Fergus Wilson And Grant Shapps -- solving housing crisis

[The Knimbies who say No]

The problem is not that they are benefits but that the government is pursuing the IMO mad policy of paying rent money to tenants rather than to landlord.

The justification for this is that it gets them used to budgeting and handling money. Well, yes it does, but at too high a price.

This means big collection problems / rent arrears for landlords so that people on benefits go from being a guaranteed and secured income stream for landlords to a big potential headache.

Dogma over-riding common sense.

The benefit belongs to the tenant, not the Landlord. It causes issues, no doubt, but I'm tired of paying rent which is largely a reflection of HB rates in my area, when as a timely payer who looks after the property well I fee the discount applied to me and the vast majority of renters like me should be a fair chunk of the "top dollar" price of HB which ought to reflect the risks of nonpayment.

For the serial non-payers, would the application of a discount on the rent for LLs who are paid directly, to reflect the reduction in risk, be appropriate? I'd suggest so.

[SarahBell]

but I'm tired of paying rent which is largely a reflection of

How would you feel about paying a mortgage which is largely a reflection on house prices in the area?

[The Knimbies who say No]

How would you feel about paying a mortgage which is largely a reflection on house prices in the area?

Even worse, at present. Still, saving money by renting vs buying is a pyrrhic victory given the huge costs of either option.

[@contradevian]

Who knows what they are trying to do behind the scenes, hopefully it will all blow up and there will be a Bonfire of the BTLies.

Will require genuine regime change, but with a nation of amateur Rachmans what hope have you got?

Last real regime change was over 1000 years ago, and was a foreigner. Don't make me laugh with four/five yearly Labour/Tory musical chairs competition.

[19 year mortgage 8itch]

Yes. He hasn't made the link re the effect of lowering HB on ALL rents.

He was only a maths teacher after all.

[Bear Goggles]

Evicting HB tenants in favour of immigrants?

You have to admire the talent of the man. He has managed to offend Guardian AND Wail readers in one simple statement, that is a feat that should be acknowledged.

[dances with sheeple]

Yes. He hasn't made the link re the effect of lowering HB on ALL rents.

He must be pretty thick for such a "successful" person, and him a maths teacher as well? Or is it all just smoke screen as the banks slowly try to dismantle their portfolio and get it sold off?

[@contradevian]

Except they are not really lowering HB (apart from a benefits cap in London). My area has had small increases.

[dances with sheeple]

Will require genuine regime change, but with a nation of amateur Rachmans what hope have you got?

Last real regime change was over 1000 years ago, and was a foreigner. Don't make me laugh with four/five yearly Labour/Tory musical chairs competition.

Story is very different in Edinburgh, some flats are looking at 60k+ neg equity levels in former booming FTB areas (see Edinburgh Latest thread/R Move) lots of un-let flats, and Landlords VERY keen just to get working people who will pay every month. Someone told me that the landlord said there would be no rent rises for the life of the tenancy, however long that turned out to be.

Edited January 6, 2014 by dances with sheeple

[lastlaugh]

Evicting HB tenants in favour of immigrants?

You have to admire the talent of the man. He has managed to offend Guardian AND Wail readers in one simple statement, that is a feat that should be acknowledged.

Brilliant!

[lastlaugh]

Except they are not really lowering HB (apart from a benefits cap in London). My area has had small increases.

Although the cap is biting hard in London, most areas in the South East have been affected by changes to the LHA rates. I was comparing rates in Brighton recently and I recall a drop of about 15% between the old rates and the new rates. Probably something to do with moving from the 50th to the 30th centile. 15% might not sound a lot, but the 30th centile exerts downward pressure on rents. The 50th centile meant that that the average landlord could put up the average rent at will and the council would have to pay it. (Before someone corrects me, I know the maths isn't strictly correct, but the end result is the same)

The effect in the south is this: unless you are renting to corporate tenants, which is a niche market in its own right, the rent you can expect to receive is dictated by the BRMA. You can fiddle about with unlicenced HMOs and the like, but you won't get much more for the extra risk. We have rent control by the back door. Now, IMHO most BTL business models rely on both rising rents and HPI, to somehow amass enough properties to achieve some mythical escape velocity and retire a millionaire. Without rising rents the model is broken and BTL tycoons will start to get margin calls eg. The Wilsons. In London in the last year I've seen a slow trickle of ex rental properties coming on the market. People are getting out. Not a lot yet, but before nobody sold their BTL.

I hold the belief that BTL and Housing Benefit are all you need to explain our dysfunctional housing market since the millennium. It's our own unique national subprime crisis which has brewed largely unnoticed outside this forum. The Wilsons are a leading indicator and I'm looking forward to the ride in 2014.

[SarahBell]

Except they are not really lowering HB (apart from a benefits cap in London). My area has had small increases.

Not very much change. They don't include 2011 data anymore which is a pity.

Ashford BRMA Weekly LHA rate for January 2012

Shared Accommodation Rate:

£62.50 per week

One Bedroom Rate:

£114.23 per week

Two Bedrooms Rate:

£138.46 per week

Three Bedrooms Rate:

£160.38 per week

Four Bedrooms Rate:

£225.00 per week

Canterbury BRMA

Shared Accommodation Rate:

£71.58 per week

One Bedroom Rate:

£115.38 per week

Two Bedrooms Rate:

£144.23 per week

Three Bedrooms Rate:

£161.54 per week

Four Bedrooms Rate:

£253.85 per week

High Weald BRMA

Shared Accommodation Rate:

£77.50 per week

One Bedroom Rate:

£132.69 per week

Two Bedrooms Rate:

£171.92 per week

Three Bedrooms Rate:

£201.92 per week

Four Bedrooms Rate:

£323.08 per week

Weekly LHA rate for January 2013

Ashford BRMA

Shared Accommodation Rate:

£62.50 per week

One Bedroom Rate:

£114.23 per week

Two Bedrooms Rate:

£138.46 per week

Three Bedrooms Rate:

£161.54 per week

Four Bedrooms Rate:

£219.23 per week

Canterbury BRMA

Shared Accommodation Rate:

£71.58 per week

One Bedroom Rate:

£115.38 per week

Two Bedrooms Rate:

£144.23 per week

Three Bedrooms Rate:

£173.08 per week

Four Bedrooms Rate:

£253.85 per week

High Weald BRMA

Shared Accommodation Rate:

£77.00 per week

One Bedroom Rate:

£130.38 per week

Two Bedrooms Rate:

£171.92 per week

Three Bedrooms Rate:

£201.92 per week

Four Bedrooms Rate:

£323.08 per week

[dances with sheeple]

Although the cap is biting hard in London, most areas in the South East have been affected by changes to the LHA rates. I was comparing rates in Brighton recently and I recall a drop of about 15% between the old rates and the new rates. Probably something to do with moving from the 50th to the 30th centile. 15% might not sound a lot, but the 30th centile exerts downward pressure on rents. The 50th centile meant that that the average landlord could put up the average rent at will and the council would have to pay it. (Before someone corrects me, I know the maths isn't strictly correct, but the end result is the same)

The effect in the south is this: unless you are renting to corporate tenants, which is a niche market in its own right, the rent you can expect to receive is dictated by the BRMA. You can fiddle about with unlicenced HMOs and the like, but you won't get much more for the extra risk. We have rent control by the back door. Now, IMHO most BTL business models rely on both rising rents and HPI, to somehow amass enough properties to achieve some mythical escape velocity and retire a millionaire. Without rising rents the model is broken and BTL tycoons will start to get margin calls eg. The Wilsons. In London in the last year I've seen a slow trickle of ex rental properties coming on the market. People are getting out. Not a lot yet, but before nobody sold their BTL.

I hold the belief that BTL and Housing Benefit are all you need to explain our dysfunctional housing market since the millennium. It's our own unique national subprime crisis which has brewed largely unnoticed outside this forum. The Wilsons are a leading indicator and I'm looking forward to the ride in 2014.

Good news. Great to see the money taps slowly being turned off for BTL.

[slacker]

People are getting out. Not a lot yet, but before nobody sold their BTL.

The Carney/Osborne statements last year are dogwhistles for the smart money to move on as things are changing.

When the guy servicing your boiler is giving investment advice on it ... professional investors are probably shorting it.

[dances with sheeple]

The Carney/Osborne statements last year are dogwhistles for the smart money to move on as things are changing.

When the guy servicing your boiler is giving investment advice on it ... professional investors are probably shorting it.

What were the statements again?

[The Knimbies who say No]

200 evictions in Ashford could get interesting if the tenants decide, en-masse, not to go.

The odious fool has pressed the nuclear button for no apparent reason.

I really hope some of the people in receipt of Fergus's New Year missive tell him to go and do one, via their actions.

#StoptheWilsons.

[@contradevian]

Not very much change. They don't include 2011 data anymore which is a pity.

Ashford BRMA Weekly LHA rate for January 2012

Shared Accommodation Rate:

£62.50 per week

One Bedroom Rate:

£114.23 per week

Two Bedrooms Rate:

£138.46 per week

Three Bedrooms Rate:

£160.38 per week

Four Bedrooms Rate:

£225.00 per week

Some really useful info being captured on that site. Here is the data for Kirklees. 48,305 homes owned outright. Private rented 14.469, Social 27,436

Edited January 6, 2014 by aSecureTenant

[slacker]

What were the statements again?

The theme that at 7% (or 6.5% apparently Carney revised it to on Sunday in the Times) they will start pushing IR up.

Coupled with Carney saying he's not going to let a boom happen (but not actually doing anything physical about it right now).

A professional investor can't look at that headwind and think it's time to double-down on an asset class that is already close to previous peak (a peak that happened in a much more favourable economic climate).

[zugzwang]

200 evictions in Ashford could get interesting if the tenants decide, en-masse, not to go.

The odious fool has pressed the nuclear button for no apparent reason.

I really hope some of the people in receipt of Fergus's New Year missive tell him to go and do one, via their actions.

#StoptheWilsons.

Agreed. They must be bleeding red ink all over. Surely there's an opportunity here for tenants and rival landlords alike to short-squeeze these fumbling ninnies out of the game forever?

[The Knimbies who say No]

Agreed. They must be bleeding red ink all over. Surely there's an opportunity here for tenants and rival landlords alike to short-squeeze these fumbling ninnies out of the game forever?

Every time a politico espouses the prosperous nature of a ZIRP, a picture of these cretins should loom large. Talk about unintended consequences. Ashford could have been freed from the excesses of this pair over five years ago.

koala_bear unearthed some plausible sounding reasons for the Wilsons to be offloading/remortgaging, mostly centred around UKAR winding down the rump of the B&B portfolio.

[Caveat Mortgagor]

I am sure it would be possible for the anarchic members of this board to advocate some form of mischievous 'rent strike' message for the 200 affected tenants.

Using social media, I am sure it wouldnt be hard to get a message to the affected tenants.

Assume he loses 3 months rent on each tenancy before he can evict, and an average of a couple of months voids per property when he has regained possession, then throw in the court costs. I reckon Fat Fergus could have a real headache. Surely something like that would cost him upwards of a million quid. Would that bring him down if he's under pressure from lenders?

Edited January 6, 2014 by Caveat Mortgagor

[19 year mortgage 8itch]

If I was rich I would set up a citizens advice bureau type operation in Ashford specifically to support the Wilsons' tenants and their rights.

[@contradevian]

I am sure it would be possible for the anarchic members of this board to advocate some form of mischievous 'rent strike' message for the 200 affected tenants.

Using social media, I am sure it wouldnt be hard to get a message to the affected tenants.

Assume he loses 3 months rent on each tenancy before he can evict, and an average of a couple of months voids per property when he has regained possession, then throw in the court costs. I reckon Fat Fergus could have a real headache. Surely something like that would cost him upwards of a million quid. Would that bring him down if he's under pressure from lenders?

Even better would be for Mortgage Express etc to pull the plug on the fat pair, and offer to sell to credit worthy and working sitting tenants who want to buy. The benefit to Mortgage Express is that their risk is diversified onto over many borrowers rather than just one.

DWP tenants should be in an ideal world be the responsibility of social housing providers.

There is not one worthwhile social and economic function that the Wilsons perform. Indeed if the market were functioning properly they wouldn't need to exist at all, they are only a financial intermediary that add nothing at all of value. The fact the market has allowed them to splurge on racehorces and terrible clothing, suggests a market that isn't working.

Edited January 6, 2014 by aSecureTenant

[thirdwave]

'Immigrants make better tenants because they work harder', says major landlord

Britain's best-known private landlords are asking tenants on benefit to find other accommodation, preferring immigrant tenants who 'work hard and can pay the rent'

Former maths teachers Judith and Fergus Wilson, who became "buy-to-let celebrities" before the financial crisis by amassing a portfolio of more than 1,000 properties, have written to tenants on benefits asking them to leave.

The pair, whose properties are in and around their home town of Ashford in Kent, have also said they will not accept new tenants receiving benefits. Around 200 of their properties are currently let to tenants receiving benefit.

The story was first reported in Guardian, which quoted Mr Wilson as saying "tenants on benefits are competing with Eastern Europeans who have built up a good enough credit record to rent privately."

But Judith Wilson, who works with her husband and also oversees the farm on which the couple the live, told the Telegraph: "We're seeing employers becoming more open about [preferring] immigrant workers and I think we have to be more realistic about this, and talk about attitude to work. The truth is immigrants don't mind hard work."

Mrs Wilson said rising rents, which have outstripped the amount of housing benefit available in many areas, was another problem. "Say someone on benefits is getting £500 allowance for a property where the rent is £600," she said. "It is wrong to encourage people to live in those circumstances, because it will put them at risk of getting into debt. "As a landlord you are in a very responsible position. It could be the better thing to do for their sake is to ask them to look elsewhere for accommodation."

She said the idea that tenants could turn to payday lenders or other sources of costly credit as a means of meeting rent - as has been reported as a growing trend - was "frightening". She added: "As someone who employs labourers on a farm, I can also say this issue is about work ethic. Immigrants don't mind hard work and they are prepared to do what work is required of them."

The Wilsons became widely-known during the boom years of 2005-2007 as they rapidly grew their buy-to-let empire, once estmiated to be worth as much as £100m. Like other landlords they built up their portfolio by increasing their borrowings as the value of their existing properties grew. It was at one reported they were buying homes at a rate of one per day.

http://www.telegraph.co.uk/finance/personalfinance/houseprices/10553311/Immigrants-make-better-tenants-because-they-work-harder-says-major-landlord.html

Reading Mrs Wilson's comments brought tears to my eyes ..Its nice to finally see the socially responsible side of the Wilsons, who you jealous lot constantly slag off in the most appalling terms. I won`t be surprised if they decide to take their social activisim a step further now by putting the entire portfolio up for sale at a huge discount to first time buyers in order to mitigate the housing shortage in the Ashford area.

Edited January 6, 2014 by thirdwave

[TheCountOfNowhere]

Mrs Wilson said rising rents, which have outstripped the amount of housing benefit available in many areas, was another problem. "Say someone on benefits is getting £500 allowance for a property where the rent is £600," she said. "It is wrong to encourage people to live in those circumstances, because it will put them at risk of getting into debt. "

DROP THE ****ING RENTS.

Edited January 6, 2014 by TheCountOfNowhere