in which you’ve spent lots of super holidays?
The awesome lochs, islands and mountains of Scotland, perhaps? At the opposite extreme of character and location, the gentle topography of the downs and coastline of central southern England; Dorset, perhaps?
The vast open spaces of the Lake District? On – or near to – the magical island of Anglesey that juts out from the western tip of north Wales, maybe. Or the very centre of England, Stratford-upon-Avon, made famous by Shakespeare and now a fabulous location for a holiday home.
Or maybe you fancy a holiday home in Cornwall, for its 350-plus miles of coastal path and never-ending tapestry of quaint places to visit. Maybe the lovely coastline of north Norfolk? Or the sedate sophistication of Suffolk?
Whatever your holiday home lifestyle dream thoughts, follow them and you are well on the way to deriving maximum benefit from your investment in leisure. Whatever you enjoy doing, as a couple, or as a family, buying a holiday home will provide a new location for those pursuits, in a different area from your home.
So, you have effectively two homes – double the benefit of buying a holiday home, then. You can join two golf clubs, see more heritage rail-ways, cycle further, on different terrain, find new photo opportunities, explore different historic houses and antique shops… And two hot tubs? Maybe that’s taking the concept of luxury a step too far!
BUYING A HOLIDAY HOME
Licence agreements, sub-letting, season lengths, pitch fees, running costs, gas, insurance… your questions are all answered here
1 How long can we keep a new holiday home?
When you buy a holiday home or lodge you will get what is called a ‘licence agreement’. This states the period of time that your leisure home can be kept on the park. On some parks, you have to replace your holiday home after only 10 years, others much longer; some 15, some 20.
As a generalisation, you can keep lodges for longer than holiday homes; you can expect to find a 20-year licence agreement for a lodge, and some are 40 years and more.
The length of the licence agreement is one of the first things to look into when you are considering a particular park, because it hugely influences the way in which you will be calculating the amount of investment in your leisure home and your plans for its eventual replacement.
2 Can I let out my holiday home?
Letting out your holiday home is a great way to offset its costs. If you’re interested in doing this, shop around, and you will quickly find that some parks don’t allow you to do this at all and some parks positively encourage you to let out your holiday home. Many of these parks have schemes in place to let your home for you, including taking care of cleaning, hand-over and maintenance, so that all you have to do is receive the money! You tell the park which weeks you want to reserve your holiday home for your own use and the rest of the time it can be let out.
There’s a lot to consider including the cost; lodges at Wenningdale Escapes (pictured above), near Lancaster, for example, cost between £160,000 and £180,000
3 Are my family and friends allowed to stay at my holiday home?
Some parks that do not permit letting do allow your family and friends to stay at your holiday home when you are not there – provided that you are not charging them any money to be there.
Others, though, allow friends and family to visit only while you are there, too.
4 What are the running costs of a holiday home or lodge?
In a nutshell, that’s pitch fee, electricity, gas and insurance.
5 How much should I expect to pay in pitch fees for my holiday home?
Your pitch fee, sometimes called ground rent, is the largest of the running costs of a holiday home.
That’s the amount you pay to occupy the piece of land on which your holiday home sits. The amount of the fee reflects the facilities and location of the park.
For example, a small park with no facilities and no view is going to have lower pitch fees than a park in a beautiful-view location that has a restaurant, swimming pool, gym, golf course, entertainment and more. You can expect to pay from around £1,500 to well over £5,000 a year in pitch fees. In most cases your pitch fee will include water and sewerage charges.
6 What are the arrangements for electricity on holiday parks?
Electricity is metred and you pay for it quarterly or annually, depending on the park.
7 What are the arrangements for gas on holiday parks?
Gas for holiday homes usually comes in 47kg cylinders. You buy them through the park and, when they are empty, the park will supply a replacement. That’s called an exchange scheme – having paid for the first cylinder, thereafter you only pay for the gas contained in replacement cylinders.
This is how it works: the cylinder remains the property of the gas supplier; in many cases that’s Calor Gas, which most parks use. When you get your first cylinder – or cylinders (most buyers get two) you can expect to pay £60-100 per cylinder. Thereafter, you can expect to pay £60-65 for a full replacement cylinder. Prices vary from park to park.
Most parks fit an automatic changeover system, which switches to the second cylinder automatically when the first one runs out.
On some parks, gas is piped to each holiday home from a central tank. In this case, each holiday home’s gas usage will be metred and paid for quarterly or annually.
8 Is Council Tax payable on a holiday home?
You don’t have to pay Council Tax for a holiday home because it is not a main residence. Some parks, though, include an amount in the pitch fee, which is a contribution to the local authority business rates that the holiday park pays.
9 Do I need insurance for a holiday home?
It’s essential to have your holiday home insured. Parks require you to produce proof of cover each year. Even if that were not the case, it makes sense to have your holiday home insured.
There are a number of specialist companies that tailor packages specifically for holiday homes. Among them are Shield Total Insurance, Lifesure, Towergate, Leisuredays, Intasure, Adrian Flux, Eversure, Paul Baker Insurance Services and Coast Insurance.
So, approximately how much does insurance cost? We asked Shield Total Insurance for a couple of examples. For a lodge costing £179,950, it’s around £316 and, for a holiday home costing £49,500, it’s about £260.
We also asked Leisuredays for advice. “Holiday caravans are much more vulnerable to storm or flood damage than a bricks and mortar building, and therefore need specialist insurance.
“Also, holiday caravans are often left unattended for long periods of time and can therefore be a target for break-ins.”
Leisuredays offers this advice on things to look out for when choosing a static caravan insurance policy: “Look at the review websites, such as Review Centre and see how their customers rate the company.
“Also check customer satisfaction for how the insurance company handles claims.
“Look for features such as unlimited ‘new-for-old cover’. Leisuredays static caravan insurance offers ‘new-for-old’ cover up to 15 years old. Bear in mind, though, that you will have to insure your static caravan at its brand-new replacement cost for new-for-old cover to apply.”
And the cost? A typical Leisuredays insurance premium for a £30,000 static caravan with contents cover would be £247 and for a £100,000 lodge it would be £332. (These quotes are based on eight-year-old units, customers 59 years old with three years’ no-claims discount, £75 excess, single unit caravan contents of £3,000 or lodge contents of £6,000, sited in Aberdeen, Scotland.)
Some insurance companies offer new-for-old cover on holiday homes up to 20 years old.
Most policies include storm and flood cover, accidental damage and emergency repairs, and some polices include reimbursement of pitch fees for any time your holiday home is uninhabitable.
If you are going to be hiring out your holiday home, check that the insurance policy you choose covers you for this. As with any other form of insurance, shop around for the policy that best suits your needs.
At Bay View Holiday Park, on the shores of Morecambe Bay, you can buy a 28ft by 12ft holiday home, a Swift Loire, for example, for around £32,950
10 How much do holiday homes cost?
You can go for a pre-owned holiday home and, if you are lucky, you might find one for around £15,000. Check how long is left on the licence agreement; that depends on the holiday home’s age in relation to the park’s rule on how long you can keep it there.
Lodges – larger than static caravan holiday homes – start at around £100,000 and rise, on some gorgeous parks in fabulous places, to four times that and more; location, and especially view, is a huge factor in determining the price – just as it is for a house.
At Oaklands Park, near Looe, in Cornwall, prices of new holiday homes start around £40,000
11 Can a holiday home be our main residence?
If your holiday home is the place in which you spend most of your time, you may like to think of it as your main residence – but it’s not! There are rules in place: you must have a permanent, main residence address somewhere else, because holiday home parks are licenced for holiday use, not for residential occupation. You will be asked to provide proof, to the holiday park, of your permanent address.
We know of many couples who have moved from a large house to a smaller place, with lit-tle or no garden, and bought a holiday home in which they then spend far more time than at their ‘permanent address.’ Minimising home garden responsibilities is a big factor in en-abling you to spend more time at your holiday home.
It’s worth noting that many holiday lodges can be built to residential specification (a key element being enhanced insulation), so that it’s suitable for use at any time of the year. Even so, it can’t be your main residence on a holiday park.
12 How long is a holiday park season?
That varies. Some close from the end of October to the start of March. Some close for two weeks in the early part of the year; some four, some six.
Some holiday home parks have a 12-month season; that is to say you can use your holiday home at any time of the year – but you can’t live there, even though the park doesn’t close.
When you are choosing a park, its season length is an important factor to consider; if you want to be able to use your holiday home at any time of the year, go for a park that enables you to do that. If you’re not too keen on spending time in your leisure abode during the months of short daylight, go for a park with a spring-to-autumn opening season.
The number of months for which a park is open is reflected in its pitch fees, which underlines the importance of this consideration when you are choosing your park.
Season lengths vary; at Garreg Goch Holiday Park, Porthmadog, for example, you can use your holiday home from 1 March to 10 January
13 Can I visit my holiday home on a day basis during the closed months?
That depends on the park and its rules. Some allow you to visit your holiday home when the park is closed but not stay overnight; other parks close completely.
14 Can I part-exchange a touring caravan or a motorhome towards the cost of a new holiday home?
Yes, some parks welcome part exchanges of touring caravans and motorhomes. This is why: many people become acquainted with a park by visiting it on a touring holiday basis. Then they visit more often and eventually the park becomes their favourite. That’s when buying a holiday home becomes an attractive proposition and many parks are geared up to this.
You can sometimes part-exchange a touring caravan for a holiday home
15 When I need to upgrade a holiday home at the end of its licence agreement, can I expect that a park will take my existing holiday home as a part-exchange for a new one?
We’ve not yet come across a park that doesn’t offer that facility. It makes logical sense from the park owner’s viewpoint as well as yours. You’ll probably want to keep the same plot – but this is an opportunity to get a different plot if one you like is available.
You can, though, sell a holiday home off a park yourself, to the trade. There are many companies that buy them; shop around to see if there is a deal that suits you. Part-exchanging it, though, is generally the best, and most popular option.
If you're interested in learning more about holiday homes and park homes, we produce a magazine dedicated to this topic: Park and Holiday Home Inspiration is available here