The South West's residential parks face a struggle to survive in 2012 – but the outlook for holiday park operators in the region is brighter, according to new research.

A study from accountants Grant Thornton is forecasting that the majority of businesses will be able to ride out the difficult economic conditions this year.

But it warns that some will continue to suffer the ill effects of the sluggish property market and may be vulnerable to insolvency.

"With property transactions in 2011 remaining at historically low levels, the knock-on effect on residential parks, especially those that are over-leveraged and relying on income from the sales of park homes, as well as those with less established businesses, continues," said Nigel Morrison, recovery and reorganisation partner at Grant Thornton.

He said the outlook for the South West's holiday parks – particularly those which provide static caravan and touring pitches – is generally more positive, helped in part by the increasing trend for camping trips and UK-based holidays.

"While prospects for residential parks are muted in 2012, we expect performance in the holiday park sector to be more positive, with performance polarising between lettings and sales. Those which provide letting accommodation, such as static caravan and touring pitches, will generally perform better than those which are dependent on holiday caravan sales."