December 30th 2014
With the end of the year in sight and all the boats laid up for the winter this is the time we reflect back on the season’s work.
We are regularly asked what the market is like for selling boats both by owners who currently have boats for sale and by owners considering putting their boats up for sale. The answer you will not be surprised to hear me say is never simple.
Our experience is that after the crash of 2008 our market did not change for a couple of seasons. It was not until 2010 that boats stopped selling as the effects of the crash penetrated from the bankers – who were already back at their desks – down to the yacht owner in the club bar.
This prompted a large number of calls instructing us to reduce prices as owners realised the doom and gloom in the media did actually affect them but nevertheless 2010 and 2011 were not good years for owner’s wishing to sell.
Of course the buyer’s money was still out there, money doesn’t just disappear but there was an understandable lack of confidence to spend it. However by 2012 many buyers realised there were some cheap boats to be had so boats began selling again.
These things always seem to go in waves of boom and bust despite the efforts of politicians of all hues.
2013 brought a shift in the economic wind. Buyers were more plentiful as confidence gradually increased while prices still remained relatively low.
By relatively low we mean that we were seeing boats selling at 12% – 15% below what we considered to be the correct value. If you then consider that most owners – and some brokers – will ask 10% above that value we were seeing sale prices of up to 25% below advertised prices.
(Advertised price as opposed to value is the subject of a separate commentary so watch this space.)
Of course we cannot apply this experience uniformly across the board and no doubt there will be some of you out there with a totally different individual experience but this is certainly the trend we experienced.
In this office 2014 has continued from strength to strength largely due to some useful international sales as a result of Richard’s travels. There are signs of this confidence penetrating down the scale but we continue to see resistance in the area which used to be a stock market for us – the £20k to £50k. This is the area the social science guys describe as Middle Income and these people are struggling to find the spare money for what can be quite an expensive sport.
On that point, it is not always the purchase price that makes us hesitate to buy a yacht but the running costs. The capital asset is still there give or take a bit depending on the market, condition and location but costs are spent money.
Costs can be divided into several headings – mooring, insurance, lift-out, winter storage and relaunch. Then there are the services like engineers to winterise and recommission the machinery, marine electricians to sort out the electrics that have gone wrong over the winter and the occasional boat builder’s cost of repairs which can crop up.
Of these, the most expensive by far are the mooring costs and one can only think that it is supply and demand that pushes these up. Compared with many French berths ours are astronomic but of course they have a bigger coast line than us and fewer boats, always ignoring much of the infamously wealthy Med coast, although even French prices are increasing now.
We find that insurance costs have if not actually reduced at least remained steady. We like to think the reason for this is that insurers have finally got around to realising that wooden boats are not just the preserve of the eccentric and not all wooden boats are festering old wrecks crewed by long haired drop-outs with consequent high risk.
Celebrity ownership, glamorous photos in the best magazines and huge, well publicised classic boat regattas have all contributed to this very welcome change.
Labour costs are always a source of contention. I often say to and about traditional boat builders that if they want to live in luxury and drive fast cars then take up banking – although equally I also hear from many bankers who claim they would sacrifice their bonuses to lead the life of a traditional boat builder, knee deep in wood shavings with the smell of pine resin and tar in their nostrils. Talk is easy!
However if traditional boat builders want to practise and enjoy a way of life which allows them to exercise their skills at a time and a pace they choose then they will inevitably have to accept that they will never be in the big bucks league. I have often heard claims that boat building is an art not dissimilar to that of a painter or a sculptor and few of those died rich men.
Far be it from me to deprive a craftsman of a fair living but in return I want a fair job. We see some very skilled craftsmen doing wonderful work and these guys deserve to be paid accordingly but we also see the others who often don’t deserve to be paid at all yet still offer their services.
It is noticeable that the best boat builders are also frequently the fastest so they earn their money twice over. However I am not willing to pay for a young man just out of college taking an age to do what is often not even a decent job. We all yearn for a return to the time when boatyards were able to take on apprentices and skills and permissible commercial short-cuts were learnt on the job. I and many others we speak to are willing to pay for that.
The welcome change we are seeing is the number of students enrolling at the boat building schools but school learning does not make a professional. That only comes with experience.
On the subject of annual maintenance how many times do we hear that if there is a yacht on the tin then expect to pay double? One day someone will explain to me why anti-fouling paint has to be so expensive or why a tin of white paint with a yacht on it is twice the price of Dulux from the local builder’s merchant.
I welcome all explanations and will willingly publish them but I want evidence from the technicians, not from the marketing boys.
It is easy for yacht owners to moan about costs, no doubt they always have and they always will. I have read stories of the owner of a million dollar J-Class yacht complaining about the cost of sail needles.
The bigger the boat the bigger the costs, even if the big boats actually costs less to buy than the smaller boat.
I frequently say to people, before you buy look at the first owner. Take a guess at his disposable income that not only allowed him to build a new yacht but also to run it. Now, just because you are buying that yacht at a fraction of what he paid you will still have the running costs. Indeed you may well have greater running costs because the boat is probably 50 years older.
The real joy is that, provided we can run the yacht successfully we have the pleasure of sailing a boat which we could never have afforded when she was built.
And the extraordinary factor in all this is that we are still sailing boats of this age and sailing them just as hard as the first owner did.
What other material, what other craftsmanship and labour can or will ever be able to compete with the classic wooden yacht?