Ownership


Having your own holiday home in a beautiful location is a dream many people aspire to. In recent years holiday lodges in the Lake District have become extremely popular and can be a much more affordable option compared to owning traditional bricks and mortar. Holiday lodges are located on a number of holiday parks across the region. However, it is important to understand that the purchase of a lodge is not the same as buying a house.

This is the main reason why Lakes District Lodge Sales was set up – to give potential purchasers independent guidance on the buying process and bringing together information about all the parks where you can potentially own your holiday lodge.

Below we will take you through the typical buying process and how it differs from house conveyancing.

Holiday Parks

Your lodge will be located on a holiday park. The park owners own the land and allow lodges to be sited on pitches and grant a licence in return for paying an annual ground to locate the lodge there. The price for the licence will vary (see later) just as parks will vary in size. They could be owned by local family businesses or larger regional or national companies.

The Purchase

In the vast majority of cases you will have to buy a brand new lodge through the owners of the park. Prices will be based on the specification and occasionally the location within the park itself. If there are empty pitches available you may be able to have a lodge built to your own personal specification.

As lodge ownership has become more popular some parks have ‘pre owned lodges’ which can be bought and sold on the open market.

Because you don’t own the freehold land and pay an annual licence, many estate agents don’t get involved in the private sales process. This has to be conducted via the park itself and agreement reached between the vendor, buyer and park. We also cater for this ‘secondary’ market here and list a number of pre-owned lodges that are for sale.

Licence Agreement

Wherever you buy a lodge you will enter into a licence agreement with the park owner. This effectively allows you to have use of a pitch where your lodge stands for a pre-defined number of years subject to you paying various costs to keep it there whilst following park rules for ownership.

Fixed Running Costs

  1. Site fees/ground rent. This is a fixed amount payable annually (usually in advance). These fees are reviewed annually and there may be a provision for increases in line with inflation the licence agreement
  2. Rates and water rates. Local Authority & Regional Water rates are payable and will usually be the same for each lodge on the park (irrespective of size or location).
  3. Insurance. There are a number of companies who offer suitable insurance cover and the cost will vary dramatically. A new 2 bed lodge may be £400 as an example. At the time of writing because this is a specialist policy we don’t know of any comparison sites to go to. We do know that the insurance offered by parks themselves can be up to double the cheapest. It isn’t always the best either. We can provide a list of known insurance providers for you to shop around. Care should be taken in relation to exclusions such as flood damage given the damage caused in both November 2009 and more latterly December 2015 (Storm Desmond). Variable running costs
  4. Gas and electric. Unlike the open consumer market, utilities are usually ‘sold on’ by the park and metered (although for gas some parks only provide bottles at a fixed price). Electricity prices are regulated by OFGEM so there can be no mark up charged. LPG is different and parks can mark up the price. You should be able to see what the pricing structure is. Of course the overall cost will depend on how much you use the lodge and whether you rent it out.
  5. Maintenance and repairs. The appeal of a holiday lodge is the wooden construction which, although tantalised, needs regularly treating to prevent weathering (do bear in mind that the Lakes is a pretty wet place!). The lodge will need varnishing probably every 2 years. A typical cost is £1500.
  6. Boiler service/annual drain down. Planning restrictions within the Lake District mean that holiday lodges cannot always be used 365 days a year. A lodge will therefore require a winterisation drain down at typically £100. Add to that a regular annual boiler service at £100.

The list above may not be every cost you will encounter in keeping your holiday lodge. However, it will give you an idea of what the on-going costs are likely to be.

Finance

For those who haven’t got their own funds to buy a holiday lodge there are limited ways to raise finance.

If you are a homeowner with equity in your property, by far the cheapest way is to arrange a further advance or re-mortgage on your main residence or another property. Affordability will be assessed based on your personal income.

A mortgage cannot be arranged on a holiday lodge. It is possible to borrow typically 50% of the purchase price of a brand new lodge only. These tend to be at more expensive personal loan rates with a maximum term of usually 15 years. This is something we recommend prospective purchasers avoid.

If you are going to rent out your lodge then it is possible to cover some or all of the finance costs in addition to other fixed costs.

Renting out

Many people consider renting their lodge to cover or offset the annual running costs. This may or may not be allowed by the park. If it isn’t then clearly you will need to pay be able to afford a hefty annual outlay to maintain your holiday lodge.