Monday, 21 February 2011

What will it cost to live afloat?

A look at the costs of living afloat, from the cheapest to the most expensive options, and how they compare with life on land.

Mooring all year round will just about double your 
liveaboard costs.
Compare and contrast

Ask most liveaboard boaters and they will tell you that it is certainly cheaper than living on land – but is it really?
The answer depends on many factors but it is true to say that it can be. Clearly costs will vary depending on whether you are a single person, a couple or a family but, for the sake of simplicity, let’s look at a couple over 60, living on board a 60ft narrowboat on the canal system who have paid £40,000 for their vessel.
The best estimate we have of such a pair living on shore comes from a recent survey from the Joseph Rowntree Foundation which estimated that they would need £265.92 a week to live a reasonable lifestyle. That included £60.65 on food and drink; £9.93 on clothes and shoes; £103.64 on housing costs; £20.20 for household goods and services (everything from tea towels to furniture, microwaves to tin openers); £23.65 on personal goods and services such as medical items, £4.65 on transport and £43.21 on social and cultural activities including holidays and TV licences and subscriptions.
If the same couple were living on a boat many of those costs remain the same, so the area of contrast is with the housing cost of £103.64 a week – a fairly modest figure as it assumes rental of a two-bed council flat, along with council tax, fuel for heating and some decorating.

There are going to be repairs to be made and diesel to buy.
How will you afford it?

On a boat the main cost is the purchase of the vessel itself and, if you have to borrow the money on a boat mortgage that can be substantial. Borrowing a whole £40,000 on a 10 year personal loan would mean forking out £527.16 a month or £121.60 a week – but that assumes that you have a house to provide security and are willing to pay an eye-watering typical APR of 11.4 per cent.
A boat mortgage, using someone like Barclays or Collidge & Partners, is secured on the vessel. Most lenders will only finance a live aboard mortgage for boats in excess of £43,000 and this allows the lender to provide a £30,000 loan with a 30 per cent deposit for the remainder.
Since the bankers made a mess of everything lenders are now much more reluctant to hand over any cash unless you have a spotless credit history and even then they insist on high interest rates and lots of security.
Barclays need confirmation that you have permanent moorings for at least 12 months but will lend up to 80 per cent of the valuation or cost of the vessel.
Lenders will not risk lending on sea-faring vessels whose owners could disappear abroad
Mortgage terms can be from two to 15 years, with 10 years being typical. Interest rates are not disclosed up front by any of the firms offering boat mortgages as they tend to vary based on your personal credit history and the nervousness of the banker providing the cash.
Collidge & Partners say their minimum loan amount is £5,000 but they too insist on a maximum loan amount of 80 per cent of the cost of the vessel. The loan is secured against the boat in the form of Chattel Mortgage.
As the costs of buying vary so much it is difficult to make a comparison – but anyone contemplating the step will know what they currently pay in rent or mortgage and what buying a boat will cost them, so the comparison is simple enough for individuals.

If you have more disposable income there are plenty
of temptations, like The Swan at Fradley Junction
Other overheads

Unless you have a proper residential berth agreed with the local council and not moveable, you need not pay council tax – although it may be a battle in some marinas to argue that out with the local authority. If you win, or if you are continuously cruising, you are saving around £17 a week.
You have to be insured, of course and you can get basic insurance on a 60ft boat worth £40,000 for around £170 a year but many insurers will charge more for liveaboard boats. Basic third party cover for those who like a gamble with their investment costs from around £70. On the other hand, proper residential boat cover, with a decent amount of contents cover can cost you around £350 with a broker like Towergate Mardon.
Then you need a licence. If you just plan to use the British Waterways canal system a basic licence for a 60 ft boat will set you back £821.59, although this will rise to £863.49 after a 5.1 per cent increase after April. Pay it all at once and those figures are £739.43 rising to £777.14 after April.
If you want a Gold Licence which enables you to use BW and Environment Agency waterways the 2011 price is £1,027 if you pay it all at once or £1,104 for direct debit payments. All these figures are for a 60ft narrowboat.
Then there are your other running costs. Diesel is what will generate your electricity and how much you use depends on how far you travel, the time of the year and what demands you have for electronic bits and pieces such as TV, washing machines and vacuum cleaners.
A good bank of solar panels will save you a lot but as a general gauge a boat moving around the system with a fairly small engine and making the most of the concession of only paying the basic price for diesel not used for propulsion will probably spent about £600-800 a year.
Whether your boat is new or old there will always be running costs, engineers, spare parts etc and an £80 subscription to an organisation like River Canal Rescue will ease those costs as call-out charges are often high. I would allow that plus another £200 or so for spares etc and £150 for an annual engine service.
Finally there are the other ongoing costs. You need to have the boat’s bottom blacked every couple of years – somewhere around £600-700. You will need a Boat Safety Certificate every four years at a cost or around £130-150 and every ten years you may well need a complete repaint at between £3,000 and £8,000, depending on your requirements (and wallet).
Taking average figures and excluding both the painting and the cost of any finance to buy the boat I reckon that works out at around £50 a week – or about half what housing costs that couple living in a council flat.

How much fuel you use depends on the weather
conditions and the time of year
Not moving costs money too
Of course, if you moor in a marina all year that changes the picture with fees for a residential boat ranging from around £2,500 in the midlands and north to two or three times that in London. That puts at least another £48 a week on the cost and puts you back on a par with the couple in the council flat. The same is broadly true of a British Waterways residential mooring as they are now so rare that they fetch silly prices in the online auctions.
Heating costs are a bit cheaper – averaging £10 a week for the couple in the flat and, if you use a coal fire for, say, five months of the year burning two bags of coal a week at £8.50 a bag it works out at around £6.50 a week over the year. Gas costs will depend on your boat’s set up but reckon on around £5-10 a week.
All of which means you have a lot more disposable income to add to the £43 a week spent on ‘social and cultural’ items. On the canal that may possibly take the form of some of the delightful waterside watering holes.
Bottom of Form
MoreMore seriously, before you spend anything make sure that it is a way of life that suits you. Do your research, talk to friends who liveaboard, discuss the lifestyle well before committing your life savings

1 comment:

  1. I have read this post. This post is a nice one that we are loans in chennai , personal loans in chennai , home loans in chennai . That I will inform about your post to my friends and all the best for your future post..