By Rebecca Shields
Your commercial awareness dose
Due to the global pandemic, we have gotten used to numerous articles about various industries struggling and businesses closing. So, it is pleasant to hear when an industry has succeeded in this difficult time. This week it was announced that UK house prices had risen by 7.5% in 2020, the highest growth rate in 6 years, with detached houses being the most popular (8% price increase) and flats being the lowest (4% price increase). But it is not just conventional housing options that have risen in popularity, last year saw a large increase in people choosing to buy and live on the British canal and river systems.
First used in the industrial revolution as transport vehicles, canal boats have decreased and increased in popularity over the centuries. They come in many different versions such as narrowboats, wide beams and Dutch barges, all with their own variations. Anyone who lives near a river or canal in the UK will be familiar with the sight of those longboats. For many, they are rentable holiday homes or leisure boats for weekend cruising.
However, over the last 20 years, there has been a steady increase in residential boaters.
In London alone, between 2012 and 2019 there was an increase of 84% of residential canal boats. Due in part to the 2008 recession many Londoners looked for cheaper properties within central locations. This way of thinking occurred again after the financial crisis caused by the global pandemic last year.
Boat seller, Waterlodge, have reported selling 50% more houseboats in 2020 compared to 2019, this was despite them being closed for two months because of the global pandemic. Currently, the Canal and River Trust predicts there are more than 4,300 residential moorings in the capital city, with the Inland Waterways Association predicting further growth of up to 52% by 2022.
Sales of land properties are under no threat. Mortgage availability for houses and flats has improved and interest rates on new mortgages remain low at 1.78%. There is also the new help to buy scheme for first time buyers, which allows borrowing 40% (London) or 20% (rest of the UK) of a brand-new property’s value. This scheme is capped depending on the region. With first time buyers able to use it for a property valued at £600,00 in London but only £186,100 in the North-East of England.
Considering the plethora of property choices for first-time buyers, why are many buying canal boats? Living on a canal boat is for the most part a low-cost way of life. In many ways, it is more environmentally friendly and sustainable. For most boaters, there is no stamp duty. However, there is a mooring fee, which applies to residential and leisure boat owners.
There is no set price for mooring and it vastly changes depending on the size of boat and location. It was recently reported that to moor in the borough of Chelsea, London, it cost around £13,500 per year for a 73ft barge. There are also costs for running the boat, such as fuel, electricity and insurance. The high mooring fees can be avoided by moving to a town or village as opposed to a city. Or by following the traditional way of living on the waterways by living “on the cut;” this means to continuously cruise (move) a canal boat along the canals and rivers.
Although the low-interest rates and new help to buy schemes are set to boost the UK property market in the first quarter of 2021, it is predicted this will not last long. With the stamp duty holiday set to end in March and the full effects of reduced salaries, furlough and redundancies to become apparent, we could see an increase in people struggling to get on the traditional property ladder and instead are looking for more affordable options, such as on the waterways.
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