The pros and cons of buying a holiday lodge

The lockdown has given us plenty of time to think about our lifestyles, and, let’s face it, most of us have had more than enough of being cooped up in our homes for weeks on end. No wonder, then, that we’re seeing plenty of articles about holiday homes.

I’ll be honest, the idea of a bolt-hole to retreat to for long weekends and holidays has become more appealing in recent years. But two things put me off. One, second homes, let’s face it, are not good news for local people struggling to buy their first home. The lack of affordable housing in areas like Cornwall increases injustice and division.

The second reason — surprise, surprise — is the cost involved. UK house prices were already very high, and they rose another 13.4% in the year to June, adding an extra £29,000 to the price of the average home. Of course, the end of the stamp duty holiday may well have a negative impact on prices, but for now at least it remains very much a seller’s market.

One option I have considered is a holiday lodge. And in case you have visions of a chalet park in Minehead, that’s not exactly what I have in mind. All around the country, “boutique lodge retreats” are springing up, providing an upmarket alternative to luxury caravans and traditional, bricks-and-mortar homes.

Not only are lodges much cheaper than houses, they are also a less contentious form of second-home ownership, in that they don’t distort local property prices and disadvantage local residents.

In fact some lodge parks are specifically marketing themselves as an ethical choice. A company that particularly caught my eye is Lovat Parks, which is B Corp certified and designs lodges that are sustainable, eco-friendly and built to blend in with their surroundings. Prices start at £125,000.

So, what are some of the other advantages, and disadvantages, of buying a holiday lodge?

PROs

Lodges come fully furnished
Low maintenance costs
Amenities, including wi-fi, on site
Easy buying process
Attractive rental yields
Tax breaks if you rent out

CONs

Personal mortgages aren't available
Lodges depreciate in value
Management fees around £2,500-£3,500 a year

Do the numbers stack up?

Of course, most people don’t buy a holiday home to make money. They are, essentially, a lifestyle choice. But, financially speaking, are they a reasonable deal?

From the research I did myself, my personal conclusion is that they are expensive. Yes, they’re cheaper than houses, but there again you would expect them to be, given that lodges depreciate in value while houses do the opposite.

Although you shouldn’t need to pay council tax, you do have to factor in management fees, which can run into many thousands of pounds a year.

Finally, a stumbling block for many is that, because lodges aren’t classed as homes, you probably won’t be able to secure a mortgage. So you’ll either need to be a cash buyer or at least put down a hefty cash deposit.

Tips for buyers

If you do decide to buy, it’s vital to check out the company running the park. Stick to companies with a good track record and positive reviews. If you aren’t convinced they’re going to manage the park well, you’re better off steering clear.

Another important factor is the length of the lease. The longer the lease, the more your home will hold its value. You should look for a lodge with a lease of 30 years minimum, though preferably 50 years or even longer.

Finally, consider buying second-hand. Lodges are just the type of purchase that people make on a whim and change their mind. Wait for a year or two and you might find plenty of lodges on-sale for knockdown prices that have barely been used.

Conclusion

Again, I really do see the attraction of a holiday lodge. But the bottom line for me is that, at least for now, they are too expensive for what they are. I’m sure most lodge buyers will end up using them far less than they imagine. Financially, a more logical thing to do is pay to stay in a lodge when you need to and leave the risk and responsibility of ownership to other people.

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