A Salutary Tale

[Christine]

I’m my dreams I have explored the option of selling up, sinking a lot of the funds into buying a boat and living off the remaining money and getting off the housing ladder. Sensibility has quickly ruled out this option.

 

Occasionally would be purchasers of boats have mentioned on here that they are thinking of selling their house and buying a liveaboard, often at retirement and not giving a lot of consideration to what happens 10 years of so down the line when they cannot continue to live afloat.

 

Today I met a couple who did something like that. They chose the motorhome, trailer parks in the Algarve and southern Spain option. At retirement they sold their house at a bit below market value to their confirmed bachelor son with the unwritten proviso that they could return to live in the house if things didn’t work out. They had their state pensions and a small occupational pension to live on and also ate into the capital from the house.

 

A few years ago, son meets the woman of his dreams; married and had a child. Last year she left, petitioned for divorce and half a stake in the house. The house is a week from being sold.

 

The couple now aged 75 & 73 returned to UK in September to get the van serviced etc. While they were here, husband suffered a big stroke. He cannot drive, wife can drive but with difficulty and cannot manage gas bottles etc.

 

They are currently living in their motorhome at £10 a night on a touring camping site but like most, this will close for December. They applied to the local authority to be housed but were found to be ‘intentionally homeless’ as they had sold their house. They applied for Pension Credit and housing benefit but have to wait several months to be considered ‘habitually resident in the UK’. They cannot afford the rent in advance or damage deposit to get into private rented accommodation without selling the motorhome first.

 

I state the facts and I am sure that things will eventually work out for them but they said the 10 glorious years of travelling have sped past and they just didn’t want to come home. I asked them what their worst problem was – they said they just couldn’t bear being indoors. Regrets? No, but in hindsight they wished they had planned better for their ‘second retirement’ from the open road because their happy memories have now been soured and they are pretty vunerable at a time when thay can least manage.

Edited December 2, 2006 by Christine

[bottle]

Hi

 

I am one of those that is selling everything to liveaboard and I do not know what will happen tomorrow and as for ten years no idea.

 

If you had asked me ten years ago, would I be wanting to do this the answer would have been no (never been on a boat then).

 

I have every sympathy for this couple and wish them well.

 

There is one bright thing (although not much) the problems happened when they were in this country, if they had been abroad, it could have been worse.

 

In hindsight, I am sure they would have done things differently but we can only make decisions with the knowledge we have at the time.

[anhar]

Hi

 

I am one of those that is selling everything to liveaboard and I do not know what will happen tomorrow and as for ten years no idea.

 

If you had asked me ten years ago, would I be wanting to do this the answer would have been no (never been on a boat then).

 

I have every sympathy for this couple and wish them well.

 

There is one bright thing (although not much) the problems happened when they were in this country, if they had been abroad, it could have been worse.

 

In hindsight, I am sure they would have done things differently but we can only make decisions with the knowledge we have at the time.

Hello Keith

 

We've had this discussion several times as you'll recall and I'm with Christine on this. Unless you retain a property or are rich enough after selling your house to retain sufficient money that will as far as you can guess be adequate to return to the property market in several years, I find it foolhardy for an older person to become a liveaboard knowing that they have no means of returning to a property. I can understand a younger person doing it but not farties with no escape route.

 

I think there is a flaw in your argument in the final para where you state that you can make decisions only on current knowledge. The great likelihood is that anybody over a certain age will become ill or infirm in some way. We're all going to die at some stage and unfortunately that is often accompanied by a prior period, which can be lengthy, of poor health. Much too poor for the required rigours of boating even with a couple of whom one is still reasonably healthy. Therefore part of one's current knowledge used to make the decision when over a certain age and considering becoming a liveaboard with no means of return to land includes the high chance of falling too ill to boat. You actually do know now, that you or your partner or both will almost certainly at some point no longer be able to cope with boating and it will then lose its attraction. Yet you knew all along it was very likely, right from the start.

 

What you are saying in effect is that yes you know this may well happen but you choose to ignore it. It is though part of your current knowledge because it does happen to most people. I wish you all the best of course and in one sense admire your willingness to go this route, can't see myself doing it though unless I leave the door ajar with a decent wad in the bank or the retention of some small property somewhere.

 

regards

Steve

Edited December 2, 2006 by anhar

[bottle]

Hello Steve

 

Yes I do know that one if not both of us will fall ill at some time but that will also happen if we stay in our house.

 

I have not disregarded this, it is a risk that we are both willing to take.

 

Perhaps we are naive in this but we have an overwhelming wish to do it, yes silly/stupid but this will be the first time in our lives to do something outside the 'norm'.

 

We have worked hard, managed to help our daughter to get on the property ladder, she has now found a partner, and they are talking of selling both their houses and moving in together (another 'dangerous' thing to do, it may go wrong, they may split, legalities who owns what etc).

 

Most things can be mitigated for but sometimes the chance has to be taken.

 

I respect your thoughts and thank you for them.

[Christine]

In the course of my work I meet all sorts of folks and I have to say the couple in question were far more interesting than many. This couple had many tales to tell and were philosophical about their current situation. However before embarking on any expedition it is prudent to make an audit of ones capabilities and finances with a margin in both.

 

The greatest of life’s changes can happen in a trice – a road accident, a stroke, or bereavement. We are not in absolute control of our destiny but we have to find a balance between foolhardy (and I guess there a few of those out on the Cut), adventurous (like Bottle) or living a life full of regrets that life has passed them by and the kids are about to squander all their hard won savings.

 

..............now what for sale today on the 'Duck' site

[bottle]

Hi

adventurous (like Bottle)

 

I wish I was, I have throughout my life planned, re planned, checked, double checked and checked again.

 

It is only now, through circumstances that were beyond my control (although I tried hard to control them) that we have made this (foolhardy ) decision.

 

As a colleague once said: If you don't do it you will always regret it.

 

Now I would not suggest that everyone follows us, as Steve says you have to be aware of the possible problems ahead but there is always that uncertainty and all the pre planning will not see all the pitfalls.

 

Some times 'you' have to take the chance.

[Dr Bradley]

Like Bottle I am selling the house to live on a boat. Several years, hopefully, of enjoying life instead of the daily drudgery is well worth the risk to me. I know it wouldn't suit everyone but it's a sailor's life me.

 

Please don't mention 'burning my boats' -too close to home

[NB Alnwick]

We have decided to take the same risk - the house has become no more than an expensive way of storing those things that we do not need on the boat and probably do not need full stop. It is a very hard decision to take and for our own part one that is accompanied by considerable nervousness. It would be a very bad thing if, through illness or old age we are no longer able to enjoy boating and have to find a way of moving back onto the land but it would be a much worse thing, if we kept the house and found that we could no longer afford to spend the whole year boating and had to spend our miserable lives in an expensive house watching day time television because life has no other purpose.

 

Life passes by quickly enough and it would be so sad if we reached the age of 80 only to reflect that we could have spent more time boating but were afraid to take the risk . . .

[anhar]

We have decided to take the same risk - the house has become no more than an expensive way of storing those things that we do not need on the boat and probably do not need full stop. It is a very hard decision to take and for our own part one that is accompanied by considerable nervousness. It would be a very bad thing if, through illness or old age we are no longer able to enjoy boating and have to find a way of moving back onto the land but it would be a much worse thing, if we kept the house and found that we could no longer afford to spend the whole year boating and had to spend our miserable lives in an expensive house watching day time television because life has no other purpose.

 

Life passes by quickly enough and it would be so sad if we reached the age of 80 only to reflect that we could have spent more time boating but were afraid to take the risk . . .

I'm not saying that people shouldn't do it, all I'm saying is that a financial escape route back to land is highly desirable. This could be achieved by having a suitably large sum remaining in savings after buying the boat or retaining a modest property somewhere.

 

What I find to be one risk too far is where there is no financial means of return to land after a period of years when property prices may have risen dramatically. You are then in a watery trap. And there can be several reasons why one might wish to return to land, not only the obvious one of being too infirm to handle boating. You might simply get tired of it. The costs of boating, which already equal or exceed the costs of running a modest house, may escalate to the point where you can no longer afford it comfortably. Or for a couple, one partner may die and the other not wish to carry on with boating on their own.

 

There are so many reasons why an elderly person or couple might wish at some point to live back on land, with all the comforts that brings, that to be financially unable to do so strikes me as highly undesirable.

 

regards

Steve

Edited December 2, 2006 by anhar

[smileypete]

Hi,

 

If thinking of selling a property, why not remortgage and rent out, use the equity for a boat, with the rent paying the mortgage and maintenance?

 

cheers,

Pete.

[Badger_1]

To all those planning to follow their dreams and try living on your boat - I wish you all the best wishes in the World.

Its a big and brave decision and I applaud you for it.

 

Many of us will one day proberbly end up alone, sitting in a rocking chair in an old folks home, but oh what stories some will have to tell of their times on the water whilst others will bore us silly telling us of how they once mowed the grass, cut the hedges and washed the car and all before Sunday roast was ready at 1pm.

 

Go for it and may Neptune go with you!

Edited December 2, 2006 by Badger_1

[bottle]

Hi,

 

If thinking of selling a property, why not remortgage and rent out, use the equity for a boat, with the rent paying the mortgage and maintenance?

 

cheers,

Pete.

 

Hi Pete

 

In theory your idea is good but when you get to a certain age (not necessarily state retirement age) the possibility of getting a mortgage reduce remarkedly fast.

 

I will not go down the 'take your equity now' line either, biggest con going in my opinion.

 

The price of my boat will be in the region of 120 to 140 thousand, I doubt my pension would cover that and nor would renting out my existing property.

 

To get that, my income would have to be in the region of £40,000++ a year and I didn't earn that when I was working.

 

Yes I could get a cheaper boat but this one will be bespoke.

 

To the ones, like me, foolhardy? in going for it good luck and see you on the cut one day

[Pirate]

Well the way I see it, if it all went pear shaped for whatever reason, you still have a boat to sell and although you may not be able to afford your own property, (although a static caravan could be a choice) you certainly wont be paupers, and would have a little behind you if you have to rent, and you may be suprised at the ammount of money you are allowed to have and still be able to get some help towards your rent from the council.

 

I say, if thats what you want to do, Go for it, enjoy it, and do all your worrying when the time comes, you only live once, make the most of it

[blackrose]

I've never owned a house or flat so didn't sell up for the boat. My boat is my home and I'm putting everything into it. I know a lot of others in my situation too but we're a bit younger than retirement age. What amazes me about this thread is the extent to which people depend on their property for security. It wasn't always this way - even 20 years ago. It seems to me it's only this crazy increase in house prices that has fueled the desire for property (and security) - not the property itself. I'm not sure this will last forever, memories are short.

 

I received this interesting email from a friend the other day:

 

The Lawson Boom of the mid-Eighties brought with it Big Bang in the City and a general easing of the financial guy ropes. Welcome to Yuppie Hell. This time next year, Rodney.

 

Suddenly, the mortgage market was deregulated. Overnight, a whole raft of new lenders entered the market, Johnny-Come-Lately operations with reassuringly traditional names.

 

There used to be a gelled spiv in a Gordon Gekko suit who propped up the bar in The Old Bell, in Fleet Street, and worked for an outfit with a seemingly respectable name.

 

He was known as Mickey the Mortgage Monster and he made his commission knocking out huge home loans to hard-up hacks.

 

Instead of begging the banks for a mortgage, they were now begging you to take one out.

 

A friend of mine secured - if that's the word - a £200,000 loan on a house in London's upscale Highgate. When I asked him how he'd managed it on a salary of £25,000 a year, he replied: "I told lies."

 

He simply typed a letter on a piece of his newspaper's headed notepaper, claiming he earned £75,000 a year. No one bothered to check.

 

He calculated he could meet the repayments by juggling all the credit cards being thrust in his direction.

 

I can remember him brandishing his Bank Of Kuwait gold card, which he ran up to the limit. When Iraq invaded Kuwait during the first Gulf War, we worked out that his house belonged technically to Saddam Hussein.

 

Today, he wouldn't have to tell lies. As the Mail reported yesterday, banks will lend insane multiples of joint income, up to 125 per cent of the property's value, over periods of up to 57 years, no questions asked, guv. (Why 57, not 60? Who's selling these mortgages - Heinz? Probably. I see Tescos are.)

 

This way complete madness lies. Interest rates are already on the rise again. All bubbles burst.

 

I've never quite worked out whether house prices have gone through the roof because of a shortage of supply, or because sellers know that there's a lot of easy money sloshing around out there.

 

And, as any fairground huckster will tell you, there's a sucker born every minute.

 

Look, I don't want to turn the clock back to 1975 and I'd hate to be in my 20s today trying to get a toe on the housing ladder.

 

Most people of my generation couldn't afford the homes they live in now if they were starting out today. More to the point, they couldn't afford the homes they started out in.

 

But the caution of Mr Mainwaring makes more sense to me than the wild, irresponsible abandon of the modern-day lenders and the tomorrow-never-comes financial hedonism of their willing mug punters.

 

You don't need to have a degree in post neo-classical endogenous growth theory to know that this drunken-sailor spending spree simply can't be sustained.

 

I've often wondered what happened to Mickey the Mortgage Monster.

 

He's obviously alive and well and instead of propping up the bar in a Fleet Street boozer is leaning back in a leather executive chair with his feet on the table of one of our most respected financial institutions.

[elessina]

They applied to the local authority to be housed but were found to be ‘intentionally homeless’ as they had sold their house. They applied for Pension Credit and housing benefit but have to wait several months to be considered ‘habitually resident in the UK’.

 

Maybe sometimes paying council tax on your mooring can be worthwhile!!!.

 

As has been said, there is no guarantee that property prices will continue to rise, indeed many experts believe they will fall. But that said, we are keeping a toe in the property market, by renting out our house. But I know others who have tried this and given up due the worry and hassle involved in the letting.

 

Ian

Elessina

[Hairy-Neil]

Live every day as though it be your last I say, because sooner or later you're going to be right.....

[Duchess Omnium]

No one knows what house prices are going to do over the long run. Most people who've owned one over the past ten years have made a lot of money. But there are plenty of people who think that selling up now (or rather 18 months or so ago!) and staying out of the market for a few years makes good sense.

 

Or maybe not. Gambling on our housing keeping us in our old age is no more certain than any other investment.

 

And none of knows whether we are even going to get an old age!

 

I reckon I have lived a lot of life as an ant. Time to be a grasshopper!

 

If we never followed our instincts and our dreams because good sensible people regularly tell us salutory tales then we might be able to pay our bills quietly, but the world would be poorer (even if we were richer!)

[Lucy Cassidy]

What amazes me about this thread is the extent to which people depend on their property for security. It wasn't always this way - even 20 years ago. It seems to me it's only this crazy increase in house prices that has fueled the desire for property (and security) - not the property itself.

 

Hi Blackrose, you have put your finger on an interesting point there - in the 50s, it was absolutely normal to get married, live with one set of parents for a couple of years, then rent a flat, then move up to renting a house. Hardly anyone had a mortgage. All that has changed in just two generations. Yes - we DO depend on our properties for security now.

 

I wonder if we're all so nervous because we feel that there's no safety net: as in your illustration, an ageing couple suddenly finding that they don't qualify for housing, for rent help, even though they had a house, acted responsibly, and even kindly, by giving it to their son. Is that what we all fear? Is it because we see stories everywhere of irresponsible wasters living it up on the state, while decent folks live in squalor? And we think that it may happen to us - having spent our lives paying tax and being "good", we finally get around to enjoying ourselves for ten minutes, fall ill, and end up living in lay-bys?

 

I like your idea about Mr Mainwaring's caution being a better model for life, than being irresponsible. There's a balance to be sought, I reckon.

 

Hooray for balance!

 

Lucy

[tomsk]

House prices remain upwardly mobile mostly due to laws of supply and demand, this is a situation maintained by developers... There is plenty of land available for building, however the last thing developers wish to do is provide the housing needed at a rate that potentially gluts the market, leading to a downturn in prices and therefore a cut in their profits. See also; Land Banking

Edited December 8, 2006 by tomsk

[Linty]

Live every day as though it be your last I say, because sooner or later you're going to be right.....

 

hi all, hope you don't mind me joining in on this one.. First post though I joined a while ago.

 

What Neil says is only too true. My current partner's wife died after a many years of illness, and he nursed her for 18 of those. He is now determined to live the rest of his life to the full grabbing opportunities as they come, because you never know what's round the corner.

 

He has taken a chance on a new life with me, sold up his home and we have had our nb built from new on the proceeds, we are still in process of furnishing it, and in using and looking after it, are on the first part of a steep learning curve.. but we LOVE it, mistakes and all.

 

I guess in some ways we have the best of both worlds. He took early retirement to look after his wife, and remains retired, though on minimal income, he therefore has plenty of time to cruise. I work a wierd (to most) shift system which means I get two weeks off every 3 weeks, so I can join him and it also enables me to cruise lengthy periods of the year with him while he is living aboard. I have my own property and working as I do, can afford the mortgage to retain it. Yes, it is a security, and not one I would like to lose for the very reasons others have previously posted - ill health etc.

 

We may well sell up my house one day too, but only to downsize now my son is adult and will make his own way in the world. I guess I will always want to keep a landbase. I wouldn't want to be marina bound should ill health make it impossible to explore the canal system.

 

Linty

[Bones]

I don't think I would sell my house to buy a narrowboat. I was going to live on a boat years ago while I saved up a deposit for a house (yes, I did the sums and it was cheaper than renting), one thing and another meant I didn't and I ended up with a bricks and mortar place anyway. Due to one thing and another I ended up without it anymore and with a boat.

 

I have never thought about about leaving the boat for a house.

[Carrie]

Hi Linty and welcome. That's a cheering story and I wish you both well with your new life.

 

We live in fear, most of the time. Fear of not getting on the property ladder, and of being able to meet the mortgage payments when we do; fear of getting tied down or of never finding a partner; fear of getting pregnant, and of not being able to, etc, etc. all through life. Often people only realise their own freedom to take life in their own hands and shape it for themselves, once they are much older. I say do what is right for you and do it now! There will always be 1000 cautionary tales to hold you back (and another 1000 if you don't do it!). Reclaim power!

[Eastern]

Isn't it about taking a calculated risk?

We bought our house 20 years ago for £60K, today its 'worth' £450K.

If you are going to sell your house (which is has been an appretiating asset since the 1990s) and buy a boat (which is a depretiating asset) you are going to loose money if you are stepping off the property ladder.

Money itself is not that important per se, its the fact that it gives you choices 5 or 10 years down the line.

 

There are ways to take some of the capital gain out of increasing property prices without selling up, such as equity release etc. Our plan is sell up, buy a narrowboat, and invest the remains in 'buy to let', so that we will have further income and hopefully some capital gain.

 

I hope this doesn't sound too much like a smug capitalist! (I'm quite a nice person really)

[blackrose]

With all this talk of selling houses to live on boats as "risk taking" it seems to me that just as the increase in property prices during the last decade has afforded property owners more opportunities to enjoy their lives, it has at the same time imbued many with such a fear of losing what they have gained that it has imprisoned them within the property mentality & culture.

 

By the way, although the word 'property' has been appropriated by the real estate industry to refer to flats, houses and land, it actually means anything one owns, so in that sense we are all property owners. However, I believe that we cannot truly own anything and are merely caretakers on this planet.

[Carrie]

However, I believe that we cannot truly own anything and are merely caretakers on this planet.

 

I agree with the first part, but not the second. Everything takes very good care of itself until we mess it up!