Park home downsizers face up to £16k resale levy thanks to 'archaic' land law

Darren and Julia Morris say they love their new lifestyle, but feel  'trapped' by the resale levy <i>(Image: Julia Morris)</i>
Darren and Julia Morris say they love their new lifestyle, but feel 'trapped' by the resale levy (Image: Julia Morris)

DOWNSIZERS who bought a £160,000 mobile home in Middlewich will have to surrender up to £16,000 to the site owner if they decide to sell-up.

Darren and Julia Morris sold their four-bedroom house in Stoke-on-Trent in 2017 and bought their park home with the proceeds, as a way for them to retire mortgage-free.

Julia, 64, who worked in the NHS for 40 years, says their new life ‘took a bit of getting used to’, but affords them 'a much nicer way of life’.

However, they're now worried should they have to sell up for health reasons, decide to move closer to their children, or even have issues with the management of their park home site, they face losing a huge chunk of their precious equity.

This is down to the Mobile Homes Act 1983, which states site owners are entitled to 10 per cent of the sale price every time it's sold, despite charging monthly ground rent for the land.

Julia says she feels this important issues affecting park home owners across the country is just being ignored.

She said: “Because we’re a minority of the population, not many people are interested in how we get by.

"It seems everyone in authority shies away because we live on private land, yet we still pay council tax.

“We also pay ground rent every month, which goes up every year in line with the consumer price index. It varies from site to site, but ours is £185 a month. Our mortgage was less than £400.

“I’ve talked to people who didn’t realise they’re obliged to hand over 10 per cent of their equity to the site owners until the day they move in.

“Those who use a conveyancing solicitor would know, but it’s not compulsory when you buy a park home."

A report by the House of Commons published in September 2023 states the ‘general justification’ for the levy is what is actually sold is 'an amalgam of the value of the park home and the value of the site on which it is placed'.

The report adds: “Site owners regard the charge as an important source of income which allows them to reinvest in the parks, and maintain higher standards without additional costs for park home owners.”

But Julia says she doesn't understand the logic of what amounts to being obliged to both rent and buy the same piece of land at the same time.

She added: "This doesn't happen with any other kind of property sale. And every time it's sold, the site owner gets their 10 per cent again, and again, and again."

The Park Home Owners’ Justice Campaign are battling to have what they call this 'archaic law' overturned.

A spokesman said: “Residential park homes sell for anything up to £500,000, which means when sold, the site owner gets a windfall of up to £50,000.

“Residents are prisoners in their own homes because after losing 10 per cent of their equity, they can only afford something inferior to what they already have.

“If they should need to go into care, this loss of equity seriously curtails the amount and quality of care they can afford.”