Holiday Homes - what's the scam?

[MikeyWorld]

I was walking past an estate agents in Cornwall, and they were flogging "holiday homes" for £39,999 (priced to come in under the second home 3% Stamp Duty threshold), so I'm already a bit suspicious. It looked like it could have sold for £80k.

You can only live in them up to 8 weeks of the year, a maximum 21 days at a time. You don't own the freehold, you get a 999 yr lease.
I've never had leasehold, so no idea how much that would cost. I was never going to buy one, but it did get me thinking.

They are so dirt cheap - they must have been built on a mine shaft.
Do you get lumbered with a huge charge for the maintenance of the paddling pool and bouncy castle?
Is it a McFarty Brick type deal where you have to sell it back to the leaseholder?

Something is a bit off, does anybody know?

[richlist]

You have to be careful that the service charges and ground rents aren't to high. Some holiday homes in my area have.....private beach, sauna, gym, swimming pool, jacuzzi, on site bar and club, gated security 24/7 etc etc. That all needs to be financed and annual fees are very high.

[Dod101]

Sounds like a timeshare with all the positives and negatives that that brings. Notoriously difficult to sell on in my area anyway. A long way from Cornwall! They also usually have significant management charges.

Dod

[dspp]

And they are basically just a caravan with skirts, called a cabin in the literature to evade planning regs.

[tikunetih]

What does the EA sign say?

"Suckers required - apply within"?

[richlist]

And they are basically just a caravan with skirts, called a cabin in the literature to evade planning regs.

They're called detached bungalows in my area......brick built, like a conventional property.

[bungeejumper]

Are you quite sure about that 8 week occupancy limit? I've seen 10 month limits, and I'd believe an 8 month limit- but 8 weeks? Shurely shome mishtake?

The occupancy limits are usually intended to make sure that you can't live there for enough of the time to become a permanent load on the local infrastructure. (Schools, health, utilities.) Which is why I'd be inclined to back dspp's hunch that these are static caravans - not very good ones either, at that price.

Another point, which is by no means minor, is that you can't easily get a mortgage on a property with a holiday restriction. That in turn does terrible things to resale values.

BJ

[tikunetih]

In my area, they are often type of static caravan or other lash-up construction, clad in cedar and enjoying full-width grey bifold doors* and windows, often with a log burner, surrounded by grey decking and glazed (plasticked?) balconies, and every other a la mode grey accoutrement.

The owners invariably use their grey RR Evoques to travel to these ludicrously overpriced depreciating unsellable cash-draining liabilities.




* if the doors were used as per the brochure images, onshore winds would quickly sandblast to near-destruction the interiors of said "lodges".

[dspp]

In my area, they are often type of static caravan or other lash-up construction, clad in cedar and enjoying full-width grey bifold doors* and windows, often with a log burner, surrounded by grey decking and glazed (plasticked?) balconies, and every other a la mode grey accoutrement.

The owners invariably use their grey RR Evoques to travel to these ludicrously overpriced depreciating unsellable liabilities.

You must live near me. The owners seem to come from Essex, wear crop tops, and have orange skin in places my daughter pokes fun at for their inability to do a proper job.

They are normally built in old gravel pits that are marketed as "parkland" and partially reflooded. The planning system is comprehensively bought off as that was grade 1 farmland prior to extraction, and there was a requirement to reinstate as grade 1 following extraction. Except that it isn't.

Ugh.

dspp

[Slarti]

Ground rent gets a heafty increase - was a news article about this a week or 2 back with people unable to sell their homes because the ground rent has gone up so much nobody will buy.

Also management charges, there is usually no control over how much they go up.

It could also include conditions about giving freeholder first dibbs when you sell and terms being favourable to them.

Slarti

[monabri]

Are you quite sure about that 8 week occupancy limit? I've seen 10 month limits, and I'd believe an 8 month limit- but 8 weeks? Shurely shome mishtake?

The occupancy limits are usually intended to make sure that you can't live there for enough of the time to become a permanent load on the local infrastructure. (Schools, health, utilities.) Which is why I'd be inclined to back dspp's hunch that these are static caravans - not very good ones either, at that price.

Another point, which is by no means minor, is that you can't easily get a mortgage on a property with a holiday restriction. That in turn does terrible things to resale values.

BJ

I took the 8 weeks to be the amount of time you could use the home during the whole year , or 8/52 weeks. Who decides which weeks? Sounds like an expensive timeshare to me but without the literature its it's hard to say for certain.