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Park Homes: How to Finance Yours


park home finance

As average property prices continue to swell across the United Kingdom, more people than ever before are considering relocating to a park home. For many, it’s the appeal of downsizing to a luxurious and affordable property of a higher standard, perhaps in a far more desirable location. Perfectly possible to pick up a beautiful two-bedroom park home for less than £50,000 – around 75% less than you’d pay for a comparable house or flat in the same area.

Whatever the motivation, park home purchase volumes in the UK are at an all-time high.

But what about park home finance? What are the most popular and accessible static caravan finance options available? More importantly, is it possible to get a traditional mortgage on a park home?

Mobile Home Financing

Unfortunately, the answer is no – it isn’t possible to take out a traditional mortgage on a park home. The reason is that traditional mortgages are provided exclusively for the purchase of properties that also include ownership of the land the property is built on. With a park home or mobile home, you may be the full rightful owner of the property, but you don’t own the land upon which it resides.

As a result, standard residential mortgages are out of the equation. The same also applies to second mortgages, which fall under exactly the same rules as standard mortgages. After purchasing a park home, you continue to pay ground rent to the individual or organisation that owns the plot. Hence, you are never truly the owner of the land beneath or around your park home.

Specialist Caravan Finance

On the plus side, there are various alternative options to explore for financing a park home. Some of which involve no credit checks and no requirement to submit proof of income. Particularly for existing homeowners looking to relocate park homes, there are various accessible and affordable options to explore.

Away from the UK High Street, there’s an established and growing alternative lending section that specialises in flexible secured loans. Some offer loans specifically for the purchase of mobile homes, which for the most part work in exactly the same way as a traditional mortgage. A maximum of 80% of the value of the mobile home will be offered by the lender, meaning a 20% deposit payable on the part of the borrower. Though given the affordability of park homes, 20% deposit requirement isn’t usually the end of the world.

Park home loans that follow the same basic rules as mortgages are typically subject to the usual credit checks, along with proof of income and general financial status. Where bad credit is an issue, there are alternative options to explore such as bridging loans. 

A bridging loan could be used to tap into the equity of the borrower’s existing property, in order to pay for the park home outright and repay the loan in full when their former home is sold. Designed specifically for short-term applications, bridging loans can be uniquely affordable and convenient for park home purchases.

Compare the Market in Full

The UK’s specialist lending sector provides access to an extensive portfolio of loan products to suit all requirements and budgets. As a result, it’s important to carefully consider all options and compare the market in full, before deciding which way to go. If you have your sights set on a park home, consult with an independent broker and explore the options beyond the High Street. Even with an imperfect credit history or no formal proof of income, there are still countless various ways a park home can be financed in an affordable manner.

Last Updated: May 30, 2019 @ 2:27 pm
NACFB

UK Property Finance is Authorised by The Financial Conduct Authority (FCA)

Association of Bridging Professionals
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