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For many people looking to buy or sell a residential park home, one of the most surprising aspects of the process is a charge that doesn’t exist in the traditional housing market – the park home commission fee.
Under current legislation, when a residential park home is sold, the site owner is entitled to receive up to 10% of the sale price. The fee is normally paid by the seller once the sale completes.
To put that into perspective:
- A £100,000 sale results in a £10,000 commission payment.
- A £150,000 sale results in a £15,000 commission payment.
- A £250,000 sale results in a £25,000 commission payment.
As park home values have risen over the years, so too has the amount of money being paid through this commission system. What may have represented a relatively modest sum decades ago can now amount to tens of thousands of pounds on a single transaction.
This is one of the reasons why the UK Government is currently reviewing the commission charge and considering whether the existing system remains fair and fit for purpose.
Why Does the Commission Exist?
Unlike traditional housing estates, residential park owners are responsible for maintaining and operating private land and infrastructure.
This can include:
- Internal roads
- Street lighting
- Drainage systems
- Communal areas
- Site management
- Grounds maintenance
- General park upkeep
Historically, the commission fee was introduced as a way for park owners to generate income to support these ongoing costs without relying entirely on pitch fees.
The argument has long been that commission income helps keep monthly site fees lower than they might otherwise be.
Supporters of the current system believe it remains an important part of the financial model that allows residential parks to operate successfully.
Why Are People Calling For Change?
Many park home residents believe the system is outdated.
One of the most common concerns is that the commission is calculated as a percentage rather than a fixed amount.
As property values increase, the fee increases automatically.
For example:
A home that sold for £50,000 many years ago generated a £5,000 commission.
Today, a similar home might sell for £180,000, generating an £18,000 commission despite the administrative process remaining largely the same.
Critics argue that:
- The charge can significantly reduce the proceeds from a sale.
- It can discourage people from moving.
- It may affect affordability.
- Many buyers and sellers are unaware of the fee until they begin researching the purchase process.
For retirees who may rely on the equity in their home to fund later-life care, move closer to family, or downsize, losing 10% of the sale price can have a substantial financial impact.
What Is The Government Reviewing?
The Government’s review is looking at several key questions:
- Is the 10% commission still justified?
- Does it provide value for residents?
- How dependent are park operators on this income?
- What would happen if the commission was reduced?
- What would happen if it was abolished altogether?
No final decision has been announced, and the review remains ongoing.
However, the fact that the issue is being formally examined is significant in itself. Calls for reform have existed for many years, but this is one of the most serious reviews the sector has seen.
What Could Happen Next?
There are several possible outcomes.
Option 1: No Change
The Government could conclude that the current system remains appropriate.
In this scenario:
- Sellers would continue paying up to 10%.
- Park owners would continue receiving commission income.
- The existing model would remain unchanged.
While some residents would be disappointed, others argue that stability is preferable to creating uncertainty for park operators.
Option 2: Reduced Commission
Another possibility is that the commission remains but at a lower rate.
For example:
- 10% reduced to 7.5%
- 10% reduced to 5%
This would allow sellers to retain more of their equity while still providing park operators with income from sales.
A reduction would likely be viewed as a compromise between residents and site owners.
Option 3: Commission Abolished
The most dramatic outcome would be the complete removal of the commission fee.
For sellers, this could be extremely positive.
Using a £150,000 sale as an example:
Current system:
- Sale price: £150,000
- Commission: £15,000
- Seller receives: £135,000
Without commission:
- Sale price: £150,000
- Commission: £0
- Seller receives: £150,000
However, removing the commission entirely could create challenges for park operators who currently rely on this revenue.
Many industry observers believe that if commission were removed, alternative methods of generating income would likely be considered.
Could Site Fees Increase?
One question often raised is whether pitch fees could rise if commission income falls.
The reality is that nobody yet knows what the long-term effects would be.
Some park operators argue that commission income helps support the running of the park and reduces pressure on pitch fees.
Others suggest that greater transparency would be achieved if costs were recovered through site fees rather than a large charge applied when a home is sold.
This is one of the key areas the Government review is expected to consider.
What Does This Mean For Buyers?
Although the commission is usually paid by the seller, buyers are not completely unaffected.
Changes to the commission system could influence:
- Asking prices
- Availability of homes for sale
- Market activity
- Park operating models
- Future pitch fee structures
If sellers retain more of their proceeds, more homeowners may decide to put their homes on the market, potentially increasing the number of properties available to buyers.
What Should Sellers Do Right Now?
At present, nothing has changed.
If you are considering selling a residential park home today:
- Assume the existing commission rules still apply.
- Check your Written Statement and park documentation.
- Understand how the commission affects your expected proceeds.
- Stay informed about future Government announcements.
Most importantly, sellers should factor the commission into their financial planning before agreeing a sale.
The Bigger Picture
The 10% commission charge has become one of the most discussed topics in the residential park home sector.
For some, it is a necessary source of income that helps maintain parks and services.
For others, it represents an outdated system that no longer reflects the modern market.
Whatever your view, the Government’s review could shape the future of park home ownership for years to come.
Whether the result is no change, a reduced commission, or a completely new system, the outcome will affect homeowners, buyers, sellers, and park operators across the UK.
The question now is simple:
Should the 10% commission remain, be reduced, or be abolished altogether?