Sunday, Feb 14, 2010
The Wilsons in the news again.
Mail online: The buy-to-let gurus' empire crumbles
Dollops of Sunday schadenfreude for the anti-homeownerists.
Posted by p. doff @ 04:26 PM (2182 views) Add Comment
20 Comments
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1. Alan Lubin said...
15% of their properties don't even yield enough to cover the mortgage at current interest rates!
A couple of points on the base rate and i think we can safely say that there will be a deafening barrage from the popping of Champaign corks going off on the HPC forums.
2. quiet guy said...
"It is likely that lenders have 'encouraged' the couple towards a solution that avoids repossession or wholesale receivership. 'How else would you manage a situation where two out of three homes in an estate were repossessed?’ asked one lettings agent. This view is supported by the fact that at least one lender - the failed Bradford & Bingley, now supported by taxpayers - has renegotiated the Wilsons' mortgage terms. In April 2009, B&B, to whom the couple paid a staggering £350,000 in monthly mortgage interest, allowed them to swap a fixed mortgage rate of 5.24 per cent, maturing in 2012, for a variable rate of 2.25 per cent. Ordinary borrowers in difficulty could only dream of similar assistance."
So they're getting help to bail them out. Sounds familiar.
3. paul said...
The Wilsons in IVA. Smugdog is nowhere to be seen of course.
4. Thecountofnowhere said...
Calling all Wilson tennats.
They are paying less for their debt:
"allowed them to swap a fixed mortgage rate of 5.24 per cent, maturing in 2012, for a variable rate of 2.25 per cent"
Thats 57% less....it is time to renogotiate your rent DOWN BY 57% !!!!!
5. little professor said...
Thanks to their smart property speculating, Judith and Fergus Wilson had an estimated personal wealth of almost £100m.
No, they didn't. They had personal debt of almost £100m, and presumed they had assets worth more than that. But in fact, they were bidding up the price of the assets by attempting to corner the market in Ashford - meaning that they were overpaying hideously, and foretelling a very sharp drop in the value of the assets once things started to unravel. The debt of course will not shrink.
In April 2009, B&B, to whom the couple paid a staggering £350,000 in monthly mortgage interest, allowed them to swap a fixed mortgage rate of 5.24%, maturing in 2012, for a variable rate of 2.25%. Ordinary borrowers in difficulty could only dream of similar assistance.
Such action is 'unheard of', according to Lee Grandin, a mortgage broker for landlords and an authority on mortgage lending to the private rented sector. 'If there is no problem with cash flow, it is hard to see why landlords would want to enter into management arrangements,' he says.
The Wilsons are hanging on by the skin of their teeth. I really don't see what B&B have to gain by renegotiating the terms, other than putting the eventual default off their books for another few months. There is no way the Wilsons will ever be able to pay back what they owe - they simply don't have anywhere near the assets to cover their debts.
6. krustyatemyhamster said...
P.Doff
I don't see many people on here objecting to home-ownership, just rightful indignation that the money of those that didn't gamble recklessly is being used to bail out those that did, thus further preventing them from being able to buy a house at a sensible price. In this instance it appears that a (failed) state-owned bank is providing a subsidy to a failed business to deliberately prop up prices. If that's not worth getting angry about, I don't know what is. All the schadenfreude at the moment belongs with the Wilsons and their ilk, laughing at all the tax-paying suckers out there.
7. little professor said...
For reference, the article from November last year, in which the Mail alleged the couple were £350,000 in arrears with their monthly mortgage payments. The Wilsons said it was untrue and the cheque was 'lost in the post' - as if they pay their 177 mortgages by cheque.
Judith and Fergus Wilson £350,000 in arrears on mortgage - November 2009
8. little professor said...
We are not anti-homeownership, except when all those homes are owned by one couple, depriving other people of the opportunity to own their own home.
Most of us here plan to buy eventually when prices return to a sensible level.
9. novice pete said...
Agree with Krusty@4 and LP@6. BTL is a culture of Lords & Serfs, very backward looking and non progressive.
10. novice pete said...
to add, goes hand in hand with all the other liberty thieving activities we are allowing our corporate Govenors to get away with.
11. quiet guy said...
@LP 04:58
To be fair, the Wilsons have said they they paid their mortgage in a single lump sum each month, which sounds quite plausible if you have so many mortgages to key an eye on.
http://blog.propertyhawk.co.uk/2009/11/king-of-buy-to-let-throws-down-gauntlet.html
12. Whisky Bravo said...
When you owe the bank a little, you have a problem, when you owe the bank a lot, the bank has a problem...
13. crash bandicoot said...
Even when they do go bust it will be covered up so that it doesn't affect "house prices". It won't be recorded by the Land Registry if the bank repo's them and they go to auction. These days "house prices" are having less and less to do with the actual price of houses.
14. p. doff said...
Krusty & Lp. As I understand it, the definition of the term 'home-owner-ist' in the context frequently used on this site by Mark Wadsworth and others, seems to be anyone who has an interest in high house prices being maintained. It follows that an 'anti-homeownerist' merely has a desire to see house prices fall (which is probably a large proportion of the followers of this site). I bet the news reports about the Wilsons' misfortune/stupidity makes a lot of people here happy - so I hope my reference to schadenfreude in the title summary isn't cause for self righteous indignation. Anyway, regardless of your views about houseprices, we Brits do have a tendency to enjoy the 'rich and mighty' being knocked off their perches - and more so if they have a history of media publicity about their business 'successes'.
15. mark wadsworth said...
P Doff, correct, "Home-Owner-Ist" is the wider economic/political philosophy that simultaneously subsidising home-ownership while restricting the number of new homes that can be built, thus pushing up prices ever higher and getting us further into debt is A Good Idea.
So your interpretation of "anti-homeownerist" is also correct - the problem is that this might be seen as "anti-homeowner" when of course there is nothing wrong with owning your own home, any more than there is owning your own car or anything else.
But that article has brightened my evening immeasurably :-) :-)
16. icarus said...
Buying lots of houses in the same area means it's difficult for the Wilson's to unload them. The flip side of that is that it's difficult for banks to repossess and unload. So the Wilsons are being propped up like banks, full of toxic assets but with no market discovery of the degree of toxicity. Having their debts restructured (lower repayments) is another example of the old adage "if you owe the bank a lot it's the bank that's in trouble".
17. the number cruncher said...
I live about 8 miles (country miles thank god) from his biggest collection of houses in Ashford. They are mostly 2 or 3 bedroom shoe boxes of poor quality and the place is starting to look tired around the edges
It started off being affluent starter homes territory and was all very well presented and well landscaped. But a lot of them are being rented to poorer quality tenants now and even some to families on housing benefit. This is reflected in the rising 'hoody count' and the state of poor upkeep of the gardens.
The Wilsons are not the only BTLers who invested heavily in the area as they where a few other wannabes trying to buy up any house in the area.
Park Farm is a nightmare vision of what our bankers wanted; with little worker bees slaving away to spend 50% of there joint salaries on rent. the whole place is owned by BTLers who have pushed prices up way beyond the reach of normal people and it was all based on debt.
It's a stack of cards ready to tumble as soon as the government withdraws its special liquidity scheme.
18. mander said...
Young families in Ashford it is not time to celebrate. No property of the Willson's portfolio will be sold to you. Remember there is a housing shortage and the lenders will have to keep that way.
19. Reluctantgambler said...
Don't really understand the tone of this Guardian article on the Wilsons and BTL:
http://www.guardian.co.uk/money/blog/2010/mar/06/buy-to-let-wilsons. If the Wilsons really are such 'clever maths teachers', why on earth did they keep on borrowing up to the limit to buy huge numbers of properties and hiking up the debt when they could have played safe and banked some money? I mean, they're not exactly naive twentys-somethings, are they? They lived through the crash at the end of the eighties and should have known that property wasn't a one-way bet, yet they continued to up the risk. Not so clever, if you ask me. And why on earth did they concentrate their properties in one area?
I really don't understand why The Guardian has decided to be so nice to the Wilsons. Since the Bradford and Bingley is now propped up with state money, we're all paying for the unusually lenient deal they've managed to secure on their mortgages. So, in a way, maybe the Wilsons were right after all ... property is a one-way bet, provided you're prepared to be stupid enough to get yourself into a very large amount of difficulty. Then the good old taxpayer will come along and mop up after you. There might even be money for a racehorse or two at the end of it all.
20. Reluctantgambler said...
Great stuff from Mr Wilson:
"We asked for a meeting with our lenders. I said, if you think you can run the show better than me, you can have them all back. They said no. They were determined that we shouldn't go under. If we went under, then everyone went under."
In other words, although he snapping up hundreds of properties in the good years without batting an eyelid, he would now like simply to junk the responsibility and run away.