Have you ever dreamt of waking up every day in your favourite holiday spot, turning your vacation into a staycation?
If so, you’re not alone. Many people ponder the question: Can you live in a holiday home all year round?
In this article, we’ll delve into this topic, exploring the legal, practical, and financial aspects of making a Holiday home your permanent residence.
Understanding Holiday Homes
Let’s start by answering the question: What is a holiday home? A holiday home is a property owned in addition to a main residence and used for leisure and holiday purposes.
These homes can take various forms, from mobile homes like static caravans, lodges, Park homes and traditional brick-built residential houses. Over the years, holiday homes have gained popularity in the UK, with many people investing in them for a change of scenery, to generate some extra income or as a retreat from their busy life.
Different Types of Holiday Homes
Brick-Built Residential Houses: These are standard houses or cottages that are used as a second home. They offer more space and are typically located in popular holiday destinations, providing the comfort of a traditional home while being situated in a desirable location.
Park Homes: Park homes are situated on a residential park and mostly used to live in all year round but some will be used as holiday homes or holiday lets.
Static Caravans and Lodges: These are typically found within holiday parks and offer a cosy, compact living space. They are more affordable and perfect for those who love the community feel of holiday parks and enjoy being close to nature.
Which one can you live in?
You will be able to stay in all of these properties, for short breaks, and holidays.
But many are not suitable for ‘living in’ all year round.
All permanent homes will have a use class, issued by the local planning authority. The majority of homeowners have just one property that they use as their permanent and main residence.
But second homes, or holiday homes, can often have additional occupancy restrictions placed on them. These are often referred to as a Section 106 restriction.
At a very basic level these could only permit the property to be used for short stays, or holidays. This would prevent anyone from living there permanently.
This is an important issue to understand if you are buying a holiday home with the intention of eventually retiring there. If it has a 106 restriction, this is unlikely to be permitted.
When we look at holiday parks, many are open for just 10 months of the year. Your property type would depend on the specific park, but would most likely be a static caravan, or wooden lodge/chalet. They close the park for two months, usually during the winter, and will use this time for maintenance and improvements. But even the ones that are open all year round don’t allow you to live on the park permanently.
Here’s what Park Leisure says:
You can’t live on a holiday park permanently. You must have a main address as your permanent residence, which your holiday home cannot be. Strictly speaking, your holiday home should be for recreational and holiday purposes.
Is it possible to live in a caravan all year round?
Static caravans are not always made for all year round living. This means that there may not be adequate insulation to comfortably spend a winter there. However, newer caravans will be better insulated and more suitable. It’s important to look into this before you commit to buying one. But even if your caravan is suitable, all year round occupation may not be permitted by the park owners.
Here’s what Haven says:
…in the UK it is perfectly legal to live in a static caravan permanently on your own private land (subject to planning permission) or in a residential park that permits it. …we don’t currently offer our owners the chance to live on our parks all year round.
The Appeal of Living in a Holiday Home
Living in a holiday home all year round might sound like a dream come true.
Imagine having the freedom to enjoy your favourite holiday spot whenever you want, without the need to book accommodation or plan travel logistics.
Here are some benefits of living in a holiday home:
- Cost: Depending on the location and type of property, a holiday home can be more affordable than a traditional house, especially in high-cost areas.
- Lifestyle: Living in a holiday home can offer a relaxed, slower-paced lifestyle, often in a scenic or coastal location.
- Location: Holiday homes are typically located in desirable areas, such as near the beach, in the countryside, or close to tourist attractions.
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What mortgage do you need to buy a holiday home?
A mortgage is a long term loan where the lender takes a formal legal charge over the property as security. For this to happen the property needs to be registered at Land Registry and be freehold or leasehold.
For mortgage purposes, this necessarily rules out static caravans and park homes as you do not own the land your home sits on, it is merely rented to you. In addition, these homes will gradually go down in value as they get older, and at some point the park owner could demand that they be removed due to their age or condition. (at your cost, as the caravan owner).
These properties could not be financed with a mortgage but an unsecured loan or hire purchase (HP) agreement are two alternatives.
This leaves us with lodges and houses or cottages owned as freehold or leasehold.
Wooden lodges
Wooden lodges and wooden chalets are often situated within a private holiday park setting.
Set amongst mature trees, bushes and shrubs it’s a fine setting for a holiday home. Depending on the specific site, there may also be an on-site luxury spa, a pool, shop, restaurants and entertainment.
What more could you want?
Wooden lodges can be bought from a current owner, or you could choose to have a brand new one built.
But unfortunately you won’t be able to live in it permanently, or get a mortgage to buy one.
Many holiday parks have restrictions on using a holiday home as a main residence. This is often due to the terms of their own site licence which prohibits living there permanently.
Freehold and leasehold holiday homes
If you currently own your own home then it will be registered as either freehold or leasehold.
In England the majority of houses and cottages are freehold and the majority of flats and maisonettes are leasehold. When you purchase one of these properties your details will show on Land Registry as the owner, and you will be able to apply for a mortgage.
Whether you can live in it permanently will depend on any occupancy restrictions that have been registered.
These restrictive covenants are often enforced by the Local Authority. They can be worded in different ways, depending on how the Local Authority wants to control how the property can be used. There’s no standard restriction, so each one has to be looked at individually to determine whether the property is suitable for its intended purpose.
As an example:
12 months holiday let use only, with a maximum occupancy of 30 days by one “occupant”.
This property is restricted to short term lets only, such as holiday letting or serviced accommodation. You will be unable to live in it permanently, it cannot be used as a buy to let and you won’t be able to get a standard mortgage approved.
Only to be used as a main dwelling for one person or family.
This property must only be used as a main dwelling or residence, for a single family. It cannot be used as a buy to let or a holiday let. The only permissible mortgage will be a standard residential mortgage.
Which mortgage?
The type of mortgage you will need, if it is possible to get one at all, will depend on how you will use the property. The mortgage agreement that you sign will confirm the permitted usage allowed by the lender.
Put simply:
If you bought a property using a second home mortgage, it needs to be used as a second home.
Not a holiday let, and not a main residence.
Leases
If the holiday home is leasehold you need to check that the lender is happy with the number of years left to run. Most will stipulate that there needs to be at least 40 years to go once the mortgage has ended.
Related: What you should know before you buy a leasehold home
Can a holiday home be changed to a main residence?
If this is not prevented by any restrictive covenants, it should be perfectly feasible.
Any mortgage already in place will need to be changed to a standard residential mortgage.
How can a broker help?
I think you’ll agree that it is not a straightforward procedure when there’s a mortgage involved.
If you’re considering making a holiday home your permanent residence, it’s important to get professional advice, both for the mortgage and the legal aspects.
Respect Mortgages works with one of the UK’s largest and most trusted, independent mortgage brokers. They have all the knowledge and contacts needed to get you matched with the best lender.
Give us a call on 0330 030 5050 and we will arrange for a qualified adviser to contact you for a free initial discussion.
Or, complete our nifty online form instead.
Also in this section
Holiday Let Guide
Holiday Let Remortgages
Limited Company Holiday Let
Mixed-Use Holiday Let
Multi-Unit Holiday Let
This post first appeared on Respect Mortgages - Be In The Know, please read the originial post: here
