Can You Get a Mortgage on a Park Home? Park Home Finance Explained
If you’re thinking about buying a residential park home, one of the first questions you may have is: can you get a mortgage on a park home?
The short answer is that a conventional residential mortgage is generally not available for a park home in the same way it is for a traditional house or flat.
That does not necessarily mean you have to fund the entire purchase from existing savings. Park homes are bought in several different ways, including using the proceeds from selling another property and, in some cases, alternative or specialist finance.
Understanding why park home finance works differently can help you set a realistic budget before you begin searching for your next home.
Can You Get a Mortgage on a Park Home?
For residential park homes in England, official guidance from the Leasehold Advisory Service (LEASE) states that it is not possible to get a mortgage on a park home in the conventional sense.
The main reason is the way park home ownership works.
When you buy a traditional freehold property, you usually purchase both the building and the land associated with it. A mortgage lender can therefore take security over that property.
With a residential park home, you normally own the park home itself but not the land or pitch underneath it. Instead, you have an agreement that gives you the right to keep your home on that pitch.
Because of this different ownership structure, mainstream residential mortgages do not normally work for park homes in the same way they do for bricks-and-mortar property.
This distinction is important to understand before arranging viewings or making an offer, particularly if you were expecting to fund the purchase with a conventional mortgage.
Why Is Financing a Park Home Different?
A residential park home is a home designed for permanent residential use and positioned on a site that should have the appropriate residential planning permission and site licence.
Although the park home belongs to you, the pitch it stands on normally belongs to the site owner.
Your right to keep the home on that pitch is governed by an agreement with the site owner.
For qualifying residential park homes, this includes important rights and responsibilities relating to matters such as:
- the pitch
- pitch fees
- services
- site rules
- your responsibilities as the homeowner
- the responsibilities of the site owner
Before purchasing, buyers should therefore look at more than just the physical home.
The park, its residential status and the documentation associated with the pitch are all important parts of the purchase.
How Do People Pay for Park Homes?
Although conventional mortgages are generally not available, there are several ways buyers may fund the purchase of a residential park home.
1. Buying a Park Home With Cash
Some park homes are bought without borrowing.
A buyer may use:
- existing savings
- investments or other available funds
- an inheritance
- money released from another asset
Buying without finance removes the need for monthly loan repayments, but it is still important not to commit every available pound to the purchase itself.
You should also budget for the ongoing costs of living in the home, maintenance and unexpected expenditure.
2. Selling an Existing Property
One common route is to fund a park home by selling an existing house or flat.
Residential park homes can sometimes cost less than the conventional property a buyer is selling, which may make them attractive to people looking to downsize.
For example, someone selling a larger family property may decide to use part of the proceeds to purchase a park home outright.
However, the figures should be considered carefully.
The purchase price of the park home is only one part of the overall financial picture. Your future pitch fees, utilities, council tax, insurance and maintenance costs should also form part of the decision.
3. Park Home Loans and Specialist Finance
LEASE states that some lenders offer loans to finance a park home purchase.
These are not the same thing as a conventional residential mortgage.
Different providers may have different requirements covering matters such as:
- affordability
- income
- credit history
- amount borrowed
- repayment period
- applicant circumstances
- the particular home being purchased
There is no single set of terms that applies to all park home finance.
If you’re considering borrowing, compare the total cost of borrowing, not simply the monthly repayment.
Look at any interest, fees, repayment period and early-repayment conditions before agreeing to anything.
4. Personal Borrowing
Depending on the amount required and the buyer’s circumstances, other forms of borrowing may also be considered.
Again, this should not be confused with a traditional residential mortgage.
Borrowing money increases the overall cost of buying the home, and affordability should be considered alongside your regular living costs.
If you’re uncertain about an appropriate form of finance, consider taking independent financial advice before committing to borrowing.
How Much Deposit Do You Need for Park Home Finance?
There is no universal deposit requirement that applies to every form of park home finance.
Requirements can differ considerably between finance providers and products.
A provider may consider factors including:
- the purchase price
- how much you want to borrow
- your income
- your existing financial commitments
- your credit history
- your age and circumstances
- the term of the proposed borrowing
For this reason, be cautious of general claims that all park home finance requires a particular percentage deposit.
Always check the current terms directly with the provider you are considering.
What Should You Check Before Financing a Park Home?
Finding a way to finance a home does not necessarily mean that particular home is right for you.
Before committing to a purchase, investigate the property and the park itself.
Check That the Site Is Residential
If you intend to use the park home as your main residence throughout the year, check that it is on a site authorised for residential use.
Residential park homes and holiday homes are not the same thing.
A holiday caravan or holiday lodge should not automatically be assumed to be suitable for permanent residential occupation.
Understand the Pitch Agreement
A residential park home owner will normally have an agreement governing their right to keep the home on the pitch.
The written statement associated with the agreement contains important information about your rights, responsibilities, pitch fee and services.
Read this documentation carefully before committing to the purchase.
Check the Current Pitch Fee
Owning the park home does not remove the ongoing cost of the pitch.
A pitch fee is a regular payment made to the site owner for the right to keep the park home on the site.
Before buying, establish:
- the current pitch fee
- how often it is paid
- what it includes
- when it is reviewed
- which costs are charged separately
Do not base your budget purely on the asking price of the home.
Consider a Park Home Survey
A survey is not compulsory when buying a park home, but official guidance recommends considering one, particularly for a pre-owned property.
A specialist survey may help identify issues such as:
- damp
- structural problems
- roof problems
- deterioration
- maintenance requirements
Discovering problems before completing a purchase can give you a much clearer picture of the home’s condition and potential future costs.
What Other Costs Come With Owning a Park Home?
Whether you’re using savings or finance, work out the total cost of ownership rather than focusing solely on the purchase price.
Pitch Fees
Park home owners normally pay a regular pitch fee to the site owner.
The services included should be stated in your agreement.
Pitch fee reviews are subject to specific rules, so make sure you understand both the current charge and the review process.
Council Tax
Residential park homes are subject to council tax.
The precise amount depends on the property’s council tax band and local authority.
Utilities
You should also budget for utilities such as:
- electricity
- gas or LPG where applicable
- water
- sewerage or drainage
How these are supplied and billed can vary between parks.
Some residents pay suppliers directly, while some services may be supplied through the site owner.
Park Home Insurance
Residential park homes require suitable insurance.
When comparing policies, make sure the policy is designed for a residential park home rather than assuming ordinary buildings insurance or holiday-home cover will be appropriate.
Maintenance
You are responsible for maintaining your home.
Depending on its age and condition, this may eventually include expenditure on areas such as:
- exterior walls or cladding
- roof maintenance
- windows and doors
- heating
- plumbing
- insulation
- decking
- general repairs
A lower purchase price does not necessarily mean lower long-term costs, particularly if the home requires substantial work.
Should You Use a Solicitor When Buying a Park Home?
Using a solicitor or other legal professional is not compulsory for every park home purchase, but official guidance recommends getting professional advice.
Buying a park home involves different documentation and legal arrangements from buying a traditional house.
An experienced professional can help you understand documents such as the written statement and pitch agreement and identify issues that may not be immediately obvious.
That can be particularly valuable if you’re buying a pre-owned home or are unfamiliar with the park home sector.
Can Pensioners Get Park Home Finance?
There is no single eligibility rule covering every park home finance provider.
A provider will apply its own criteria when considering an application.
Retirement does not automatically answer whether someone will or will not qualify. A lender may consider factors such as income, affordability, the amount required and the proposed repayment period.
If you are retired or approaching retirement, consider how repayments would fit alongside your long-term income and other regular costs.
Is Park Home Finance the Same as a Mortgage?
No.
This is one of the most important distinctions for prospective buyers.
A conventional residential mortgage is normally secured against conventional property and its associated legal interest in land.
Park home ownership works differently because you normally purchase the home but not the pitch underneath it.
Products marketed as park home finance or park home loans should therefore not automatically be compared directly with a standard residential mortgage.
Check exactly what type of borrowing is being offered and what the total cost will be.
Park Home Mortgage and Finance FAQs
Can you get a normal mortgage on a park home?
Generally, no. Official park home guidance explains that conventional mortgages are not available in the normal way because you own the park home itself but not the pitch or ground underneath it.
Can you borrow money to buy a park home?
Potentially. Some lenders offer loans that can be used to finance park home purchases. Availability and eligibility depend on the provider and your individual circumstances.
Can I use money from selling my house to buy a park home?
Yes. Some buyers fund their park home purchase using the proceeds from the sale of an existing property.
Do you need a deposit to buy a park home?
If you’re buying outright with your own funds, there is no loan deposit in the conventional mortgage sense. If you’re using finance, any upfront contribution will depend on the individual provider and product.
Are park home finance rates the same as mortgage rates?
Not necessarily. Park home loans and alternative finance are different products from standard residential mortgages. Interest rates, fees, terms and the total amount repayable can therefore differ.
Do I own the land when I buy a residential park home?
Normally, no. You buy the park home itself and have an agreement giving you the right to keep it on a pitch owned by the site owner.
Do I still have to pay pitch fees if I own the home outright?
Yes. Owning the physical park home does not normally mean you own the pitch. Residential park home owners generally pay a regular pitch fee to the site owner.
Should I have a park home surveyed before buying?
A survey is not compulsory, but it is recommended, particularly when purchasing a second-hand park home. It can help identify potential structural, damp, roofing or maintenance issues before you buy.
Finding a Park Home Within Your Budget
Understanding how park home purchases are funded is an important first step, but the asking price should never be considered in isolation.
Think about:
- how much you can comfortably spend
- whether you need to borrow
- ongoing pitch fees
- utilities
- council tax
- insurance
- maintenance
- your longer-term financial position
Once you have a realistic budget, you can start comparing homes based on both their purchase price and their ongoing costs.
360 Park Homes brings residential park homes for sale across the UK together in one dedicated marketplace. Browse available homes, compare key details such as asking price, location, home size and pitch fees, and contact advertisers directly when you find a property that interests you.
Browse park homes for sale or read our complete guide to buying a park home before starting your search.
This article provides general information only and does not constitute financial or legal advice. Finance products, eligibility and terms vary between providers. Park home legislation also differs across England, Wales, Scotland and Northern Ireland, so seek appropriate professional advice where necessary.
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