Buying a holiday home? Make sure it's mobile

The demand for upmarket caravans is rising, thanks to their desirable and affordable locations as well as ease of purchase. Maryrose Fison reports

En-suite bathrooms, hot tubs and swimming pools might not be ordinarily associated with properties priced under the £50,000 tag.

However, a new wave of upmarket holiday complexes has raised demand for mobile homes that looks set to radically change attitudes towards buying holiday properties.

With the pound still weak against the euro, increasing awareness of the environmental effects of flying and bank-lending measures tightening the housing market, many property experts are now pointing in the direction of the once maligned caravan sector as an area ripe for new growth.

The UK's most luxurious mobile home was sold last week to a buyer in the Welsh coastal town of Abersoch for £550,000. Its functions can be controlled electronically using a mobile phone miles from the property and it has eco-friendly credentials. But most caravans can be purchased for considerably less while offering as much, if not more, space than the traditional holiday cottage.

Jon Boston, a spokesman for the British Holiday & Home Parks Association (BH&HPA), which represents the mobile homes industry, says prices range from £15,000 to more than £300,000, with a brand new, fully modernised caravan typically costing between £30,000 and £40,000. Set against holiday cottages with the same number of bedrooms and household facilities, the gains can be substantial, he says.

"In a popular holiday hot spot like Dorset, you could pay £50,000 for a caravan holiday home on the seafront in an area you would expect to pay 10 times as much for a bricks-and-mortar cottage that is possibly smaller in size and comes with all the attendant problems of a holiday cottage."

The latest figures from leading mobile home operators show demand for caravans is surging. Haven holday Homes, one of the UK's largest holiday park operators with 24,000 caravans across 35 parks, estimates a 75 per cent increase in caravan purchase queries last year and this year the number of people renting caravans has already risen 11 per cent compared with the same time last year. A similar story is seen at Park Holidays UK, another large caravan park operator, whose sales rose 15 per cent in 2010.

But as well as offering value for money in terms of space, caravans offer a potential second income stream – albeit a modest one – through rental and subletting. Buying caravans to let during peak season can generate a weekly income of between £400 and £2,000 according to Mr Boston, giving owners an annual income in the region of £5,000 to £10,000. While industry experts say purchase should be a lifestyle choice rather than an investment decision, the potential to cover the cost of park tenure (the cost of securing a caravan on privately owned land year round) is nothing to sniff at either.

Indeed, the rising appeal of caravans has reached such a point that it is close to surpassing the numbers of Britons with second houses. A quarter of a million second holiday homes are owned in the UK, according to property specialist Knight Frank, only 40,000 more than the number of caravans that are privately owned according to the BH&HPA.

And with the average house price last month valued at £162,435 last week in the Halifax house price index, the monetary advantages of purchasing a mobile property are worth exploring for anyone considering a second home.

While caravans do not have the potential to rise in value over time like permanent buildings, they do offer value for money.

"You can pay substantially less for a modern fully equipped caravan holiday home with things like en-suite bathrooms, hot tubs on the veranda, etc, for an awfully lot less than a bricks-and-mortar property," says Mr Boston.

Unlike buying a cottage, there are far fewer add-on costs such as surveyors' and estate agents' fees. The property can be purchased in the time it takes to buy a car. "You're not looking at a commodity that is going to rise in value, but it's providing you with holidays right throughout the year," says Mr Boston. "It has the potential to bring a return through renting it out."

But there is a wider social benefit as well as an economic one. Buying caravans avoids inflating the prices in housing supply that can result in local people being priced out of the market and the creation of "ghost villages" where many properties are left empty for much of the year.

But for many, half the attraction of caravan properties is in the additional facilities that caravan parks routinely provide. Paul Evans, the communications director for Waterside Holiday Park UK, says today's caravan owners can expect to enjoy entertainment and activities laid on free of charge at most caravan parks.

"We are right on the beach in Weymouth so we are in one of the most expensive parts of the town in terms of property," says Mr Evans. "Yet people here can have their holiday homes a stone's throw away from the beach. The complex has a pool, spa, clubs and entertainment – none of which you would get if you were just to buy a holiday cottage."

Mr Boston adds : "It's not like in the old days where you sat in a deck chair for a few weeks or drove around the beauty spots. People like engaging with the countryside more these days, so mountain bike hire and pony trekking are frequently available from parks."

Many parks also offer subletting services, meaning owners can generate an income from renting out properties without the usual administrative headache.

But before jumping into a purchase there are a few factors to bear in mind. Mr Boston recommends prospective property owners spend at least one night staying on a caravan site to get a feel for the atmosphere which can vary considerably from one park to the next. He also recommends speaking to other holidaymakers.

"If you see a caravan park and think it's the right one for you, then why not spend a week or so renting a caravan to get a feel for the character of the place rather than just jumping in. It's also worth having a chat with other holiday caravan owners there. Most importantly, make sure you get a written agreement from the park before you buy. The key part of that contract will be the 'security of tenure' – in other words, how long you can keep your caravan on the park."

For anyone tempted to buy a caravan as a main property of residence – think again. Caravan holiday homes are legally distinct from residential park homes where the parks have a 12-month residential licence and residents are protected by the Mobile Homes Act.