Canal Boat Investment: Is It Worthwhile?

The idea of living on a canal boat is appealing to many, offering a slower pace of life, a closer connection to nature, and the freedom to travel. However, it's important to consider the financial implications before taking the plunge. While canal boats can be a worthwhile investment, offering a unique lifestyle and the chance to explore beautiful waterways, they may not be a good financial investment as their value depreciates over time.

Canal boats are a depreciating asset

While the idea of owning a canal boat may sound appealing, it is important to remember that, like cars and houses, they are a depreciating asset. This means that, over time, their value will decrease rather than appreciate. As a result, you may not make your money back if you decide to sell your canal boat.

Initial costs

The price of a new canal boat is around £1,000 per foot, so a 50-foot craft, which is the average size, would cost approximately £50,000 to own outright. A second-hand boat of the same size could be cheaper, with prices starting from £30,000.

Additional costs

There are also several additional costs to consider when owning a canal boat. These include:

• Mooring fees, which can range from £1,900 to £3,000 per year depending on the boat and location.
• A British Waterways Licence, which allows you to use canals and rivers.
• A Boat Safety Certificate, which costs £200 every four years.
• Insurance, which can cost as little as £450 per year.
• Maintenance, which will cost around £250 per year, not including any unexpected repairs.

Finance

Obtaining finance for a canal boat can also be more challenging than for a property. Lenders view boat purchases as riskier than property investments as boats depreciate in value and will not last as long as a house. As a result, you may need to consider a marine mortgage or personal loan, which often come with higher interest rates and shorter repayment terms than traditional mortgages.

Lifestyle considerations

In addition to the financial considerations, it is important to remember that living on a canal boat requires a minimalist lifestyle due to the limited storage space. This may not be suitable for everyone, especially those with large families or who require a lot of space.

Mooring options and costs

Long-term moorings are typically found at marinas or boatyards, and the price is usually based on the boat's length and the popularity of the area. For example, a residential mooring can range from £1,900 to £3,000 depending on the boat and location, which is cheaper than some rents for half a year.

On the other hand, short-term moorings are more flexible as you can moor wherever you arrive and are usually free of charge. However, short-stay mooring places cannot be booked in most parts of the UK and are available on a first-come, first-served basis.

If you plan to live on your canal boat, it is essential to consider the mooring costs and availability in your desired area. Additionally, if you intend to cruise and move locations frequently, short-term moorings may be more suitable, but you will need to follow the rules and regulations regarding mooring durations.

It is also worth noting that if you do not want to be tied to a specific location, you can choose to cruise instead of mooring permanently. As per the current rules, as long as you move on every fortnight, you are not required to purchase a permanent mooring and are exempt from council tax and water rates.

When considering mooring options and costs, it is advisable to research the specific regulations and pricing structures in your desired area.

The pros and cons of canal living

Canal living offers a unique lifestyle, blending the charm of scenic waterways with the freedom of a mobile home. Here are some of the pros and cons of canal living to help you decide if it's the right choice for you.

Pros:

• Scenic views and nature: Canal living allows you to explore beautiful canals and waterways, offering a chance to get closer to nature and enjoy scenic views.
• Freedom and adventure: With a canal boat, you have the freedom to travel to different locations and experience new adventures. It's a great way to escape the daily grind and explore new places.
• Relaxing lifestyle: Canal boat life is often associated with a slower and more relaxed pace of life. It can provide a sense of peace and tranquility, away from the hustle and bustle of city life.
• Cost savings: For some people, living on a canal boat can be more affordable than traditional housing options. It can be a cost-effective way to save money, especially for young people looking to buy their first home.
• Minimalist living: Canal boats require a minimalist lifestyle due to limited storage space. This can lead to a less cluttered and more relaxed way of living, reducing stress and promoting a more laid-back lifestyle.

Cons:

• Depreciation: Canal boats are not typically considered a good investment as they depreciate in value over time. You may not recoup your investment if you decide to sell your boat.
• Maintenance and repairs: Canal boats require regular maintenance and repairs, which can be costly. It's important to have good DIY skills or be prepared to pay for professional help when issues arise.
• Limited space: Canal boats have limited living space, which may not be suitable for everyone. It requires adapting to a minimalist lifestyle and letting go of non-essential belongings.
• Mooring challenges: Finding a place to moor your canal boat can be difficult, especially for long-term mooring. Short-term mooring options are often limited and operate on a first-come, first-served basis.
• Paperwork and compliance: Canal boat ownership comes with a lot of paperwork, including licenses, insurance, and other regulatory requirements. It's important to stay on top of this paperwork to ensure compliance with all the necessary regulations.

The cost of buying a canal boat

New Canal Boats

A new 57-foot, fully-fitted narrowboat typically costs between £120,000 and £140,000, with more basic models lacking many niceties. A budget of at least £150,000 will get you a better specification, and upwards of £175,000 will buy higher-quality carpentry and fixtures. A really nice boat can be had for around £200,000. Widebeams tend to cost upwards of £175,000 and can easily exceed £250,000, depending on the design.

Used Canal Boats

A good used narrowboat, around fifteen to twenty years old with a decent hull and engine, can be purchased for £50,000 to £60,000. A budget of £70,000 to £90,000 will buy a very good used boat. Widebeams tend to cost more, with older boats needing lots of work starting at around £75,000, and decent ones costing £100,000 or more.

Other Costs to Consider

In addition to the purchase price, there are several other costs to consider when buying a canal boat, including mooring fees, licences, insurance, maintenance, fuel, and heating. These costs can vary depending on the location, size of the boat, and the facilities available. It's also important to budget for any maintenance or repair costs, as these can add up quickly.

While canal boats can provide a unique and enjoyable lifestyle, they are not typically considered a good investment in the traditional sense, as their value depreciates over time. However, for those seeking an alternative to traditional housing or a leisurely escape, a canal boat can offer a cost-effective and appealing option.

The cost of maintaining a canal boat

Mooring Fees

Mooring fees vary depending on the location of the marina or mooring, the size of the boat, the type of mooring, and the facilities available. Annual moorings can range from £1,500 for a rural mooring without facilities to over £4,000 in a desirable location like London. It's important to note that a licence to moor a boat is different from a licence to live on it, and marinas that offer residential moorings may charge a significant surcharge.

Waterways Licences

A waterways licence is required to cruise or moor on most rivers and canals. The Canal and River Trust (CRT) issues licences for navigable canals and some rivers, such as the River Severn. Their annual cruising licence costs between £600 and £1,300, depending on the length of the boat. The Environment Agency (EA) issues licences for other waterways, including the River Thames, and fees vary accordingly.

Maintenance Costs

Maintenance costs for engine and boat upkeep depend on the boat owner's ability to perform their own maintenance. Engine annual servicing at a marina can cost £250 or more, but materials for do-it-yourself maintenance can be purchased for under £100. A three-yearly docking for blacking and anode replacement on a steel-hulled boat can range from £700 to over £4,000, depending on boat length and materials used. DIY docking can reduce this cost by about half. Consumables like batteries can cost £400 or more every three to four years. Over a longer period, such as ten years, boat cabins, decks, and roofs will need repainting, which can cost over £6,000 for a professional job or about half that for a DIY paint job.

Marine Insurance

Marine insurance is required to license a boat and can range from about £250 for basic third-party cover to over £1,000 for fully comprehensive residential cover. Valuable items on board, such as watches or cameras, may need to be individually listed for coverage. In some cases, an out-of-water survey, which can cost over £1,000, may be required before insurance coverage is provided.

Boat Safety Scheme (BSS) Examination

A Boat Safety Scheme (BSS) Examination, which costs around £150, must be passed every four years by most boats. This examination ensures that the boat's basic safety systems, including engine installation, ventilation, heating, gas, electrics, and fire extinguishers, are in good working order.

Power and Heating

Power for lighting, heating, and cooking can come from various sources. If moored at a marina, electricity is likely available but may cost more than a domestic supply. When cruising, running the engine may be necessary to charge batteries and heat water, incurring the cost of diesel, gas for cooking, and possibly coal and wood for heating, amounting to at least £1,000 and possibly over £3,000 per year, depending on comfort needs.

Training

While not mandatory, training in helmsmanship, locks and tunnels, collision avoidance, and basic engine maintenance can be beneficial for safety and confidence when cruising. The Royal Yachting Association offers an Inland Waterways Helmsman Course that can be completed in a couple of days.

Frequently asked questions