Born in London, Waterman grew up in Woodside and Croydon, and at the age of eleven won a scholarship to the Trinity School of John Whitgift.
He left before sitting his A levels, and after six years of clerical and manual jobs in London and Jersey began studying English at the University of Leicester as a mature student, graduating in 1966.
With the help of poet G. S. Fraser, Waterman was then awarded funding to conduct postgraduate research at Worcester College, Oxford, although he stayed there only briefly and did not graduate.
[2] From 1968 to 1997, he lectured in English Literature at the University of Ulster, Coleraine, and in 1998 retired to Norfolk.
[3] In "Ulsterectomy", Waterman commented on how writers who happened to have been born in Northern Ireland are claimed for that nationality, ignoring their other cultural influences.