Canal boats: can you save money by living on water?

Ever thought of swapping bricks and mortar for a life on the open waterways in a canal boat? Here's how to make that dream come true.

The solid foundation of owning a house or flat is an aspiration for many in the UK. So the idea of living aboard a canal boat may sound absurd. But is this just a fear of the unknown?

We talk about mortgages and house prices everyday, but alternative ways of living, that could turn out to be a whole lot cheaper, are often overlooked.

It is hard to estimate exactly how many have embarked on this dramatic change of lifestyle, but according to The Residential Boat Owners’ Association and a Watersports Participation Survey there are 15,000 people in the UK enjoying life on narrowboats alone.

If you are intrigued by a life on the water, but aren’t sure where to start, here are some things to consider when buying a boat that we have put together with the help of Towergate Insurance.

House or boat?

The big question playing on my mind is whether an idyllic life of cruising and working the locks is cheaper than settling down in a house on dry land.

According to Towergate Insurance the price of a new boat is £1,000 per foot, so a 50 foot craft (which is the average size) would be around £50,000 to own outright. That equates to a 20% deposit on a £250,000 house!

For a second-hand boat of the same size it could be even cheaper with prices starting from £30,000.

Space

If you think new builds are small, you probably will develop claustrophobia on board the most basic canal boat.

When buying you should think about what you want the boat for – if it’s for leisure you’ll need a craft of around 30 to 40 feet, but 50 feet or more is needed if you want to live aboard.

Bear in mind length has an impact on the cruising range of the boat- a 60 footer can get you around, but anything bigger won’t be able to navigate the canals as well.

Training

If you have never taken up the helm, life on the open waterways may sound a bit terrifying.

It is important to be safe and confident with your craft when cruising. In order to get the training you will need for safety, helmanship, locks and tunnels, collision avoidance and the basics of engine maintenance sign up for a course with a Royal Yachting Association Inland Waterways Helmsman Course.

It only takes a couple of days and will prove useful if you are a complete novice.

The finance

The finance available to buy a boat is where things could get tricky.

To lenders, a boat is seen more in line with a car purchase, even if you intend to live in it. The investment poses a risk as the boat won’t last as long as a house and will depreciate in value.

There are options available though in the form of a marine mortgage or personal loan.

Marine mortgages are available from specialist companies, but they only offer this loan across a shorter term of 10 years, unlike a property mortgage which typically lasts for 25. Some offer longer terms, but either way the interest rate tends to be 3% higher than most normal mortgages, which could mean high monthly repayments over a shorter period, depending on what you borrow.

Ongoing costs

According to livingonboats.co.uk, the general costs you will incur are made up of the following:

• Mooring fees
• Electricity
• LPG Gas
• Water
• Diesel
• Telephone
• Pump out of waste holding tank
• Council Tax
• Boat Licenses
• Insurance
• Maintenance Costs
• Boat Safety Certificate
• Surveys

The most expensive on the list is probably paying for a residential mooring which can typically be between £1,900 and £3,000 depending on the boat and location. It sounds a lot, but when you think about it this is cheaper than some rents for half a year.

Also if you don’t need to be tied to a specific location, you could take to cruising instead. The rules at the moment are as long as you move on every fortnight you don’t have to buy a permanent mooring and are therefore not liable for council tax or water rates.

Some of the unfamiliar items on the list could cause you to think this is more trouble than it is worth, but the scary certificates and maintenance costs are cheaper than you think.

A Boat Safety Certificate will cost £200 every four years, boat licenses are around £550, a full survey will cost around £450, insurance can be as low as £450 and the maintenance costs are about £250.

The official bits

Survey 

Before buying, have the boat surveyed by a qualified Marine Surveyor who will advise of any faults on the hull and with the boat’s internal systems. 

Safety Certificates

A boat under four years old must have a certificate Recreational Craft Directive (Class D Inland Waters), confirming it’s built to Approved Standards. 

Boats over four years must have a Boat Safety Certificate.  This confirms the craft's basic safety systems - engine installation, ventilation, heating, gas, electrics and fire extinguishers - have been checked and approved.  

Licences

A British Waterways Licence allows you to use the canals and rivers.  Before applying, you must give details of your current Boat Safety Certificate and insurance.  

Things to look out for when buying

Used or new there are a few important things to look out for when you are buying a boat:

General maintenance

Has the boat been well looked after? You should check the paintwork, varnishing and on-board equipment. Is 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? 

The hull

Does the hull meet the traditional 10/6/4mm plating or steel thickness specification? 10mm is the steel thickness on the hull base; 6mm is the sides and 4mm the roof.  Also try to determine when the boat was last ‘blacked’ (pressure washed and hull protected with two coats of bitumen). 

Engine and gearbox

What condition is the engine and gearbox in?  Are there any leaks from the stern gear?  If there are, it may need repacking or adjusting.   Water-cooled diesel engines are used on newer boats; older craft have noisier air-cooled engines or vintage models. 

Batteries

Three leisure batteries coupled with one starter battery is standard.  Look for a battery management system; this creates greater efficiency as it regulates the flow of current into the batteries. Check the boat has an inverter to convert 12 volt battery power to 240 volts.  Without it, you’ll be unable to run electrical equipment unless you plug into a marina’s power supply.

Try before you buy

Of course a good way to see if you are suited to life aboard is to try before you buy. Renting is a good idea if you can find a boat that is available but a quicker cheaper way may be to take a holiday on one.

On a boating holiday you could check if you have the stomach for it and also get the chance to talk to other boaters about how they went about making the switch.

Remember to schedule a boat break in the summer and in the winter to really get the true picture on whether you can handle life afloat!

Not for everyone

Living on a boat is not for everyone, not least because there is not enough space on the waterways for us all!

If you have a job which requires you to stay in one place, a large family or hate confined spaces, a boat may not work out for you. But it is one of the many interesting alternatives to buying a house.

More on buying and selling property:

How to deal with property chain problems

The pros and cons of online estate agents

The hidden cost of buying a new build

How to rent out your home