An honest look at funding your holiday home in Mid Wales: costs, risks, and reality.
IMPORTANT: This guide provides general information, not personal financial advice. Salop Caravan Sites (trading as Morben Isaf) acts as a credit broker, not a lender. We can introduce you to a limited number of lenders who may be able to assist you with your purchase. Finance is subject to status, affordability checks, and lender terms. If you are considering a remortgage or secured borrowing, we strongly recommend speaking to an independent financial adviser.
Key Facts: Your 30-Second Summary
If you only read one section, make it this one.
| Question |
Short Answer |
| Can I get finance? |
Yes. Most buyers use Hire Purchase (HP) or personal loans. |
| Is it a mortgage? |
No. It is a credit agreement, similar to buying a car. |
| What is the typical deposit? |
Usually 10% to 20% of the purchase price. |
| Can I rent it out to pay the loan? |
No. Lenders base affordability on personal income. Also, Morben Isaf does not allow subletting. |
| Does credit score matter? |
Yes. Lenders check your history and perform a hard credit search. |
| Do I own it instantly? |
With a Personal Loan, yes. With HP, only after the final payment. |
| What is the Golden Rule? |
Never take a finance term that outlasts the park licence. |
| Can I live in it full-time? |
No. It's a holiday home. You must have a separate main residence. |
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Quick Takeaways
- Spread the cost, but accept you will pay more overall.
- Spare income is key. Lenders look at affordability, not just score.
- Never bank on rental income (especially as we don't allow it).
- Your finance term must end before your licence agreement expires.
- If you sell early, you must clear the finance immediately.
What This Guide Covers
- Options: HP vs personal loans.
- The Trap: Why relying on rental income is dangerous.
- The Gap: Matching your loan term to the park licence.
- Budgeting: How to stress-test your finances.
- Eligibility: Who lenders typically say "yes" to.
- Exit Strategy: What happens if you need to sell.
The Money Talk
You've found the spot. You can see yourself here — Friday evenings in the Dyfi Valley, watching the sunset over the hills.
Now comes the practical bit. How do you actually pay for it?
At Morben Isaf, we meet buyers every week who are ready to commit but unsure how the numbers work.
This guide answers the questions people are often too polite to ask.
Who is this for?
This guide is for the first-time buyer.
You might be looking at a tidy pre-owned starter for £35,000 or a luxury lodge for £150,000. If you don't have the full cash amount sitting in the bank, this explains your options.
Why Buy at Morben Isaf?
- Natural Setting: Located in the UNESCO Dyfi Biosphere near Machynlleth.
- Owners-Only: A quiet community. No stag dos, no rental fleets.
- Clear Terms: We tell you the licence length upfront, so you can match your finance correctly.
- Trusted Partners: We work with regulated lenders who know the caravan market.
1. What Is Static Caravan Finance?
It works a lot like buying a car.
You put down a deposit (usually 10-20%) and borrow the rest. You pay it back monthly, plus interest.
Static Caravans vs Lodges
The rules are similar, but the timelines differ.
Because lodges (built to BS 3632 residential spec) last longer, lenders often offer longer repayment terms — sometimes up to 10 or 15 years.
Standard statics are typically capped at 7–10 years.
Who lends the money?
We don't lend you our own money. Salop Caravan Sites acts as a broker.
Park Finance: We introduce you to specialist lenders (like Black Horse) who understand holiday homes. We do the paperwork, but your contract is with them.
Personal Loans: You go to your own bank (Tesco, Lloyds, etc). We aren't involved.
2. Which Option is Right For Me?
| Feature |
Hire Purchase (HP) via Park |
Personal Loan (Bank) |
Secured Loan (Remortgage) |
| Best For... |
Ease. The park handles the admin. Secured on the caravan. |
Flexibility. Unsecured debt (doesn't risk the caravan). |
Big budget lodge buyers needing long terms. |
| Ownership |
You own it only after the final payment. |
You own it immediately. |
You own it immediately. |
| Typical Term |
1–10 years. |
1–7 years. |
5–25 years. |
| Risk |
They can repossess the caravan if you default. |
Affects credit rating if you default. |
High Risk. Secured against your main home. |
3. The "Licence Gap": A Critical Warning
Do not skip this section.
Every holiday home has a "shelf life" on the park. This is the Licence Agreement (e.g., 15 years from new).
The Golden Rule: Never take a finance term that is longer than the time left on the licence.
The Nightmare Scenario:
- You buy a used caravan with 5 years left on the licence.
- You take a 7-year loan to keep payments low.
- Result: In Year 5, the caravan has to leave the park, but you are still paying for it for another 2 years.
At Morben Isaf, we check the dates with you before you sign anything. We won't let you sign a "bad match" deal.
4. The "Rent-to-Buy" Myth
We hear this a lot: "Can I just rent it out in the summer to pay the monthly finance?"
At Morben Isaf, the answer is No.
We are an owners-only park. We do not allow commercial subletting. This is a deliberate choice to keep the park quiet, secure, and private for our owners.
But even on parks that do allow it, lenders won't accept "potential rental income" on your application. They look at your actual salary and pension. You must be able to afford the payments yourself.
The Stress Test
Ask yourself: "If I lost my overtime or my bonus, could I still pay the caravan finance?"
If the answer is no, wait until you have a larger deposit.
5. Will I Be Accepted?
We can't promise anything, but lenders usually look for:
- Age: 18+ (some prefer 21+).
- History: UK resident for 3+ years.
- Income: Steady, provable income (salary or pension).
- Credit: Fair to Good history. No recent CCJs.
Top Tip: Joint applications (with a partner or spouse) often have a higher success rate because the combined income looks stronger.
6. Budgeting for the "Real Cost"
Don't just look at the monthly loan repayment. That is only half the bill.
You need to budget for the Total Cost of Ownership in Mid Wales:
- Finance Repayment: (e.g., £300–£500/month)
- Site Fees: (Morben Isaf fees start from £3,800/year)
- Running Costs: (Gas, electric, insurance – approx £1,200/year)
Make sure you can afford the whole package, not just the loan.
7. The Exit Strategy
You need to know how you get out before you get in.
Selling: If you sell your caravan, the finance doesn't just vanish. It must be settled immediately from the sale proceeds.
Negative Equity: If your caravan has depreciated faster than you've paid off the loan (common in the first 2-3 years), you might owe more than the caravan is worth. In that case, you have to find the cash to pay the difference to clear the debt.
Upgrading: This is easier. We can often settle the old finance agreement and start a new one for your new lodge or caravan.
8. Risks & Reality Check
Finance is a tool, not a magic wand. It might not be right for you if:
- You are planning to retire soon: Will your pension cover the payments?
- Your income fluctuates: If you are on a zero-hours contract, a fixed monthly commitment is risky.
- You are stretching too far: If you have to cut back on groceries to pay for the caravan, it won't be a relaxing holiday.
What if life happens?
If you lose your job or separate, talk to the lender immediately. Regulated HP agreements often have "Voluntary Termination" rights once you've paid 50% of the total amount. Read the fine print.
Conclusion: The Smart Way to Buy
Finance isn't scary if you do the maths.
It allows you to keep your savings for a rainy day while enjoying the lifestyle now. It can help you afford a better model with double glazing and central heating, which extends your season into the winter.
The key is honesty. Be honest about your budget. Be honest about your usage.
If the numbers work, we can help you with the rest.
Your Next Steps
- Check your credit score (ClearScore or Experian).
- Calculate your total budget (Finance + £5k annual running costs).
- Come and see us at Morben Isaf. We'll show you what's possible.
FAQs
Can I live in my holiday home?
No. Morben Isaf is a holiday park. You must have a main residence elsewhere (and pay Council Tax on it).
Does applying hurt my credit score?
A full application leaves a "hard footprint". We can often do a "soft search" first which gives you an idea without affecting your score.
Can I pay it off early?
Usually, yes. Most agreements allow early settlement, though there may be a small interest adjustment. Check the terms.
Can I get finance if I am retired?
Yes, if you have a steady pension income that covers the affordability checks.
Ready to talk numbers?
We believe in clarity. We will walk you through the costs, the licence lengths, and the monthly payments without the pressure.