Buying a Mobile Home on a Holiday Park?
Don't get me wrong. The homes themselves are so beautiful. Being able to go away whenever you llke is truly seductive. The parks? Can be a bit rowdy at times especially if they have lots of holiday lets but on the whole they are really good. So what's the problem? The problem is they rip you off and they rip you off big time - moreover, there is an alternative which I will go into fully in my next blog.
Lets, first of all, look at the question of park sales price versus recommended retail price on new homes. The Willerby Brockenhurst might be a good middle of the range starting point. I am sure you will agree it is a beautiful mobile home.
Great Yarmouth Holiday Park Price: £46.744
Recommended Ex Works Retail Price: £33,360
I am sure you will also agree that, that is a hefty mark up! Even so, the retailer is entitled to his profits and there will be delivery and connection costs involved. So let's look at those. Willerby are based in Hull and that's an awkward trek. We shall be generous and allow £3,000. Then of course the caravan has to be connected to the mains. Well to be fair 'plugged in' would be a more accurate description for the task but even so, we will again be generous and allow them £500. This will still leave them £9,884 profit, out of which they will pay a very nice commission to your new best friend - the park salesman. 'Fair enough!' I hear you say, and I would agree with you if this were their true profit. The key is in the wording 'Recommended Retail Price'! The parks are wholesalers. They pay nowhere near the recommended retail price and you can probably add another £10,000 for their retail mark up on the wholesale price bringing their profit much closer to £20,000! Finance is an added bonus and you can rest assured they will encourage you to avail yourself of the opportunity to pay for your caravan on the never, never (an apt phrase which I have chosen carefully)! More profit with which to line their very deep pockets. Of course they are going to be nice people and you are probably going to get the best pitch on the site, albeit temporarily and at slightly inflated site fees.
OK - so let's assume that your business is going great guns, you can easily afford it and all things considered you just have to have that mobile home and there it is - complete with a welcome bottle of cheap bubbly and a free coffee from the machine in the 'owners lounge'. You are now one of the special ones! The entertainment team know you by name, your kids are always called up on stage for the games and you get access to the pool an hour before everyone else. That very special first year flies by and you are not in the least bit bored with visiting the same site every weekend. Even better, the wife is as brown as a berry having spent the entire summer holidays there and the kids are swimming like fish. Life is good and you are so looking forward to the special owners New Year's Eve party. Site fees have gone up a bit since last year and are now just over £4,000 - only to be expected - and there is a £100 charge for the compulsory electrical check, a £100 charge for the gas check, £200 plus for insurance and £350 for the rates. So all in all you're looking at about £4,850 plus the misses wants to have the wrap around decking which everyone else seems to have, another £4,500 as you can only use the site approved decking providers. Oh, and you are sick of storing the kids bikes and stuff in the caravan so you are going to need one of the storage box/shed thingy's which also have to be purchased through the site and they are £600. Wow - we're looking at another £10,000 plus! Not to worry - the park have a guaranteed letting option. We'll do that and re-coup some of the cost. Meanwhile, the site is closed for a month and you are having withdrawal symptoms.
The park re-opens in February but the facilities are closed until Easter. Never mind, you make the weekly trek because it is relaxing and also because it is a huge investment and you are determined to enjoy it! What's more bookings are starting to come in. It's a shame because the popular weeks are the same weeks that you wanted to go. Never mind - Easter alone has produced an income of £2,100 less £400 commission for the park and the cost of gas and electricity. Scale that up and you could get £5,000 (less 20%) for the summer holidays and a further £1200 for the two half terms - almost there! Only thing is you wanted to go for the school holidays - that's the main reason you bought it and now the misses is talking about a holiday in the sun somewhere. Oh well, can't win. Just pay up and hope the tax man is kind this year. So you make your usual weekend trip just before Easter, unload everything personal from the caravan (which takes an age) and clean it to within an inch of it's life. You can't wait to go back there after Easter and whilst expecting it not to be exactly as you left it - there's a large wine stain on the sofa and someone else's kid has wet the bed! You find yourself unable to convince the owners' team that the stains were not already present and now you are dreading the next let! What's more its taken half the first day to put all your things back! Suddenly, your second year of ownership is not as idyllic as the first, but its still good and you're glad you took the plunge.
Year three arrives with the accompanying bills. At least you don't have to pay again for the decking. Only problem now, yours is no longer a new caravan and it is sitting in the section of park reserved for such. You have been informed that you will need to upgrade your mobile home or settle for a different pitch. At least though, that will be a bit cheaper. Sadly not, the park have reluctantly had to increase fees and this year, even with the slightly inferior pitch, you are going to have to fork out a bit more. The caravan also needs a professional clean and if the stains won't come out of the carpets you will have to have them replaced. To make things even worse, business has been a bit slower this year and even though it's a couple of months past the 'pay monthly' deadline you are going to have to contact the park and put a payment plan in place. Up goes the park 'sucker on the line' antennae. All instalment arrangements have to be put in place by September. It's January now and the park would like payment as per the terms of your contract. You remain calm, reason with them, offer to pay the instalments up date - all to no avail. A few days later a letter arrives from the park. You are in breach of contract and if your site fees are not settled in full within the next fourteen days your mobile home will be removed from its pitch and placed in storage. Storage fees are £75 PER DAY! Panic sets in and you call them again. Can I please sell my mobile home back to you. Friendly salesman on the end of the line apologises profusely. Sales are slow this year and no the site does not want your mobile home back. Best thing he can offer is that if you sign it back over to them for free at least you will stop incurring the £75 per day storage fees. You bristle with anger and resolve to sell it privately, as is your right. Only problem here is, all prospective buyers have to be vetted by the park - in private! This is their opportunity to explain to them that buying directly from you will incur a £500 per year premium on top of their site fees and that your buyer would therefore be much better off with a special deal they have to offer on one of the park's own mobile homes.
I believe this practice to be illegal under legislation introduced in 2013. (I am not a legal expert and have no association with Fosters but their web page is helpful and very informative.)
Desperate, you call one of the many mobile home buying companies you've spotted on the web. You send pictures. You tell them that you paid just under £47,000 for the mobile home just two years ago. They patiently explain that the brand new retail price of your lovely mobile home was £33,000 and that wholesale prices are £10,000 cheaper than that. What's more you have let your mobile home out and it will therefore no longer be new or pristine. Best they can offer is £15,000 and if you are running up storage fees, these will have to be paid out of the £15,000 before the park will allow your caravan to leave site. You are now between a rock and a hard place and my advice would be to tell the site you are selling for £15,000 and try to negotiate a better price with them or at least get the storage fees dismissed. In any case - get it over and done with as quickly as possible.
As I said, never, ever, be tempted to buy a caravan on a mobile holiday home park!
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.