Can I buy a houseboat? The pros and cons

Life on the water could be the realisation of a long-held dream, but it’s not all plain sailing.

Make sure you take a reality check before you get on board.

Could you live on a houseboat?

Have you ever pictured yourself aboard a narrowboat or Dutch barge, drifting down river wherever and whenever the mood takes you, enjoying a simpler life, connecting with nature and making new friends along the way?

If so, you’re not alone. In fact, it’s a lifestyle that’s being embraced by all sorts of people – from the recently retired and cash-rich people who want a new adventure afloat to big-city young professionals seeking a less stressful life.

Figures from the Canal & River Trust show there are up to 50,000 people living on the water in the UK. Recently, the proportion of people living on their boats has risen from 15% in 2011 to 27% in 2020, with overall boat numbers also increasing.

“More and more younger people are choosing to live afloat, with boats being more affordable than other places to live,” says Matthew Symonds, national boating manager at the Canal & River Trust.

“In London, the growth in liveaboard boating has been very significant. Boats without a home mooring make up more than half of boats in London.”

However, if you’re seriously considering swapping your bricks-and-mortar abode for on-the-water living, it’s important to think less about the romance of it all and more about the practicalities.

Floating homes come with a surprisingly long list of administrative and financial factors to consider – and more than a little hard work.

What are the advantages of buying a houseboat?

• No stamp duty: Houseboats are exempt and, if you continually cruise along the river (rather than opting for a permanent mooring), there’s no council tax to pay.

• Flexibility: You have the freedom to explore the UK’s waterways and, if you like somewhere, drop anchor for a bit. If not, simply chug along to a new destination. If you’re looking for an alternative second home for weekends, this could be the answer.

• Location, location, location: A houseboat gives you the opportunity to live in city centres or exclusive postcodes at a fraction of local bricks and mortar prices.

• Lifestyle: If you yearn for an outdoorsy lifestyle where you can bond with nature, houseboat living has strong appeal.

• Community: Marina communities are renowned for being welcoming and close-knit, similar to living in a small village.

What are the disadvantages of owning a houseboat?

• Limited space: Boats need to be small enough to navigate compact locks and canals, so you may have to radically downsize your possessions.

• Ongoing maintenance: There’s always something that needs to be done on a boat – from engine servicing to treating rust spots, not to mention emptying the toilet and filling the water tank.

• Commutability: If you choose to continuously cruise, rather than paying for a permanent mooring, you may find getting to work a challenge as you’re constantly changing location.

• Depreciation: Water-borne vessels are often regarded as a depreciating asset.

• Day-to-day living: If you’re in a couple, you’ll have to adapt to living on top of one another and, if village-style communities aren’t your thing, marina life may feel a little too close-knit for comfort.

What are the typical costs of buying a houseboat?

According to a survey of policyholders with boat insurers, Insure4boats, the average cost of buying a narrowboat is £57,000. But costs can vary significantly depending on the type of craft you choose and whether it’s in pristine condition or needs a revamp.

From traditional narrowboats and converted Dutch barges (former flat-bottomed commercial vessels) to true houseboats (static dwellings with no engine, built on pontoons), any former tug, ferry or fishing vessel has the scope to be converted into a floating home.

Newer and luxury boats can cost as much as a house.

As a guide, Riverhome’s Nicholas Austin, says: “We have narrowboats on our books for less than £50,000 and a floating mansion that’s on the market for £3.5 million.”

Besides the actual boat itself, there are additional costs, depending on its condition and how you use your boat:

• Canal & River Trust licences: There are six and 12-month options ranging from £739 to £3,124, depending on the length of your boat. As an idea, a 20-metre vessel costs £1,874 per year. Some waterways, including the River Thames and the Norfolk Broads, require a separate licence. You can only buy a licence if you have a boat safety certificate and insurance.

• Boat safety certificate: Just like an MOT for a car, a boat needs to be licensed, insured and have a valid Boat Safety Scheme (BSS) certificate. This costs approximately £150 per year, plus the cost of any repairs.

• Insurance: Policy prices vary depending on the kind of cover you need, but start from around £200 a year.

• Mooring fees: Depending on where you live, these can be from around £2,000 a year in some regions to as much as £18,000 in London. Mooring can be either residential, which allows you to live on your boat full-time, or leisure, which limits the time to a few days a week. The best moorings are fully serviced with water, fuel, a sewerage facility and power. It’s best to find a mooring before buying a boat – or see if the craft you’re purchasing comes with the transfer of the mooring it’s currently on.

• Council tax: If your boat is moored permanently, it will typically be in the lowest tax band, with single occupants benefitting from a 25% reduction. 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 cosy you like to be, starting from around £10 a week on wood for a log-burning stove.

• Other ongoing expenses: A household living on a narrowboat can expect to pay approximately £85 a month for utilities and £52 a month for maintenance.

Can I get a mortgage to buy a houseboat?

Yes, but not with a conventional mortgage. Traditional mortgage providers won’t lend on floating homes because they can’t be registered with the Land Registry, and the owner could, quite literally, just sail off into the sunset with their investment.

Instead, you’ll need a marine mortgage, available only through a specialist marine finance company or broker.

Marine loans typically have shorter repayment terms at around 10 years, require a larger deposit – generally 30% – and have considerably higher interest rates (starting at 5.9%) than traditional mortgages.

It’s also advisable to get a boat survey before you buy, just as you would with a house, to avoid any nasty surprises. This can cost around £350 to £400, plus the cost of any repairs.

Can I buy a houseboat as a first-time buyer?

As the cost of bricks and mortar properties are outpricing many first-time buyer budgets, a houseboat is a viable option for a first home.

However, just as with standard mortgages, a marine mortgage lender will have many affordability criteria you’ll need to pass before you’ll be accepted and they decide how much they’ll offer you.

They will look at many factors, including:

• Your annual income

• Your credit history

• The kind of boat you’re looking at

• Your deposit: canal boat mortgages are typically available at up to 75% of the boat’s value, but if you’ve got a larger deposit, you’ll normally find it easier and cheaper to secure a deal

• Your buyer profile: if you’re a first-time buyer, you may find it more difficult to secure a canal boat mortgage as you’re considered an unknown risk

Is living in a houseboat right for me?

The only way to answer this question is to try before you buy. Consider booking a week’s holiday in both summer and winter to get a feel for living on a boat on gloriously sunny days and dreary rain-drenched ones.

Take time to consider if you could feel comfortable residing in a compact space permanently or whether it’s something that would actually work better as a holiday home.

Also, think hard about all the practicalities of onboard living and whether you have the DIY skills and physical fitness to cope.

While permanently moored boats can be connected to a direct source of water, sewage treatment and electricity, continuous cruisers need a water tank for drinking and showering and a separate sewage tank for waste, which need to be emptied manually and require well-maintained generators for power.

Also, note that boats must go into a dry dock every five years, and you’ll have to move out for a fortnight while the hull is scraped and repainted. If you’re fully informed, well prepared and happy to deal with all the different aspects of boat living, it could be time to get on board.

Get professional advice

Living on a houseboat can be a rewarding and adventurous lifestyle, offering flexibility, community, and the chance to enjoy nature up close.

But it also comes with unique challenges, from maintenance demands and space constraints to securing a specialist marine mortgage.

Whether you're a first-time buyer or looking for a lifestyle change, it's crucial to weigh up the pros and cons before committing.

Getting professional mortgage advice tailored to houseboat purchases can help you navigate the financial waters with confidence and ensure your dream of life afloat doesn’t spring any leaks.