Some people scratching their heads over what to do with their holiday homes say “there’s no use throwing good money after bad”. Our view is that an investment in moving your holiday home can be one of the best investments you can make in yourself.
Selling: loss of value
Some owners unfortunately have bad experiences with their holiday parks, and think of selling their caravan or lodge.
In some cases, this is the right thing to do. Sometimes there are good deals to be done (e.g. with their current park, part-exchanging to another park, or selling privately), and sometimes they just want to move on to the next adventure.
However, usually this course of action will result in leaving a lot of value on the table – both financial and socioemotional value.
Financial value
Selling a holiday home will usually result in a loss of financial value – the difference between what they paid for the holiday home and what they walk away with.
Usually when they leave on their terms after getting what they want out of the holiday home, there is no real loss in value as it is written down over time. They have invested in a lifestyle choice, and that choice has improved their lifestyle.
However, leaving before they planned means a huge part of the premium paid for the holiday home will be lost in the resale. And leaving tens of thousands of pounds on the table is a bitter, bitter pill to swallow.
Socioemotional value
Moreover, the holiday home has not decreased in the value to the owner. It is still a great holiday home, it is just the setting which has turned sour.
So, selling the holiday home can result in a painful financial loss but also the loss of what was supposed to be an investment in your lifestyle – your bolthole, your little escape.
A big part of this value is security – knowing that the park won’t be sold to another operator. The Constable family has been here for nearly a thousand years and lives next door – so they’re not going anywhere. And in terms of the next generation involvement, Jack is in his 30s – for better or for worse, owners are stuck with him for the foreseeable…
Buying another holiday home: a premium or a downgrade
Often owners still want a holiday home and think of selling and then buying another holiday home, or part-exchanging for another holiday home. This can work, but there are two consequences: paying more out, or settling for a lower-grade holiday home.
In the former case, they pay a significant “top up” premium to buy another holiday home of a similar level somewhere else. The new park will doubtless want to make its profit margin too, so even if you get a good deal, it will involve paying out.
In the latter case, they may say that their budget is whatever they get from the sale of their holiday home. There is a holiday home for most budgets, but nine times out of ten, buying a cheaper holiday home means a downgrade in holiday experience. And they’ll always be thinking of their old holiday home…
Case study – moving a lodge
Probably the most extreme example of moving a holiday home is moving a lodge. These are a lot more complicated and expensive to move, and moreover there is a £25,000 pitch premium for a lodge pitch.
We quoted a customer to move their double-width lodge to BC. They had spent £200,000 on the new lodge one year beforehand.
It ended up coming to £45,096 including VAT.
£10,296 contractors’ costs: £3,168 Labour to spilt inc travel and sheeting; £2,736 transport, £3,744 labour to site at BCHP including all stands + chains, £216 plumbing in, £432 Gas & Electric safety checks
£30,000 pitch premium (£25,000 plus VAT)
£4,800 decking remove & refit
When considering this, the first reaction was (as it often is) “no way”. But then they considered the alternatives.
Selling to the park: they had had an offer from their park to buy it back for £150,000. (NB, this is the danger with new holiday homes – they are like cars… losing 25% of the value in the first year is realistic. https://www.theaa.com/car-buying/depreciation).
Selling privately: they wanted to put it up for sale at £189,000. That would mean paying £34,000 (15% +VAT) to the Park in private sale commission, leaving them with just under £155,000… minus whatever utilities were left… and the time and stress of having to sell it.
Selling would mean losing a huge amount of value (more than the cost of moving!) and then either having to go without a holiday lodge, or having to buy a pre-owned lodge (a real downgrade)… or having to find a lot more money to find something as nice (new top-of-the-range lodges can cost well over £200,000).
So suddenly £45,000 was actually the smaller amount of money to pay to keep the lodge that they love, and the lifestyle that they hoped for.
Conclusion: spend a little, gain a lot
Especially when considering caravan holiday homes, by spending a relatively small amount (thousands, not tens of thousands), customers can avoid losing tens of thousands of pounds in financial value (remember, the caravan is still “worth” to the customer what they paid for it) and who-knows-what in socioemotional value (having the holiday experience they paid for, which would otherwise be taken away from them).
Whilst the Park does not financially gain much from bring-ons (we would rather be selling our own holiday homes), they are an investment in the future – and they make for very happy customers who are so relieved not to have lost their beloved holiday home, and to be at a very happy, peaceful holiday park with no risk of changing hands – and (dare we say) an improvement on their previous park.