As summer approaches and we look into making the most of our valued weekends and potential summer holidays, we weigh up the options of buying a rural or coastal retreat.
Based on the South Coast, we are in one of the best locations in the country, and have arguably some of the best views of the Isle of Wight and the Channel. Most of us appreciate the value of a weekend away, and a break from the norm, so having a respite can have many rewards and not just for the mind.
Since the introduction of the higher-rate Stamp Duty Land Tax (SDLT) for second homes, people have been put off buying holiday homes for their own benefit. The aim of the higher fee was to prevent investors snapping up homes and letting them out for a high profit, pushing first time buyers off of the property ladder.
Whilst this increase led to an insurgence of people pushing their purchases through before the increase came into effect, it is now beginning to level off and the market is settling down again.
Michele White, Residential Conveyancing Team Manager in Southampton says: “For potential second-home buyers, rather than paying for a coastal home or a town centre property, a viable option could be the ownership of a mobile home on a holiday park. As buyers wouldn’t be paying for the land that the property sits on, it is exempt from any form of Stamp Duty Land Tax, despite its’ value. As well as a great base for a weekend away, this kind of property will often benefit from a swimming pool or beach access, on-site bars, shops and even boat storage, depending on location.”
Michele continues: “Along with not having to pay SDLT, a park home can be an opportunity to provide a second income (Lease permitting) for holiday lets in good locations, with fairly low running costs. A pitch fee is usually paid to the park owner on a weekly, monthly or annual basis to cover running costs of water, sewage, electricity, and maintenance of communal areas including roads and swimming pools. Once this has been paid and any maintenance/cleaning costs covered, all profit is left to yourself, subject to tax regulations. Although most mortgage lenders do not lend against park homes, there are specialist agents who can provide finance in a similar way, giving an option for potential non-cash buyers.”