Park Homes - Communities and Local Government Committee Contents


1  Introduction

The park home industry

1. According to the Government about 160,000 people live in 84,000 park homes which accounts for around 0.38% of the total housing in England.[1] There are around 1,950 park home sites across England, which are concentrated in rural and seaside locations. The vast majority of park home sites are privately owned with a small number owned by local authorities.[2] Park homes have proved attractive to retired people wishing to release capital from the sale of a house and find a pleasant and peaceful location with a sense of community to live in permanently. As a consequence park residents tend to be older than the population as a whole: in 1992 about 55% of park homes were occupied by people aged 60 or over.[3] A decade later this proportion had risen to over 68%.[4]

Park home ownership and the park home business model

2. The park home sector developed out of caravan sites after the Second World War consequently it does not have the traditional forms of housing tenure found in England—such as rental tenancies, leaseholds or freeholds. While most residents own their own homes (which are legally chattels, that is they are mobile homes,[5] although in practice most are not mobile), they do not usually own the land on which their homes are stationed. They pay a pitch fee to the site owner for the use of that land, and for the provision of associated services, which often includes utilities and the management of site facilities. In contrast to traditional "bricks and mortar" housing, site owners can generate additional income by selling new homes on their sites—in the past park homes had a life of 20 to 30 years and so needed to be replaced—and also from a 'commission' on the sale of a home by a current owner to a new owner. The site owner has entitlement of up to 10% of the sale price. The latest economic assessment of the sector, undertaken in 2002, estimated that income from sales formed 51% of site owners' revenue, pitch fees 42%, and commission the remainder.[6]

Park home regulation

3. The framework that regulates the occupation of park homes and the park home industry has evolved in a piecemeal fashion. The Caravan Sites and Control of Development Act 1960 requires that all park home sites are licensed by local authorities, and provides local authorities with powers to take site owners to court for breaches of licence conditions. The Caravan Sites Act 1968 provides park home owners with some protection against eviction and harassment. The Mobile Homes Act 1983 regulates the contractual relationship between the site owner and resident. It provides the site owner with an obligation to maintain a site, the right to receive commission of the sale price and, where a home is sold, the right to approve the buyer. The 1983 Act was amended in 2006 to provide that certain new terms are to be implied in agreements. The jurisdiction for disputes under the 1983 Act was transferred from county courts to the Residential Property Tribunal Service on 30 April 2011.

Our inquiry

4. As parliamentarians we are aware that many who live in park homes have raised concerns about practices in the sector. A number of us have received representations from constituents who live on park home sites describing a range of problems. A number of park home owners campaigning groups as well as the All Party Parliamentary Group on Mobile Homes are pressing the Government for changes to the law.[7] We undertook this inquiry in light of these concerns, to identify the key issues that residents face, to assess the scale of the problems and to examine what legislative solutions might be appropriate.

5. We have received over 250 written memoranda. We took the exceptional step to redact some of this evidence where those who submitted written submissions asked for their names to be withheld and where serious allegations were made directly against named individuals. We have drawn on this evidence to examine how the sector as a whole is functioning. (It is not our role to adjudicate on specific allegations against individual site owners or park home owners.) We also took oral evidence from park home owners and groups campaigning on their behalf, site owners and industry representative bodies, local authorities, including councillors, a number of other interested organisations, and the Minister for Housing and Local Government, Rt Hon Grant Shapps MP. On 5 March we visited two park home sites in Bournemouth and took evidence in public at the Town Hall. We thank all those who took the trouble to submit or give evidence, to Bournemouth Council for arranging our visit and to our specialist advisor Tim Selley.[8]

Problems in the park home industry

6. Though we recognise that there are some good park home site operators, the evidence we received suggested that malpractice was widespread across the sector. Complaints ranged from miscalculation of increases to pitch fees and utility charges, through poor site maintenance, to allegations of harassment and intimidation by site owners against residents. Top of this list was abuse of the site owners' power to approve new buyers to prevent home owners from selling—a practice known as 'sale blocking'.

7. Although at the time we took oral evidence there was no independent survey to quantify the extent of the problems, the Park Home Owners Justice Campaign reported a recent survey which covered 803 of the estimated 1,950 park home sites in England. This reported that 48% of these parks had residents 'living under the regime of an unscrupulous park owner', many of whom had been reported as being aggressive, abusive, violent and dishonest. In addition, a further 14% of parks reported their site owner as evasive, misleading, dismissive and unprofessional. Subsequently, Consumer Focus has provided us with the preliminary findings from research it has undertaken. This research took responses to questionnaires from 70% of local authorities in England and used information from interviews with 1,000 residents. Its key findings included:

  • 25 per cent of residents had experienced problems with maintenance, security or safety standards;
  • 19 per cent of people had problems regarding their written contracts or pitch fee agreements and;
  • Residents of sites owned by 28 different owners reported having experienced intimidation by site owners/managers.[9]

8. The Minister reached similar conclusions. He also told us that he saw the problem growing:

I have gone from thinking this was possibly a smallish problem with some rogues to being absolutely convinced [...] that it is quite a serious, big—without being the majority—and growing problem. It is of a very significant size and therefore absolutely requires and demands Government attention and time.[10]

GOVERNMENT CONSULTATION

9. Concerns about the park homes sector are not recent. In May 2009 the previous Government announced that it would introduce a comprehensive package of proposals to reform the sector.[11] A further paper was published on 30 March 2010 which set out options for improving the management of park home sites and site licensing reform.[12] No measures were implemented prior to the 2010 General Election. In February 2011, the Coalition Government announced its intention to consult on new measures to "better protect mobile home occupiers".[13] A consultation document, A Better Deal for Mobile Home Owners, was published, after we launched this inquiry, on 16 April 2012 by the Department for Communities and Local Government (DCLG) with proposals to :

  • address sale blocking;
  • improve the contractual relationship between home owners and site owners;
  • improve provisions in the Caravan Sites Act 1968 on criminal offences; and
  • reform the park home site licensing system.[14]

10. The Minster explained to us that the measures in the 2012 consultation were designed to drive the worst offenders out of the industry:

we need to drive them out of the market entirely and just make it one of these things where, if you are the extortionate type who builds up their business off the backs of others rather than through making an honest profit, this is no longer the business for you and you might as well sell up.[15]

This report

11. We welcome publication of the Government's consultation document. In our view, however, the extent of the reported problems and the history of piecemeal legislative changes requires a wider examination of the sector going beyond the issues covered in the Government's consultation. In chapter 2 we consider the extent to which sales blocking lies at the heart of problems the sector faces and how it can be prevented. In chapter 3 we examine how the licensing regime should be amended to improve site management. In chapter 4 we consider whether there should be a fit and proper test for site managers, an issue not proposed in the Government's consultation document. In chapter 5 we set out how agreements between site owners and residents could be improved.

12. Finally, we have considered at several points in our report the timing of changes and whether the circumstances in the sector are such that they need to be made urgently. When the Minister gave evidence it was clear that a Government bill was not imminent (see paragraph 26). We have reservations about this approach, which we set out in our report, but, to assist before primary legislation is brought forward, we make a number of recommendations to reform the sector which could be achieved quickly through existing powers to make secondary legislation.


1   Ev 140, para 3 Back

2   As above Back

3   Ev 140, para 5 Back

4   Office of the Deputy Prime Minister, Economics of the Park Homes Industry, October 2002, executive summary, para 9 Back

5   According to the Department for Communities and Local Government, Park Homes Factsheet, Consolidated Implied Terms In Park Home Pitch Agreements, "mobile home" has the same meaning as "caravan" in Part 1 of the Caravan Sites and Control of Development Act 1960, namely "any structure designed or adapted for human habitation which is capable of being moved from one place to another ( whether by being towed, or by being transported on a motor vehicle or trailer) and motor vehicle so designed. Back

6   Office of the Deputy Prime Minister, Economics of the Park Home Industry, 2002, fig 4.2 Back

7   For more information about the case, see: "Mobile home owners 'preyed upon'", BBC News, August 2009, http://news.bbc.co.uk/1/hi/uk/8222356.stm. Back

8   Tim Selley declared the following interests: Solicitor undertaking legal work for park home owners and residents' associations, including some who have submitted evidence to the Committee's inquiry, and frequently charging legal fees for legal work. Listed by the Independent Park Home Advisory Service as providing legal advice. Back

9   Ev 87 Back

10   Q 472 Back

11   Department for Communities and Local Government, Park Home Site licensing-Improving the Management of Park Home Sites, 2009 Back

12   Department for Communities and Local Government, Park homes site licensing reform: The way forward and next steps, 2010 Back

13   HC Deb, 7 February 2011, col 75W Back

14   Department for Communities and Local Government, A Better Deal for Mobile Home Owners, April 2012 Back

15   Q 494 Back


 
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© Parliamentary copyright 2012
Prepared 20 June 2012