This House of Commons Library briefing paper explains the requirement to pay 10% commission on the sale price of a mobile home to the site owner and provides information on various reviews of that requirement. Mobile home owners regard the commission charge as "unfair and out of date", whilst site owners regard it as an important source of income.Jump to full report >>
When an owner of a mobile/park home situated on a site covered by the Mobile Homes Act 1983 (as amended) sells their home, there is a requirement to pay commission on the sale to the site owner. The maximum rate of commission is prescribed in regulations made by the Secretary of State and is currently set at 10% of the sale price.
There has been a polarised debate over the years about the commission payment, with park home owners calling for the rate to be reduced or abolished, and site owners arguing for the commission payment to be maintained.
The general justification for the commission charge is that what is sold is an amalgam of the value of the park home and the value of the site on which it is placed. Site owners regard the charge as an important source of income which allows them to reinvest in the parks and maintain higher standards without additional costs for homeowners.
Mobile/park home owners regard the requirement to pay commission as unfair and outdated. Organisations, such as Park Home Owners Justice Campaign (PHOJC), have campaigned for reform. The PHOJC has argued that the 10% charge should be based on the difference between the last sale price and the current sale price. PHOJC organised a Three Nations Protest Rally on 21 March 2017 to challenge the 10% commission charge.
The commission charge has been reviewed several times since it was last amended (reduced from 15%) in 1983. In October 2014 the Coalition Government said there were no current plans to amend the amount payable – this position was reiterated by the Minister for Housing, then Brandon Lewis, on 8 June 2015.
In 2015, the Government set up a Park Homes Working Group “to identify evidence of poor practice where it exists, and investigate how best to raise standards and further tackle abuse”. The Working Group, which included national resident groups and industry trade bodies, considered the issue of the 10% commission charge, but was unable to reach a consensus.
The Government conducted a two-part review of mobile (park) homes legislation in 2017. The 10% commission charge was outside of the scope of the review. Nevertheless, many consultation responses raised the issue, and the Government committed to give the matter further consideration separately from the review. The Government’s response to the review, published on 22 October 2018, consequently confirmed that the Government will commission research to gather relevant data to enable a detailed assessment of the likely impacts of a change to the 10% commission charge on residents and site owners. A timetable for the research will be announced in due course.
The Welsh Government held a public consultation on the park homes commission rate from May to August 2017, inviting views on whether the rate should continue at its current level of 10% or be reduced or abolished. The Welsh Government subsequently commissioned further financial analysis to inform its decision. On 5 June 2018, the Minister for Housing and Regeneration, Rebecca Evans, announced the decision to lower the commission rate by 1 percentage point per year, over a 5-year period, until it is reduced to a maximum of 5% of the purchase price. The Welsh Government has launched a consultation on how best to implement the commission rate reduction. The consultation closes on 14 December 2018.
In 2011, the Scottish Government consulted on proposals to amend the implied terms in the Mobile Homes Act 1983. The consultation invited views on the commission on mobile home sales, and its relationship to other sources of business income for site owners, such as pitch fees. In 2013 the Scottish Government confirmed its decision to retain the 10% commission rate.
Commons Briefing papers SN07003
Authors: Wendy Wilson; Hannah Cromarty