Ahoy There - Anyone For A House Boat?

As house prices tumble it could be time to think about going for a paddle. Whilst property values across the UK have fallen by over 20 per cent in the last 12 months, the prices of residential house boats have remained relatively buoyant.

There is a national shortage of moorings and plenty of demand so they are holding their values quite well. Prices so far are about 6 per cent off their peak.

There are two categories of house boat: the Dutch barge and narrow boat types which have a motor and can move around under their own power, and the static floating house boat which has to be towed if it has to move. Either way, they can be linked to a rental mooring or a freehold mooring at a marina and it is these mooring that are in such short supply so prices vary greatly according to demand.

The cost of a house boat depends on its specification so for example, you can start with a new 58 foot vessel at around 65,000 pounds and thereafter, the sky's the limit. You'll then need a licence from the water authority and British waterway charge around 800 pounds per year for a boat between 60 and 70 feet. You'll have to insure the boat and that will cost you more than insuring bricks and mortar. The boat will also have to be dry docked every five to seven years which will cost upwards of 2,000 pounds.

How can you finance your hose boat? Here is some basic information - Marine Mortgages - (These are secured on your house boat).

Marine mortgages are the only way to fund purchases of boats when the sums required exceed 25,000 pounds. There is no upper limits to the amount of money that can be borrowed the only limit is your ability to pay. Repayment periods vary dependant on lender, but they are always much shorter than bricks and mortar - usually between 2 and 10 years.

The marine mortgage would be secured against the house boat. In the event of you defaulting on your mortgage, the lender has legal title to your boat and it can be repossessed.

A deposit will be required, the norm being 20 per cent. In special circumstances, for example where the house boat is being bought significantly below open market valuation, it may be possible to negotiate a lower deposit although this is very rare.

Equalised Repayments - This is the most popular method of funding. The main feature is that your repayments remain fixed throughout the whole repayment period making budgeting easy. However, the underlying interest rate is variable with adjustments to the interest being made at the end of the mortgage either by a request for payment of additional interest or the refund of any overpayment.

Variable Rate Marine Mortgages - With these arrangements, interest is calculated on the outstanding daily balance. All variable rate marine mortgages allow overpayments which will reduce total interest you pay as the Standard variable mortgages. There are also no penalties for early settlement.

Because interest is calculated on the outstanding balance, any change in interest rate results in a change in the monthly payment. Therefore, they are not as easy to budget for.

Fixed Rate Marine Mortgages - Unlike residential fixed mortgages, which generally revert back to a variable rate after a period, marine fixed rate mortgages remain fixed for the entire period of the mortgage. On the downside, you cannot overpay your mortgage and there may be a minimum two or three month interest penalty on settlement.

Have you ever thought of buying a house boat instead of a normal house - however you may still need a Mortgage, visit Brokers Online for a great deal. Brokers Online also provides its UK clients with Debt Management, Mortgage Payment Protection Insurance and many more financial products.