Buying a holiday lodge as a second home

Holiday lodges make an ideal holiday home

All the lodges displayed on our website are offered by reputable lodge park developers and operators, who are members of one of the recognised trade associations and have developed a good track record in terms of the quality of the holiday parks they operate as well as a reputation for good customer service.

Buying a holiday lodge as a second home provides the attractive opportunity to enjoy a relaxed and luxurious lifestyle.  The majority of lodges on offer in today’s market are of high quality construction (either pre-fabricated to exacting standards or built individually on site) with all the facilities for modern living and more.

  • fully fitted kitchens with the latest high quality fittings and fixtures,
  • luxury ensuite bath/shower-rooms,
  • full gas central heating, double glazing and insulation,
  • co-ordinated furnishings packages to suit all tastes

Many also have internet connections, flat screen TVs, verandas/patios, hot tubs, car parking and plot landscaping.

However, there are a wide range of lodge products on the market – varying in size, accommodation, construction quality and internal specification – to suit all budgets and tastes.  There may be a selection of types of lodge even on the same park.  As well as the location of the holiday park itself, the facilities (or absence of them) provided by the park may well be an important factor for prospective owners, depending upon their needs and circumstances.

 

What you need to know about buying a holiday lodge

Once you’ve found your dream lodge, you must still look at the more down-to-earth, practical aspects of purchasing and be aware of some particular issues relating to lodge ownership.

Peter Smith, a specialist Chartered Surveyor with HLL Humberts Leisure, identifies some specific criteria to be aware of as you consider buying your holiday lodge: 

One-off Costs

In some instances, the park owner will require additional payments for costs associated with the initial siting or development of your lodge, or for additional extras not included as standard with the unit.  You may be asked to pay a siting or connection charge for the initial work needed to site the lodge on its base and/or for connection to the available services.

Internal changes to the standard specifications may involve further cost, and with certain lodges which come on an unfurnished basis the buyer will need to consider any available furnishings package (normally to include ‘white goods’, carpets, curtains, light fittings and other equipment).  However, many lodges nowadays are sold on an all-inclusive price basis.  External additions such as verandas and walkways/ramps may be counted as extras, as may hot tubs, landscaping works, patios, car spaces or garages.

Annual Charges

There is usually an annual charge, often referred to as the ‘pitch fee’ (or otherwise as ground rent plus a service charge), which is levied for the occupation of the pitch/plot as well as a share of the appropriate maintenance charges for the whole park. Often the invoice for the following year is sent at the end of the previous year and may include some form of early payment discount, but will almost always require payment by the beginning of the holiday season. Payments to the lodge park may also include other charges:

Rates – this will usually take the form of an amount apportioned out of the total non-domestic rates bill of the park operator for the whole park.  However in some circumstances (dependent on the type of lodge and how it is occupied) a Council Tax charge may be levied direct to the lodge occupier instead.

Water charges - (either an apportionment of the charge based on the Rateable Value for the park, or division of the amount due following a water meter reading. Some lodges may have individual meters)

Insurance – the park owner may offer a block policy arrangement for all owners on the park. Whilst you are not obliged to take up this insurance you must ensure that your lodge is insured adequately and may find that the park insurance is the most comprehensive policy provided at a reasonable premium.

Electricity – nowadays this is usually billed separately on the basis of individual meter readings for each lodge, either by the park or direct from the utility supplier.  The Regulator, OFGEM, have issued Regulations, effective from 1 January 2003, that a park operator may only recharge the cost of electricity and the appropriate proportion of any standing charges to individual residents without making any profit.  The charge must not include the cost of any electricity used by the lodge park operator. e.g. street lighting, maintenance, site office etc.

Other services – your lodge park operator may offer additional services on an annual payment arrangement, for example, a ‘drain-down’ plumbing service or external painting/varnishing work.

VAT – you are liable to pay VAT at 17.5% for the pitch fee/ground rent element and any additional services supplied.  However, you will only pay VAT at the lower rate of 8% on any standing charges or unit charges for the supply of electricity, water or gas.

It is strongly recommended that you ensure that you are aware of all the likely fees and charges for which you will be liable on an ongoing annual basis. You will also need to know at what point each of the charges are due, whether there is a bi-annual, quarterly or monthly payment option available and what the penalties may be for late payment.  You should bear in mind that the non-payment of all or part of the amounts due legally to be paid by you on a certain date may leave you open to recovery of interest and in extreme cases to the loss of the right to stay on the park.

Planning Considerations

Due to the complexity of the planning system, and given the fact that each park may have a long and varied planning history, there may be significantly different planning conditions that apply between lodge parks, even in the same Local Authority area.  The main conditions that may affect your occupation are as follows:

Holiday restrictions – whilst there is no statutory definition of what constitutes a ‘holiday’ use, the occupation of a lodge for residential use is likely to be strictly forbidden.  Lodge park owners are obliged to establish from you that you have another address as your ‘sole or main residence’ in the UK or abroad.  Normally, just an accommodation address with a relative, for example, will not be acceptable.  You may need to satisfy the Local Authority that you are not living permanently in the lodge.  If you have enrolled with a local doctor, or your children are registered with a local school, for example, the Local Authority may consider that you are occupying on a permanent basis. 

Seasonal restrictions –  Lodge parks are usually closed for only a limited period, and a season of 10½ months or 11 months is now commonplace, allowing you to enjoy your lodge during the winter months and over the Christmas and New Year period. 

Occupancy restrictions – In areas where the Local Authority wants to ensure no residential use or has a firm policy of maintaining tourism from holiday lettings rather than ‘second home’ ownership, there may be a restriction on consecutive day occupancy (for example, no more than 28 days at any time and/or no more than 6 months in any year).  Whilst it is difficult for Authorities to monitor the occupation of holiday units in their locality, it may be a requirement for the lodge park owner to maintain a note of occupancy available for inspection.  The terms of your agreement may well be breached if you do not comply with these occupancy restrictions.

Lodge parks with occupancy restrictions of this nature may well be most suited to ‘buy to let’ ownership, where the lodge owner will require only limited personal use of the lodge, with the remaining weeks made available for holiday letting.

Site licence restrictions – On lodge parks which are historically deemed ‘holiday caravan’ parks, there will be additional provisions set out in the Site Licence issued by the Environmental Health Department, particularly in relation to layout, spacing and fire safety issues.  Although completely different in appearance from the traditional holiday caravan, some lodges actually comply with the caravan definition in terms of size, prefabrication and transportability criteria.

Agreement Terms

Most holiday lodges are sold on the basis of a lease or licence agreement, either of which will give you a substantial number of years to enjoy occupation of your lodge.  Both types of agreement will contain terms of occupancy which you will need to comply with in order to ensure that you can continue with the use of your lodge, as non-compliance may in extreme cases result in termination of your right to occupy the pitch or plot. 

Agreements will generally include the following general terms: 

  • Identification of the parties to the agreement, the lodge/plot to be sold, the date of ownership/occupation and the length of the agreement.
  • The annual fees and charges to be paid to the park together with clear guidance on any other responsibilities (e.g. to insure the lodge, payment of water, electricity and gas supplies).  This will also make provision for any increases in charges, normally on a yearly review basis.
  • A clear definition of the terms of occupation, including the requirement to occupy on a holiday basis only (not for residential occupation) and the limits on season and consecutive day occupancy (if any).  In addition, occupation may be limited to family and friends, or for ‘over 50s’ (or similar) use, and therefore may not be suitable for sub-letting.  Some park operators will allow sub-letting for short term holiday use but require you to use a specific holiday letting marketing company or the park operator as your letting agent, together with an appropriate commission arrangement.
  • Terms for the maintenance and upkeep of your lodge unit, together with requirements to treat the exterior with varnish, paint or other application on a defined time cycle (e.g. every 5 or 7 years).
  • Terms relating to responsible use of the lodge, particularly with other lodge owners in mind, which may cover such things as speed and parking restrictions, avoidance of ‘nuisance’ to neighbours, arrangements of access to facilities on the park etc.
  • Terms to ensure compliance with planning conditions or Site Licence provisions.
  • Mechanisms for the resolution of any disputes.

The majority of agreements for lodges are on ‘tried and tested’ terms which your park owner will be happy to explain in more detail.  You will be given every opportunity to consider the terms offered, which ultimately are designed to ensure the smooth operation of the whole lodge park to the benefit of all occupiers.