With these rules, it's plain sailing: Peter Rodgers advises boat buyers on how to keep everything shipshape

BOATING is expensive and occasionally dangerous. The British weather is usually terrible and much of the time sailors are battered, cold and wet.

Even more off-putting, buying a boat demands exactly the same grit, determination and financial expertise as that other masochistic British sport, buying a house.

Nothing daunted, Britons are as enthusiastic as ever about getting on the water and spending money doing it. A survey for the British Marine Industries Federation, published for the start of the Southampton Boat Show this weekend, says the average boat costs pounds 13,830 and a typical enthusiast spends more than pounds 500 a year.

One of the easiest ways to buy that boat is to raise a marine mortgage, closely modelled on the conventional product for bricks and mortar. The mortgage is secured on the boat rather than your house, so if you fail to keep up payment it is your pleasure rather than your home that suffers.

Lombard North Central, the NatWest subsidiary that claims to be number one in boat financing, has made the resemblance to home finance even closer by offering marine mortgage certificates.

These can be thrust in the face of a vendor to prove that funds are available, so the buyer in effect becomes a cash customer. The certificates are valid for six months.

The certificate is particularly useful at the moment for buying a second-hand boat, where the market has been booming. Just as with a house, cash can get the price down and clinch a deal against competing offers.

Trevor Hewitt, a Lombard marine mortgage specialist, says business in the first half of 1994 was 60 per cent higher than a year earlier after several flat years. Most mortgages were for second-hand boats as the new boat market has been in the doldrums, though it is now beginning to improve.

Lombard insists on a survey and valuation for all loans above pounds 15,000. Below that level the Consumer Credit Act would force it to put the cost of a mandatory survey into the APR of the loan, which inflates the interest rate.

In fact, it is sensible for any purchase of a boat costing more than a few thousand pounds to be made subject to survey. As with a house, the threat of hidden defects is serious and may need specialist expertise to detect.

Lombard has issued more than 200 marine mortgage certificates this year and expects to lend more than pounds 25m by December.

The minimum loan is pounds 5,000 and the maximum is 80 per cent of a boat's value, without any upper limit. A pounds 5,000 loan for 80 per cent of the value would finance, for example, a second-hand 20ft day sailing boat without a cabin or a small motor cruiser.

Repayment period for a pounds 5,000 mortgage is five years, rising to 10 years for pounds 10,000 or more. For a pounds 5,000 loan the APR is now 9.9 per cent while for a pounds 20,000 loan it falls to 8.8 per cent, only a little above the home mortgage rate.

Buyers of new boats are also advised to employ a surveyor to ensure the craft is up to standard before it leaves the yard. A list of surveyors can be obtained from the Yacht Brokers, Designers and Surveyors Association at Wheel House, Petersfield Road, Whitehill, Bordon, Hampshire, GU35 9BU (0420 473862).

As with buying a house, an anxiety-ridden part of buying a boat is establishing legal title and checking there is no existing mortgage. This is easy if the boat is fully registered under the Merchant Shipping Act because any mortgage is only valid if it is on the registration certificate.

For all other yachts it is a case of buyer beware. The Department of Transport-backed Small Ships Register, useful to prove ownership of yachts when taken abroad, is not a title deed and gives no indication of whether there is a mortgage.

Because of difficulties over title Lombard is unlikely to lend more than pounds 50,000 on an unregistered boat. The drawback of full registration is the cost - a one-off pounds 370 through an agent, pounds 100 less if you organise it yourself.

It is rare for solicitors to be involved in buying and selling run- of-the-mill boats, though their services would be advisable in buying an expensive craft, especially one that has not been fully registered.

The Royal Yachting Association (RYA House, Romsey Road, Eastleigh, Hants, SO5 4YA, tel: 0703 629962) offers legal advice to members on buying both new and second-hand boats.

(Photograph omitted)