Park Homes and Mobile Homes: Financing Rules Explained (2026)

Why you can't get a normal mortgage on a park home

A traditional mortgage is a loan secured against land and the buildings on it. Park homes sit outside this framework because, legally, they are classified as "goods" under the Mobile Homes Act 1983 rather than real property — you own the home itself but not the land it stands on, which remains owned by the site operator. Because there is no land title to secure a mortgage against, high-street mortgage lenders do not offer products for park homes.

Instead, buyers finance park homes through:

• Specialist park home finance providers — dedicated lenders who understand the asset class and offer hire-purchase or secured consumer loans against the home itself.
• Personal loans — for smaller, older, or cheaper homes, an unsecured personal loan may be used, though rates are generally higher still.
• Cash purchase — a large proportion of park home buyers, particularly retirees downsizing, buy outright using released housing equity.

Worked example 1: Financing a new park home

Susan, 62, buys a new-build park home for £140,000 on a residential park. She puts down a 25% deposit (£35,000) and finances the remaining £105,000 over 15 years at 7.2% APR through a specialist park home lender.

• Monthly repayment: approximately £960
• Total interest paid over 15 years: approximately £67,800
• Total cost of the home over the term: £212,800

Compare this to a residential mortgage of the same size at, say, 4.5% over 25 years, which would cost roughly £583/month — the higher rate and shorter typical term on park home finance make monthly costs noticeably higher relative to the amount borrowed.

Worked example 2: The pitch fee over time

David lives in a park home with a starting pitch fee of £180/month. Pitch fees are reviewed annually and typically rise in line with CPI, which we will assume averages 2.5% per year.

Over 20 years, David will have paid roughly £53,000 in pitch fees alone — a cost that continues indefinitely for as long as he lives on the site, unlike a mortgage which eventually ends.

Worked example 3: Selling and the 10% commission

Angela bought her park home for £95,000 eight years ago and sells it for £110,000. Under the Mobile Homes Act 1983, the site owner can charge commission of up to 10% of the sale price.

• Sale price: £110,000
• Site owner's commission (10%): £11,000
• Net proceeds to Angela: £99,000

Despite the home nominally "gaining" £15,000 in value, after commission Angela nets only £4,000 more than she originally paid — and that is before accounting for finance interest paid over the years or any depreciation that a valuer might otherwise have applied.

Comparing park home finance to a small residential mortgage

If you are weighing a park home against a small conventional flat or house, running both scenarios through a Mortgage Calculator and a Mortgage Affordability Calculator side by side will show the true monthly cost difference once pitch fees and higher park home finance rates are included.

Tax treatment of a park home

If a park home is your only or main residence, on a site with no restriction on year-round occupation, it is generally treated the same as a house for Private Residence Relief purposes — meaning no Capital Gains Tax on any increase in value when you sell (before deducting the site owner's commission, which is a separate cost, not a tax). Holiday-only park homes, where planning conditions prevent permanent residency, do not qualify for this relief and any gain could in principle be taxable, though gains on depreciating mobile assets are rare in practice.

Is a park home right for you?

Park homes appeal strongly to downsizing retirees seeking a lower purchase price, single-storey living, and often a strong community environment. But the total cost of ownership — higher finance rates, ongoing pitch fees, and resale commission — means the headline price is not directly comparable to a house. Always compare the full 10 or 20-year cost of a park home against a small flat or bungalow bought with a conventional mortgage before deciding.

Sources

• gov.uk: Mobile Homes Act 1983 — pitch fees and commission
• gov.uk: Park homes: buying, selling and site rules
• HMRC: Private Residence Relief