Park and holiday home advice: spreading the cost of your holiday home
Purchasing a holiday home doesn’t have to be a totally capital expenditure. There are finance options to tap into – and the idea of paying for most of, or part of, your holiday home out of monthly income can be a very enticing prospect.
You can’t get a mortgage on a conventional caravan holiday home or lodge – but there are lots of finance options around. A first port of call would be the park on which you’re considering buying; many have finance schemes available. Very obviously, it’s wise to shop around for finance, though, including exploring options with your bank.
Examples of parks that offer finance systems include Stratford Parks in Warwickshire; the company has a useful finance example on its website, detailing deposit, length of term and total amount payable including interest.
Another example is the Park Leisure group, which owns parks in Cornwall, Northumberland, Yorkshire, Lancashire, Wales and Herefordshire, and works in partnership with lenders including Barclays and Black Horse.
Trevella Park in Cornwall is among many other parks that have finance systems in place. It’s part of the Bridge Leisure group. Other Bridge Leisure parks that offer finance include Seaview Holiday Village at Polperro in Cornwall, Hedley Wood on the north Devon-Cornwall border, Ashbourne Heights in the Peak District of Derbyshire, Sand le Mere Holiday Village on the Yorkshire coast, Bowland Fell in the Yorkshire Dales, Turnberry Holiday Park in Ayrshire and Silver Sands Holiday Park on the Moray Firth coast in Scotland. These parks work with Black Horse.
SOUTH WEST HOLIDAY PARKS
South West Holiday Parks, which has two parks in Cornwall (Seaview Gorran Haven in south Cornwall and Juliots Well Lodge Retreat in north Cornwall) plus one in south Devon (Coast View at Shaldon), works with Pegasus Finance to offer finance options. Loan periods can be between 12 and 120 months.
Some parks groups have their own schemes. One is Wyldecrest Parks. The scheme is called Best Park Home Finance. It’s only available if you are buying a park home or holiday lodge on a Wyldecrest Park. The scheme offers loans of up to 80% of a holiday home or lodge, (up to a maximum of £50,000), and up to 70% of the purchase price of a residential park home. The loan terms range from one month to 15 years.
Wyldecrest has seven holiday parks, in Cumbria, Northumberland, Kent and Herefordshire, and 54 residential parks in England, six in Wales and four in Scotland.
Parkdean Resorts, which has holiday parks in many parts of England, Scotland and Wales, works with Black Horse and Barclays. Deposits start from 10% and a range of repayment periods is available. Parkdean Resorts can arrange finance on pre-owned, as well as new holiday homes.
Away Resorts, which has five locations, is among many park groups that are licenced credit brokers and can put buyers in touch with lenders; these include Black Horse. A deposit of 20% is usually required. An example on the website shows calculations for a £29,995 holiday home purchase, with a £3,000 deposit, a loan period of 84 months and an APR of 7.3%. The total amount payable in this example is £37,298.
Mortgageable holiday homes at Aria Resorts
At some of Aria Resorts’ 14 holiday home locations, you can buy holiday homes that are mortgageable. These are not conventional holiday homes in the static caravan or lodge sense; they are boutique barn-style constructions. Among these locations is Retallack Resort, ten miles from Padstow in Cornwall, where luxurious two, three and four-bedroom boutique barns are available. Mortgageable holiday homes are also available at two of Aria’s resorts on the Isle of Wight, The Lakes Rookley and The Bay Colwell.
Finance for park homes
The majority of park home purchasers are dowsizing and so the value of the property they are selling is greater than the price of the park home they are buying, so finance isn’t needed. If you do want to explore finance for a park home purchase, though, it’s important to know the key difference, in terms of loans, between park homes and bricks and mortar homes.
Mortgages for bricks and mortar homes are secured on the Land Registry listing of the land on which the home sits. When you buy a park home, in the vast majority of cases, the land is owned by the company that owns the park. For this reason, conventional mortgages aren’t obtainable. You can, though, obtain finance, through providers specialising in this market.
We turned to one of the major manufacturers of both park and leisure homes, Omar Park & Leisure Homes, to find out more.
Omar explained: “There are a number of specialist finance providers in the marketplace, which understand park homes and lodges and how they differ from traditional brick-built properties.”
Omar advise that it’s possible to get finance on up to 80% of the value of a park home. Loan repayments can be up to 25 years. As with all loans, interest rates vary depending on the amount and length of the loan, the value of the park home and on personal circumstances. Omar has suggested buyers contact Pegasus Finance for advice, though the manufacturer, like us, recommends that you shop around.
Example finance providers
One of the biggest players in the holiday home finance arena is Black Horse. This is how the Black Horse hire purchase scheme works: A deposit is agreed, together with the length of the finance agreement and your monthly repayments, which will include interest. You pay your deposit, and that sum is subtracted from the price of the holiday home. You pay the remaining balance in equal monthly repayments over the agreed term (between one and 10 years). Black Horse buys the holiday home on your behalf and owns it for the duration of the finance agreement. After you’ve made all of the repayments including interest, you will become the owner of the holiday home.
Santander Consumer Finance also offers a scheme for buyers of holiday homes. Terms are from two to seven years. A deposit of 15% of the total sum is required. You can get loans for pre-owned holiday homes, provided that they will not be more than 13 years old at the end of the agreement.
Pegasus Finance is a broker that offers a scheme with no deposit and rates from 7.9% on loans from £5,000 to £100,000 for both new and pre-owned holiday homes and lodges. Pegasus has an online loan calculator, which enables you to find out what you can borrow and the length of the term, so that you can assess what amount of monthly outlay suits your budget. You put into the calculator the amount that you’d like to borrow and the number of months over which you’d like to pay it back; the calculator uses 7.9% APR as an illustration to find the monthly figure.
For example, if you’d like to borrow £10,000 over 60 months, you would pay £202.29 per month. If you decide you’re happy to pay more than that per month, you can type in a lesser number of months and a higher monthly payment will pop up. You can adjust it until you find the monthly sum that you are happy with. Naturally, rates will vary depending on the amount of the loan and on the individual circumstances of the purchaser.
If you’re interested in buying a park or holiday home, or you already have one and want inspiration on how to get the most from your park home, then Park and Holiday Home Inspiration magazine is for you. Better still you can download a copy right now, just click here to get the latest copy of Park and Holiday Home Inspiration magazine.
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