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With the move to higher density development in urban areas, many older properties are being bought by developers not for the property itself, but the land underneath it. This creates an opportunity for buyers looking for a heritage property who can’t afford to buy into the older, established suburbs.

What is a relocatable home?

Not to be confused with a mobile tiny home, a relocatable home is an existing home that’s picked up and moved to a new location or section.

Some refer to this type of home as a secondhand home, as they’re generally cheaper to purchase than a new build property. Typically used as a primary residence, some have a second life as a holiday home and they’re a good option if you don’t want a cookie-cutter design new build.

Why look at relocatable homes?

In most cities, older properties in established suburbs come with higher prices due to their central locations and proximity to desirable schools. So, they’re not normally in the ‘first home’ price bracket.

Relocatable homes are a fraction of the cost of a new build or a standard property, so you can save yourself a significant amount of money. And the savings aren’t just related to price. Did you know that the demolition of an average-sized Kiwi home creates 20-25 tonnes of debris which is then put into landfill?

Buying a relocatable home can have positive financial and environmental impacts.

Upsides

• Price: it’s cheaper to purchase a relocatable home. When you factor in the lower cost of a section compared to a site with a property already on it, you can save a significant amount.
• Speed: it takes less time to move a property onto a site than build from scratch.
• Location, location, location: If you have a piece of land, you can site the property in the perfect spot to take advantage of the sun, available light and any views.
• The environment and sustainability: moving a house to give it another life is the ultimate way to recycle.
• Heritage features and materials: many older properties were built using materials (particularly timbers) that are no longer able to be used in construction. And many of the features of heritage properties, such as leadlights or mouldings can be too costly to recreate in a new build.

Downsides

• You’ll need to pay to transport the property to the new location. The amount will depend on the distance between sites, complexity of the move and the terrain encountered.
• Banks won’t lend against a relocatable home until it’s been safely moved to the section and connected to all services such as wastewater, so you’ll need to manage that risk.
• Banks also won’t sign on for the mortgage until the property is on site and connected to council services (water, sewerage etc).
• Not all properties are suitable for relocation.
• The house being relocated will be prepared, split into sections and braced, and then moved and rejoined at the final location before connection to local services. There’s an element of risk involved in all these steps.

What type of lending is available for a relocatable home?

Lending for this type of property is not as simple as it would be for a standard property. You can borrow for some things and not for others. Let’s run through them.

Buying a section

Lending of up to 80% is available to buy your section, against the value of that section or a property you already own.

Buying a relocatable home

You cannot borrow from a bank for the purchase of a relocatable home. This is because there’s no security for the bank to take (it’s also the reason banks are reluctant to lend on mobile tiny homes that have no fixed address) until the property is connected to all services and has a CCC (Code of Compliance Certificate) at its final location.

You will need to fund this part of the purchase along with the connection of the property to any services such as power, drainage, and sewerage, etc. on your section.

Family members and parents often help their children with a temporary loan or cash to cover the cost of transporting and purchasing a relocatable house. Once the project has been completed, a bank loan can be assessed up to 80% of the value of the property to repay your family.

There are personal and financial risks to be considered regarding the final valuations of the property once compliant, including that of whether there is enough income to support the final loan that you want so make sure you have legal advice to ensure everyone is protected.

What about when it’s on site?

This is where bank lending can kick in again, but only if your property is on site and fully connected to all services. You’ll also need all building and council consents and your CCC (Code of Compliance Certificate).

After this, your relocatable home will be looked at by a lender as a standard property. This is the point where you need a registered valuation on the whole property (house and land) and can then approach your bank for lending of up to 80% of the assessed value of your new home.

What else do I need to know?

As with most things, the more time you spend planning can help save you money and headaches later down the track. Gather as much information as you can before you start. Below are some of the things you’ll need to think about at different points in your relocation journey.

Before the move

Budget

This must include your section purchase (a bank will lend up to 80% of the land value), the purchase of the relocatable house, transportation costs and any valuations required for your lending request. It’s good to also have a contingency fund for any unexpected issues that could occur during the preparation and transportation stages of moving your new home.

Preferred property type and relocation company

What type of home do you dream of? Is it a heritage wooden villa, or a mid-century masterpiece?

Most properties can be relocated but some require more preparation work than others. A wooden villa for instance is a more straightforward move than a brick property. In the case of a brick home, be aware that the bricks will be removed from the exterior walls due to weight issues (the removal process renders them unusable) for transportation. Once settled at the final site, you can re-lay new bricks or use another exterior cladding material of your choice.

What experience does your relocation company have? Try and find one that has a good relationship with developers. This could mean they get ‘first dibs’ and a lower price on quality homes that developers would otherwise need to spend money to demolish.

Your section

Inspect your section to understand where you want to position the home and make sure that this location is viable with your relocatable home company, in terms of transportation. How much preparation (siteworks) will need to be done to the section so it’s ready for your relocatable home? Add that into your overall budget.

Reports, reports, reports….

You’ll also need to obtain building reports, resource and building consents along with septic and storm water reports and anything else. Make sure you understand what’s involved here and also look into the process of obtaining a CCC (Code of Compliance Certificate). Until you have a CCC, you’ll be unable to borrow any money on the property. You’ll also

Insurance

What insurances will you need for the property during the different points in the relocation process to be fully covered?

On the road

Transport timings

There are bylaws and regulations that specify the times of house moves. Generally these relocation times will be scheduled for night-time hours so as not to impede traffic flows (particularly important when removing a house from an urban area). Your relocation company will be across all these rules and work out the schedule with you.

Finally home……

Compliance and lending

Once you’re on site and fully connected to all services, you can obtain your CCC (Code of Compliance Certificate), building and council consents.

After this, your relocatable home will be looked at by a lender as a standard property.

This is the point where you need a registered valuation on the whole property (house and land) and can then approach your bank for lending of up to 80% of the assessed value of your new home.