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Narrowboat depreciation due to diesel's future


piedaterre

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"when roughly will the usability of a diesel boat come to an end?"

Probably far more important is when does the OP think his own usability will come to an end. My guess is a diesel powered narrowboat boat in good condition now, and kept well maintained will outlast the OP in viably boating, both should last for many years though, but not at all if they never get started.

Edited by DandV
Meant in reply to MTB
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I agree with most of the comments above, where diesel boat owners will get caught out is when they enter the upcoming low emission zones that a lot of towns and cities have to implement by law, ok initially its for vehicles but how long before boats get roped in? They have no chance of fitting ant clean up equipment as they dont run hard enough, so they will have to pay to enter! I have converted to electric it suits me very well, the silent cruising is a pleasure also going somewhere for free is a big bonus along with the cheaper license fee, its not for everyone, but its catching on fast very fast 

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My current plan is to live forever (though last nights drinking session almost wrecked that plan) so we will likely need to replace or major rebuild the engine in the next  7 or 8 years. At this point I will consider fitting a large vintage electric motor in the engine room, one of those lovely machines with exposed commutator etc. The only unknown is whether the small fusion reactor needed to generate the 'leccy, has become cheap enough to use in a boat.

 

..............Dave

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20 minutes ago, Mike the Boilerman said:

 

I suspect the OP is totally overlooking these costs, and they will dwarf the cost depreciation amortised over the lifetime of his ownership.

Definitely not overlooked and agree they'll dwarf depreciation.  Circa £2K for mooring - it's cheap up north.  £850 for a licence.  And £150 a month slush fund for general maintenance excluding blacking.  Heating, fuel, gas etc on top of this.  

20 minutes ago, Mike the Boilerman said:

 

 

 

 

This bit warrants closer examination. When roughly, are you imagining "usability of a diesel boat" coming to an end? The date you expect this to happen has a very big impact on the viability of your plans.   

 

 

 

Crystal ball is broken at the moment and I don't think I've ever hinted at an expected date.

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I doubt if it will be a problem for a good few years, my guess is that with todays news about Heathrow aviation fuel will be around for a very long time and I'm sure diesels will run on that. I doubt if boats will be the top of anyone's list for many years as far as bans go. Depreciation though is a big thing to consider, Its not that hard to find a 10 year old boat for x pounds and then work out what it would have cost new and then get a rough figure of depreciation - its quite a lot. Its also not related directly to condition. An 'average' 10 year old boat really only needs a bit of a freshen up to be 'as new.'  If you take into account what the e.g. £ 60.000 would have earned in interest over that time it gets worse. In fact I cannot think of a good reason why I have a boat. I seem to have thoroughly depressed myself.

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45 minutes ago, Naughty Cal said:

Never heard of a remortgage?

 

You don't have to tell your mortgage lender why you want to take out more money against your property.

 

 

 

I would be surprised if the lender does not ask how the money is to be spent.

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3 minutes ago, Bee said:

An 'average' 10 year old boat really only needs a bit of a freshen up to be 'as new.'  If you take into account what the e.g. £ 60.000 would have earned in interest over that time it gets worse. In fact I cannot think of a good reason why I have a boat. I seem to have thoroughly depressed myself.

Having £60,000 in the bank for the last 10 years at (if you are lucky) 0.02% interest would not have yielded much at all.

 

Now - if you had stuck it in one of the Asian banks which offer (and are still offering) 7%-10% it would have earned something worth counting.

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20 minutes ago, piedaterre said:

Crystal ball is broken at the moment and I don't think I've ever hinted at an expected date.

 

And yet it is important enough a factor for you to have selected it as your thread title. 

 

You give the impression that the depreciation due to diesel's future (whatever that means) is the make or break factor. Where does the break even point lie? five years? 10 years? 20 years? 

 

 

1 hour ago, Naughty Cal said:

Never heard of a remortgage?

 

You don't have to tell your mortgage lender why you want to take out more money against your property.

 

 

 

You've clearly never done a remortgage. They ALWAYS ask. 

 

When I was following the BTL thing it was a recurring subject discussion, what you could and could not put on the remortgage form in order to get your application accepted. Putting "borrowing to raise a deposit for next house" generally got you a rejection, but lying was a no-no too. The beautifully loose and whoolly term "for further investment" was acceptable to Mortgage Express..... I think it allowed them to assume you were buying equities or something.

 

 

 

 

Edited by Mike the Boilerman
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The crucial thing in the short term will be if you (OP) propose CCing or need a residential mooring and if so what their availability is. Having owned a boat before, acknowledging that you'll be 250-300 per month worse off by moving aboard and letting out the house, suggests that your costings are well informed and not out of thin air. The diesel engine question is a non-issue.

If you are concerned about taking out too much equity then as a single guy why not just move aboard a smaller, older, cheaper boat and see how the next 12 months of politics / economics pan out? If property prices rise then you can take out more safely, if they fall you won't be in negative equity territory without an unprecedented drop, if nothing changes you just need to work out whether you want to live another year as a liveaboard.

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7 minutes ago, Alan de Enfield said:

Having £60,000 in the bank for the last 10 years at (if you are lucky) 0.02% interest would not have yielded much at all.

 

Now - if you had stuck it in one of the Asian banks which offer (and are still offering) 7%-10% it would have earned something worth counting.

I have a few quid in a Vanguard fund that is doing nearly 5% at the moment, I do watch it carefully though, I have never been tempted by that Woodford bloke but you have to be a bit careful these days.

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1 hour ago, Naughty Cal said:

Never heard of a remortgage?

 

You don't have to tell your mortgage lender why you want to take out more money against your property.

 

 

Yes don't even think of equity release. In my opinion it is the scam of the century and should be investigated. We went down that road and my house is worth £350,000. We got £45,000 for it. At the time we desparately needed the money but when I sat down and thought about it I realised that the equity release people had just bought my house for £45,000. Luckily we were able to buy it back later on but that cost us £65,000 after just a couple of years. First of all I would think that you are far too young to consider equity release. These companies want people who are in their death throes so that they can get their money back and some, quickly. There are much more lucrative ways to borrow money but do not EVER think that anyone who lends you money is doing it for your benefit. They aint.

 

Oh forgot this bit. When the equity release people came round thay wouldn't accept the valuation that I had had done a couple of weeks earlier. They sent their own people in and then they wildly undervalued my house.

Edited by pete.i
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OP should be able by youth, income and fair amount of equity to release some of that equity by remortgage/second mortgage as he has suggested. I don't think he was ever looking at those dodgy 'equity release' for the elderly ripoffs.

 

Seeing mention of £2k for a mooring is this properly residential (Council Tax?) or would you have to go under the radar, spend more than half your time out on the cut?

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I agree with Cuthound who pointed out that diesel engines can run on various biofuels. Biofuels are carbon neutral so will survive any kind of regulation (at least for use cases such as heavy machinery, emergency generators and boating). They are not even that much more expensive than diesel, their main problem is the amount of land they take to produce - but this is being tackled with bio engineering and potentially harvesting algae and kelp from the sea. So I think the whole premise of your concern is false - diesel isn't going away soon and when it does there is a cheap(ish), carbon neutral, and easily convertible solution on the horizon.

 

Right now of course it is impossible to run a narrowboat year round without significant burning of fossil fuels, no matter how many solar panels and windmills you install.

 

However your concern about depreciation is very valid, just not for the reason you are concerned about. For financial purposes you need to look at a boat as less like a house and more like a car. If you wouldn't remortgage to put money into a car, due to their steep depreciation curve, then you have your answer for whether to do it with a boat. And that is not counting maintenance costs, which may well be underestimated at 150 GBP/month, depending on your luck.

 

 

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15 minutes ago, Machpoint005 said:

...which would depreciate by about half its value every ten years.

 

I think this is broadly right where boats are concerned, but with a few notable exceptions. I recently saw my first NB (for which I paid £9k in about 1983) for sale at £28k!

 

The diesel issue as someone said earlier, is a non-issue. So what if you have to pay £10 to cruise through Leicester or Brum in ten years' time?

 

 

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1 hour ago, Mike the Boilerman said:

 

And yet it is important enough a factor for you to have selected it as your thread title. 

 

You give the impression that the depreciation due to diesel's future (whatever that means) is the make or break factor. Where does the break even point lie? five years? 10 years? 20 years? 

 

I think the clue's in the sentence as to what it means.  If you didn't understand what it meant then just ask, and I'll explain.  If not, by all means opt out contributing.

 

 

 

 

 

 

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11 minutes ago, ivan&alice said:

However your concern about depreciation is very valid

I might have been 'lucky' but in 18 boats I have only lost money on 1 boat (the one the surveyor 'cocked-up on and I lost £60k on that one) and that not only includes full recovery of the purchase cost, but recovery of the additional 'improvement costs' (solar panels, pram hood etc etc).

Obviously on-going maintenance, mooring, licence costs and so on are just that - costs.

 

Never had a survey (after the 1st one) and never had a purchaser request a survey.

 

Buy 'right' and sell 'right'

5 minutes ago, Mike the Boilerman said:

The diesel issue as someone said earlier, is a non-issue. So what if you have to pay £10 to cruise through Leicester or Brum in ten years' time?

 

Well worth twice that to get out of both of them.

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5 minutes ago, Mike the Boilerman said:

 

I think this is broadly right where boats are concerned, but with a few notable exceptions. I recently saw my first NB (for which I paid £9k in about 1983) for sale at £28k!

 

The diesel issue as someone said earlier, is a non-issue. So what if you have to pay £10 to cruise through Leicester or Brum in ten years' time?

 

 

£9k in 1983 and £28k in 2019 have pretty much the same value. Cash costs less to maintain than a boat though.

 

JP

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I've be looking to moor in a place used last time, big enough place, plenty of boats and they allow liveaboards who largely go under the radar.  

 

I agree with the analogy of comparing it to buying a car and whether anyone would choose to borrow money against their home to do this given it's a massively depreciating asset.

 

I think the maths do stack up, and I'd be worse off by moving to a boat by at least £300 a month.  And this is a minimum.  It doesn't take into account the opportunity cost of what the £40K might do if it were spent on a bigger house which'll appreciate overtime.  Or sticking in funds.  I'm putting money away in Vanguard equities and index linked trackers every month and seeing decent returns.

 

Perhaps it's more prudent to borrow £20K and have a leisure boat.  Associated mooring, licencing and running costs will be lower.  And it'll be much newer.  Used Aintree 25ft boats are around the £25K mark.  I could always upgrade in later years to something bigger when more of my home's paid off and the risk becomes less.

 

I wouldn't have the worry of a potentially not-let property and having to cover the cost of a mortage plus the running of the boat too.

 

Re. diesel and the future of narrowboats, doesn't look like it's too much of a worry then!

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12 minutes ago, piedaterre said:

I think the clue's in the sentence as to what it means.  If you didn't understand what it meant then just ask, and I'll explain.  If not, by all means opt out contributing.

This is a public forum so it doesn't work like that - you start the thread but with in the T&Cs of the site anybody can say anything they like. Members can use this thread to discuss anything they like, they don't even have to be discussing the topic you started. I say this because this does happen and will happen a lot. 

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1 minute ago, Tumshie said:

This is a public forum so it doesn't work like that - you start the thread but with in the T&Cs of the site anybody can say anything they like. Members can use this thread to discuss anything they like, they don't even have to be discussing the topic you started. I say this because this does happen and will happen a lot. 

Yep but we all know Mike was being deliberately obtuse in his response.  Anyhow, no more airtime from me being given to it.  At best it's boring.

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5 minutes ago, piedaterre said:

Yep but we all know Mike was being deliberately obtuse in his response.  Anyhow, no more airtime from me being given to it.  At best it's boring.

 

No, I have been trying to make a serious point and discover your thinking and views on the subject. 

 

But yes, I agree your posts are very boring now, given you won't engage. 

 

 

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