TUBE engineer Alex Russell lives in the lush Surrey Hills countryside where homes can sell for millions of pounds.
But the savvy homeowner, 47, has revealed how he paid just £150,000 for a three-bed single-storey static caravan, allowing him to live mortgage free.
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Park homes are like a static caravan or chalet that you might stay in on holiday – but you can live in them all year round.
Typically they are for older people retiring to a smaller place and there are around 85,000 residents on 2,000 sites across the country.
In 2015 Alex sold his two-bed terrace house in Sutton for £330,000, allowing him to purchase his new home without a bank loan.
“I didn’t know anything about them,” he told The Sun. “It’s like a small cottage really.
“I wanted to move to a place with a driveway. I could afford to upgrade to a place with one. But it just meant most of my money would have been going on a mortgage.
“I was just looking in an area I liked and put in no minimum price, and these prices were so low”
“It was in a state. Once my mates saw it all done up, they loved it and say they want to live here now.”
“Not many people seem to know about park homes. Someone I work with always asks if I’m still living in a caravan.
“They think I’m a gypsy living in the middle of a field. It’s more like a house but people don’t realise what they are.”
“I have three bedrooms, a full kitchen and bathroom and a log burner.”
“I can do what I want without a mortgage”
Alex bought his previous home in around 2006 for £220k. When he sold it and bought the new place he had a whopping £150,000 leftover.
It meant he could buy the park home outright and live mortgage-free. Now he saves the cash he would have spent on mortgage repayments, which used to cost him £850 a month.
And he plans to use his savings to retire early, as well as giving him some financial security and freedom.
“If I lose my job I’m not suddenly going to find myself homeless,” he told The Sun.
“It just relaxes you, the fact that you haven’t got to stress about mortgages and what you can afford and mortgage rates going up.
“Anything that I had going into a mortgage is going into savings instead. I’m able to do what I want.”
Because he owns his home outright there’s no risk of falling behind on mortgage payments or having his home repossessed.
Alex took out a loan for £30k to £40k to renovate the property, which he has since repaid, gutting it completely as it had fallen into disrepair.
A change to rules in 2013 means residents can now sell park homes on the open market and Alex estimates that his home is now worth around £300k – doubling in price.
New homes on the same site are going for £425,000.
But if Alex does sell his home, he will have to give 10% of the sale price to the park’s owners.
As well as being mortgage-free Alex has also saved money in other ways.
Stamp duty was zero as there’s usually no tax due on park homes because owners only rent the land the home is on, rather than own it.
There’s no requirement to have a conveyancer or solicitor like you do when buying a traditional home, and you don’t need to get a survey.
But there are still due diligence steps to be taken when buying a park home.
“Follow the rules and you’ll be ok”
Residents are subject to rules set out by the park owners. For instance, if you are allowed pets or not, and even if you’re allowed to have grandchildren stay overnight.
“They give you a set of rules for what you can and can’t do and if you breach them they can consider kicking you off the site. Follow the rules and you’ll be ok. There is no restriction on age or pets where I am.”
Alex has to pay a pitch fee to the company which owns the park which is £158 a month.
Anyone looking to buy will have to put the cash down to buy outright as you won’t be able to get a mortgage for one.
That’s because the land the home is on is owned by the park owner and not the owner of the home.
Home insurance can be a little harder to get compared to normal, says Alex, as you have to go to a specialist provider.
As for running costs, Alex’s council tax is in the cheapest band as this style of home is generally in tax band A.
Electricity is paid to the site owner rather than directly to energy suppliers, but gas is connected directly to the mains and paid to a supplier, as is water.
“My mum and dad loved it so much and were looking to downsize so they bought a place on the same site,” Alex adds.
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I was a teen mum and live in a tiny house with my two kids, people always ask how we all fit in it’s so small
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