Windy nights and frosted fingers in winter are just a couple of considerations to ponder on before buying a canal boat. The draw of leaving the rental market appeals to many first-time buyers but river boat living is also popular for buyers seeking a holiday home or even an AirBnB investment project.
To help you make the most informed decision, we’ve gathered the information you need to know including how to finance a canal boat purchase, other costs to factor in and how you can prepare yourself for river living.
What is a canal boat?
Rosie and Jim viewers will be all too familiar with narrowboats, also known as canal boats.
This type of boat usually has a width between 6ft 10in and 7ft, so if you’re looking for extra space, you might want to consider a barge which can be around twice the width at 14.5 ft.
Though the above canal boats are the most frequently bought boats, there are also other shapes and sizes to consider such as ‘wide beam’ canal boats.
Downsizing from a house to a canal boat
It can be easy to get swept away by the excitement of buying a canal boat but carefully consider the size and the design of the boat.
If you’re viewing a houseboat, always bring a tape measure so you can check whether your furniture will fit and how much space you’ll have left over to live in.
Downsizing from a house to a boat isn’t necessarily for everyone but small space living can be cheaper and a lot more environmentally friendly.
Buying a narrowboat checklist
Maintenance and wear and tear
Look at the paintwork, varnishing and on-board equipment for signs of wear and tear. Are the fridge, cooker, heating system and shower in good working order? Are there central, fore and aft ropes for easy mooring and a windlass (lock key) and mooring pins?
Hull condition
Check the hull condition meets the traditional 10/6/4mm plating or steel thickness specification. The steel thickness on the hull base should be 10mm, 6mm at the sides and 4mm on the roof. When was the boat last 'blacked' (in dry dock, pressure washed and hull protected with two coats of bitumen)? This should usually be done every 2-3 years to protect the hull from rusting.
Engine
Older canal boats can be cheaper but usually have noisier air-cooled engines which can be prone to wear and tear over the years so check the condition of the engine and gearbox.
Ask the seller whether there are any leaks from the stern gear because if there are, it may need repacking or adjusting which can be expensive. Newer canal boats feature water-cooled diesel engines which are also a lot more quiet.
Electricity
Unless you’re happy to plug into a marina's power supply whenever you dock up, you’ll likely want an inverter to convert 12-volt battery power to 240 volts.
This sounds technical but what it essentially means is that you’ll be able to convert power from the boat's leisure and starter batteries to run electrical equipment like your kettle and straighteners!
What are the costs associated with living on a houseboat?
Besides the actual boat itself, you’ll encounter several additional costs, depending on how you use your boat:
Canal and River Trust licences: Costs depend on your boat’s size, but as an idea, a 40ft vessel can be just over £700 per year.
Boat Safety Scheme: This is like an MOT for your boat and costs approximately £87.50 per year.
Council tax: If your boat is moored permanently, it will typically be in the lowest tax band. However, if you’re happy to move every two weeks as a ‘continuous cruiser,’ you won’t have to pay this.
Fuel and heating: Costs depend on how much you intend to travel and how much you feel the cold. Solar panels can help to reduce the cost of heating and electricity
Insurance: Policy prices will vary depending on the kind of cover you need.
Continuous cruising
Almost 2,000 canal boats in London’s waterways are “continuous cruisers” and this pattern is seen across the UK too, with many people opting for a licence administered by the CRT rather than paying out for a permanent mooring.
Although the costs for a permanent spot vary heavily depending on the part of the country you’re in, they can be in excess of £20,000 a year in some cities. A CRT license allows the boater to moor almost anywhere along the towpath for a maximum of two weeks per area and have to move in an ongoing pattern.
The rules are strictly enforced by canal rangers, so come rain or shine, the boat will have to move every two weeks.
Can I get a mortgage for a canal boat?
In comparison to buying a property, the purchase of a narrow boat or other canal boat can be significantly cheaper, so it may be the case that with saving you can buy with cash. That being said, understandably, that isn’t the case for everyone and so financing will need to be sought.
There are a variety of loans available for those looking for finance to buy a canal boat but be aware that because it isn’t a fixed property, some buyers can find it difficult to find a lender willing to provide a mortgage for this type of purchase.
Furthermore, some lenders also require that buyers have a permanent home mooring.
The good news is that there are a number of specialist finance suppliers for the marine market who will have experience in providing loans and marine mortgages for canal boat purchases and our advisors can highlight the options that are most worth your time.
How much could I borrow?
Every lender has different qualifying criteria for canal boat finance agreements but usually, most lenders will want to look at the below factors when deciding whether they can approve your loan and if so, how much they’ll lend to you.
Annual income
Income source
Property type
Your age
Your credit history
Typically, canal boat finance is available for up to 75% of the cost of a new boat and 70% of the cost of a used boat.
The repayment terms for a marine mortgage are likely to be less than that of a mortgage for a house with some lenders requiring the loan be repaid within 15 years.
Can I remortgage to fund the purchase of a canal boat?
It’s not uncommon for homeowners to remortgage in order to take advantage of a better interest rate or release capital to fund a purchase, whether that be a canal boat or car.
As with any loan that is secured against your property, you should think very carefully before you proceed.
This is where the advice from a mortgage broker can be invaluable because they’ll look at your circumstances and let you know:
A) Whether you can afford to remortgage and
B) Which lender can offer you the best deal
Can a first-time buyer apply for a houseboat mortgage?
Though it may be completely possible for a first-time buyer to buy a canal boat to live in, the choice of finance lenders may be reduced because lenders typically view FTBs as riskier borrowers.
Your own unique circumstances are what really determines your ability to get a mortgage so if you are planning on applying, seek advice to avoid application mistakes and start propositioning yourself as a safe borrower.
Lenders want to feel reassured that if they were to lend to you, you would repay in full and on time. Having a good record of credit borrowing can help to improve your credit score and build your reputation as a safe borrower.
Having a larger deposit as a FTB can also show your commitment to the financial agreement and may be able to help you access lower interest rates, depending on your circumstances.
Where can I go for advice about canal boat financing?
We have advisors online ready to answer your questions about how to buy a canal boat and whether you’d be eligible for finance. Their advice is confidential and practical, allowing you to understand the steps to take if you’d like to apply for a mortgage or financing.
Call 02380 980304 or make an enquiry today.
023 8098 0304