Park and holiday home finance: everything you need to know

Park home finance: specialist park home loans explained

Factors taken into account in establishing if a loan can be offered on a park home include the value of the home, its location, and the financial circumstances of the buyer – just like any other type of property.

Park home finance is available through specialist finance companies which help people to buy park homes via a park home loan. These specialists are regulated under the Financial Service Authority (FSA) and understand how park home finance differs from traditional brick-built mortgages.

Research shows that the most you are likely to be able to raise on a loan for a park home is 80% of the cost, and the most likely maximum repayment period is 15 years. Some companies, though, offer loan periods of up to 25 years.

Best Park Home Finance works with the giant residential park owner, Wyldecrest Parks. Best Park Home Finance says, “We offer you the option of a Conditional Sale agreement secured against your park home or lodge. This means you are committing to becoming the legal owner of the park home or lodge once all repayments have been made, with the certainty that the payments will not change.

“Interest rates will primarily be determined by the economy but will vary depending upon the duration of the loan, the loan amount and your individual personal circumstances. We recommend that you obtain quotations from at least two other financial providers and compare these with Best Park Home Finance carefully before making any decisions.”

Best Park Home Finance also offers loans for buying holiday homes on Wyldecrest Parks, up to a maximum of £50,000 and for up to 15 years.

Why buy a park or holiday home on finance?

Most people who are buying a park home use capital from the sale of their previous property. But, if that is not possible, finance is an option.

Buying a holiday home on finance is very different. Many buyers who opt for finance for part of the purchase price of a holiday home do so because they would rather pay for it out of income than savings, to preserve their savings.

How does buying on finance work?

The first and most important task is to shop around. We found the following advice to set you on the right track:

Park home finance

Quickmove Properties has this advice: “If you require finance to purchase your new home, the park owner should be able to advise you on what is available through specialist finance companies.”

One broker that specialises in finance for park homes is Pegasus Finance. The service works with lenders, and guides you in obtaining both secured and unsecured loans.

Holiday home finance

Black Horse, the long-established finance provider in the leisure sector, offers finance for holiday home purchase. Black Horse explains, “Black Horse buys the holiday home on your behalf and owns the holiday home for the duration of the finance agreement. You'll agree an initial deposit, your agreement term, and your monthly repayments with the holiday park. Your deposit is taken from the price of the holiday home. You'll then pay the remaining balance plus interest in equal monthly repayments over the agreed term.”

The giant park group, Haven, works with both Black Horse and Santander to offer finance.

Sure Finance specialises in finance options for holiday home purchase. These include hire purchase, secured loans (using your main home as security), and personal loans.

Lyons Holiday Parks, which has 20 holiday parks in north Wales and Cumbria, offers this advice and sequence on obtaining finance for your holiday home: “Speak to an on-park sales advisor about your family’s needs and lifestyle goals. Discuss your budget and minimum/maximum spend with our team. Apply for a credit check through our third-party finance broker. Wait for the check to come back (usually around seven working days). Pay the deposit (usually 20%) and work out a monthly repayment plan. Sign on the dotted line.”

UK Leisure Parks, which owns 11 parks in Lancashire and Cheshire, can offer a range of finance options. UK Leisure Parks says, “Our specialist teams will be able to build a bespoke finance package to suit you. Deposits start from just 10%. Terms do vary according to your personal circumstances and finance is, of course, subject to status.”