Leisure and trading-business mortgages for holiday and caravan parks

How do lenders value a park as a going concern?

A park is valued on what it earns, not on its footprint. A specialist valuer assesses the maintainable EBITDA, the sustainable annual profit a competent operator would expect, by examining several years of trading accounts, the income mix between pitch fees, touring and camping, holiday-home sales margin and any food, beverage and retail. They then apply a multiple that reflects the quality and durability of that income, the licence and the tenure, to arrive at a going-concern value. That value, which captures goodwill and the operating business, is the figure the loan to value is measured against.

This is why two parks of similar acreage can value very differently. A site with strong, growing pitch-fee income, a healthy holiday-home sales pipeline and a long freehold licence carries far more value, and far more borrowing capacity, than a tired park with a short season or a wasting leasehold. Savills, in its Holiday and Home Park Update 2025, reported an average transaction value of around thirty-four thousand pounds per pitch on holiday static parks in 2024 and operator profit conversion near twenty-nine per cent, which gives a sense of the trading-led way the sector is valued. Those are sector figures, not a valuation of your park.

Why do the licence and tenure matter so much?

The site licence and the tenure are the foundations of a park mortgage, because they determine whether the trade can continue and for how long. The caravan or holiday-site licence sets the operating standards, the permitted units and, with the planning consent, the season the park can run. A long-dated or evergreen licence supports the going-concern value; a licence with limited term, or one entangled in unresolved conditions, caps it. Lenders will not lend long-term against a trade that may not be permitted to operate over the life of the loan.

Tenure works the same way. Freehold ownership is strong security and underwrites well, because the operator controls the land for the long term. Short or wasting leasehold is weak, since the trade and its value erode as the lease runs down, and lenders either shorten the term, cut the advance or decline. Ground rents, break clauses and any superior landlord's consent all feed into the assessment. We do not give legal advice, and you should take your own counsel on title and licence, but we make sure these foundations are understood before a lender is approached.

What income makes a park lend well?

Lenders favour income that is recurring, diverse and resilient. Pitch and site fees are the backbone, contracted annual payments from holiday-home owners that recur year after year, and a large, stable base of pitch fees underwrites strongly. Touring and camping receipts add seasonality but spread the income, while holiday-home sales margin can be lucrative but is treated more cautiously because it is transactional rather than recurring. A park balancing these streams, rather than depending on one, presents a more durable trade.

Lenders also weigh how the income is trending and how it was earned. Growing pitch-fee income with good occupancy and a managed hire fleet is a strong signal; income propped up by one-off unit sales or by deferring maintenance is a warning sign. The April 2025 abolition of the furnished holiday lettings tax regime, confirmed by HMRC and gov.uk, changed the tax treatment of some holiday-let income, and lenders are alert to how operators have responded. We do not give tax advice, so please take your own, but we help you present the income story in the way a park lender reads it.

What security and terms are typical?

Expect a first legal charge over the park, a debenture over the trading company and personal guarantees from the principals, because the lender is securing both the property and the business that gives it value. Where the park is held in an SPV or group, share charges and inter-company guarantees may feature. Terms usually run fifteen to twenty-five years, with the advance commonly in the region of fifty to sixty-five per cent of going-concern value, moving with the licence, tenure and strength of the accounts. Repayment is normally capital and interest, sometimes with a period of interest-only.

Covenants centre on debt-service or EBITDA cover and a loan-to-value cap, supported by reporting requirements such as annual accounts and periodic management figures. As unregulated commercial lending, the package is negotiated, and pricing is a margin over a reference rate reflecting the park's risk profile. If your park has a meaningful non-leisure element, for example a substantial retail or food and beverage operation, a Semi-Commercial Property Finance structure may fit better, and we will tell you. These figures are indicative only and not an offer of finance.

Is a trading mortgage the right fit for me?

A trading-business mortgage suits an owner of an established, income-producing park who wants long-term, stable funding, whether to buy a park, refinance existing debt onto better terms, or release equity from a site that has grown in value. If your park has clean accounts, a long licence, sound tenure and a balanced income mix, this is usually the most efficient and lowest-cost form of park finance available, and the natural home for the bulk of your borrowing.

It is less suited to a park that is still being built, where development funding against cost and end value fits better, or to an operator running several parks who would gain from a single portfolio facility. It also depends on the trade being lendable, a wasting leasehold or unresolved licence can rule it out until the foundations are fixed. We assess where your park sits and arrange the structure that genuinely fits, drawing on the wider Commercial Mortgages Broker market where helpful. This is general information, not advice or an offer of finance.