With rising house prices in the UK, the number of people now thinking about moving into a park or mobile home has increased over the last decade. In fact, almost ten years ago it was estimated that over 200,000 people in the UK lived in park homes*, and that number will have undoubtedly increased since 2009.
Static caravans, lodges, mobile homes, and park homes can be a great option for many reasons, with many people buying them in order to save money over buying a smaller bricks and mortar property.
With prices starting from as low as £40,000 for a two-bedroom mobile home, it can be a very attractive proposition for those wanting to get more for their money.
But if you haven’t got the money to spend on an initial park home investment, can you get a mortgage on a mobile home in the UK?
Unfortunately, you cannot get a mortgage on a park home or mobile home in the UK, like you can with traditional bricks and mortar properties. However, there are specialised lenders who will make finance available to help you if you need the money to buy a mobile home or similar.
Why can’t you get a mortgage on a park home?
Traditional mortgages as we know them in the UK are not available on mobile homes or static caravan purchases. You cannot apply for a mortgage to finance this type of property purchase.
It’s actually impossible to apply for a mortgage on a park home, and instead you will need to pay cash up front, either from your own savings, investments, or with the use of a bank loan or finance.
The reason being is that a mortgage on a building is secured against the Land Registry property listing for the home.
With a holiday lodge or park home you might own the dwelling itself, but you don’t own the land that the mobile unit sits on.
In most cases, the lease for the land that the mobile home is situated on will tend to be for a fixed term, and often with leisure dwellings, will only be for a certain time of the year.
Because of this, the length of any site lease would impact on the terms of any mortgage agreement upon which you financed the purchase of the property, in this case being a mobile or park home.
Can you get a second mortgage on a mobile home?
No, you cannot apply for a second mortgage on a mobile home either, as exactly the same rules and guidelines apply in this case too.
Instead you will need to have cash or finance to pay for the purchase.
Should you buy a park home on finance?
Joanna Ball who represents the National Association of Park Home Residents (NAPHR) had this to say on park home ownership in the UK:
“I love living in a mobile home. It’s almost maintenance free and very warm, due to good insulation, which keeps costs down. They’re cheaper than bricks and mortar properties yet offer as much space as a two-bedroom flat.”
Yes, they might be cheaper than traditional properties, but they can depreciate very rapidly.
Given the short-term lease nature of the land they also sit on, plus service charges it might not be the best fit for everyone.
As with any type of high-level purchase though, it’s entirely down to you whether you not you choose to buy a mobile home on finance or with your own cash.
Specialist mobile home finance companies
There are quite a few specialist finance providers in the UK who deal with finance for park and mobile homes, plus static caravan purchases.
Typically, they can lend up to 80% of the value of the mobile home with many loans being available for a maximum period of 15 years.
How much interest you pay will vary depending on your own personal circumstances, how much you want to borrow, how long you need finance for, and how much the static home will cost to purchase.
If you are thinking about applying for finance on a mobile home then we recommend that you shop around and compare the available finance deals, just like you would do on a traditional mortgage.
* Source: The Independent, 12thAugust 2009