Do Holiday Lodges Lose Value?

30 July 2024

Most assets, including holiday homes and static caravans, will either appreciate (rise in value) or depreciate (drop in value) throughout their lifetime.

When buying an asset like a holiday home, it’s important to consider its lifetime value and whether it’ll appreciate, depreciate or remain stable.

Here, we’ll explore the factors that affect the lifetime value of holiday homes. We’ll provide insight into the best and worst times to buy or sell your holiday home.

Depreciation is the value by which an asset reduces over the course of a financial year. While some assets will
Introduce the concept of depreciation and its significance for holiday lodges.
Highlight the importance of understanding depreciation for potential buyers and owners, mentioning that the article will explore various factors that influence the depreciation of holiday lodges, providing insights on the best and worst times to sell.

What is depreciation?

Many assets will depreciate over their lifetime, often due to wear and tear or features becoming outdated.

Common items that depreciate are new homes, vehicles or equipment. As soon as you drive a brand-new car off the lot, it begins to depreciate because it’s used, and use will contribute to the wear and tear of the vehicle – for example, adding to the mileage.

Another factor that can depreciate an asset is obsolescence. If we again use the example of a car, some of its features will become outdated or no longer required. Petrol and diesel cars will depreciate faster than electric cars right now, because the use of fossil fuels in vehicles is being phased out. Cars with outdated features, like cassette players instead of digital radios, will also fall victim to obsolescence.

Outside factors, known as “abnormal factors”, can also affect how an asset depreciates. If a natural disaster occurs and damages the asset, for example a flood or an earthquake, it further depreciates the asset.

Houses are another common asset that depreciates, and the expected lifespan of a home is 60 years. Holiday homes depreciate in a similar way to homes, and are primarily considered a lifestyle investment rather than a financial investment.

That’s not to say that you’ll lose money on your holiday home, though – if you purchase a holiday home and only take a few holidays in it throughout the year, you can make a decent passive income from subletting it to holiday-goers.

It’s estimated that holiday homes will depreciate at around 15% a year – a similar rate to cars.

Factors affecting the depreciation of holiday lodges

Location

Location is a key factor in the depreciation of holiday homes. Lodges in popular locations will depreciate more slowly than those in less desirable areas.

We put a lot of thought into the locations of our holiday parks – you’ll find them in in-demand locations including the Lake District, Lincolnshire, Yorkshire, Lancashire, Norfolk and Wales. All of our holiday parks are located in areas of stunning natural beauty – meaning they’ll depreciate slower than those located in more remote or industrial areas.

It’s important to consider your location and how desirably it is across the seasons. Summer holidays may be the most popular, but the Lake District still sees millions of visitors in the winter thanks to the natural beauty of the rolling hills and mountains in frosty conditions. Similarly, the valleys of Wales are breathtaking even in the coldest conditions!

Age and condition of the lodge

The age and condition of your lodge can greatly impact how quickly or how heavily it depreciates.

When thinking of your holiday lodge as a saleable asset, you must consider what a new buyer would want – an unkempt holiday home that has not been modernised will depreciate faster than a lodge that receives renovation when required.

Maintenance and renovation in your holiday lodge are essential to ensure your static caravan depreciates as little as possible. If, for example, your heating system isn’t energy-efficient, it’s worth considering an upgrade.

Remember that renovations and maintenance won’t just benefit you if you ever decide to sell your lodge – they’ll also benefit you while you own and use it!

Market demand and trends

Seasonality will naturally affect the value of your holiday home. Some locations, like the Lake District, are desirable year-round. Coastal locations, however, may see a drop in demand outside of the summer months as there may be less to do in the winter.

Tourism patterns may also affect the value of your holiday lodge. Staycations saw a boom throughout the COVID-19 pandemic as holidays abroad were limited due to restrictions. This trend continued for a while, but now many are choosing to go abroad instead of holidaying in the UK due to the rising costs of staycations.

This can lower the rate at which your holiday home depreciates – if your potential buyer sees it as an investment that will eliminate the fluctuating and often high prices associated with even short staycations, this could make a holiday home more in-demand.

Facilities and amenities

The better the onsite facilities, the more appealing your holiday home is – and therefore the slower it depreciates.

A holiday home in a secluded location with no designated facilities will be a much less appealing investment than one on a designated static caravan park with amenities and activities.

Each of our static caravan parks features its own set of facilities and amenities that keep residents and holiday-goers engaged and entertained.

These facilities include:

swimming pools
dedicated fishing lakes
bars, cafes and restaurants
gyms
play areas
amusements
picnic areas
entertainment venues
bird watching and photography opportunities
walking routes
nature reserves.

Find out more about our different holiday park facilities and what you’ll find at each of our static caravan parks.

Strategies to minimise depreciation for your holiday lodge

There are many ways you can minimise how quickly or heavily your holiday home depreciates:

Carry out regular maintenance on your property to ensure no issues arise that could affect its value – like damp or structural issues.
Renovate the property when required – for example, switching to energy-efficient heating systems or replacing outdated décor.
Choose a holiday lodge in a desirable location – this will not only be great for you, but good for the long-term value of your static caravan.
Buy used – both new and used holiday homes will depreciate, and if you buy a pre-owned static caravan, you’ll be spending less upfront.
Seek professional advice from property management businesses to get expert guidance on value retention.

Still unsure on whether a holiday lodge is the right investment for you? Read more about the benefits of owning a static caravan.

The best time to sell a holiday lodge

There are a lot of factors that can affect when is best to sell your holiday home. Understandably, spring and summer will generally be the best seasons to sell your holiday home in because that’s when consumer interest will be at its highest.

You should also take your personal circumstances into account. If you’re in a financially sticky situation, it might be worth selling even if market conditions aren’t ideal to get the money you need.

Post-renovation may be a good time to sell, too – if you’ve recently upgraded a key feature of your static caravan, selling while that feature is brand-new is a good idea.

The worst time to sell a holiday lodge

Uncertain economic climates, like a cost-of-living crisis, can impact the value of your holiday lodge. Times of financial difficulty may mean it’s more difficult to find a buyer, so you may either struggle to sell or need to accept a lower offer.

Less desirable seasons, like winter, may be less profitable than summer, as holiday homes won’t be as in demand. However, don’t discount the off seasons – people may be willing to pay good prices to secure their holiday home ahead of the spring and summer months.

Enquire now

Like many assets, holiday homes are likely to depreciate in value. But there are things you can do to slow down the depreciation of your static caravan – and bear in mind that it’s not only a financial investment, but primarily a lifestyle investment for you and your family to enjoy!

Not yet a holiday lodge owner? Why not explore our static caravans for sale?

If you want to find out more about selling your holiday lodge, get in touch with us today.