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'fergus Wilson -Selling Semis And Putting Up Rents'-- Merged Threads

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On 03/08/2018 at 21:10, kirstieb said:

I think he loves the publicity, I mean, he's too ugly to get on tv. You can only be that publicly vile if you enjoy it. Kind of like a grosser Katie Hopkins 

True - he's a publicity whore:

From the article:

"The Bank of England revealed at midday it had voted to boost interest rates to their highest level for more than nine years, from 0.5% to 0.75%.

Within an hour - at 12.50pm - Mr Wilson released a statement to media organisations detailing plans for his rent hike."

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On 03/08/2018 at 00:26, Bear Hug said:

I suspect he has "increased" rents in the same way as he has "sold" most if his houses to rich foreign investors over the last few years.  

I suspect he is just looking for some press coverage for the sake of press coverage.  Or thinking he could try to scare Carney into lowering rates to save his tenants. 

I hope he actually tried to increase and all the tenants left but my best guess is that none of this is actually true. 

The trouble with Fergus the fat warthogs reasoning with  increasing rents and putting the blame onto the BOE for forcing him to act this way, and then having all those vermin from property 118 backing him up, the only place I might add that does like or support racist Fergus. He seems to forget that most of his properties, if not all, were purchased just before the financial crisis when the BOE base rate was around 5%, it is now 0.75%.

Had rates not been dramatically dropped back in 2007 his BTL business plan would have folded and he would have been in the gutter. To claim that the BOE have forced his hand is disingenuous beyond belief, yet again tenants(not just Fergus) are being screwed because of poor business plans and not the BOE

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Kent news flash. 

 

Geriatric couple from Kent sadly perished today after their brakes failed to stop the car they were driving. Investigators say most modern cars are setup for 50/50 weight distribution. Including fluids luggage and occupants. Sadly witnesses said the car was leaning violently to the right and looked like it was lob sided.

Accident investigators say the balance of the car was irregular as a whale shaped object was found in the drivers seat with a collapsed seat frame. Air bags where found exploded between folds of cellulite and fat on both occupants. Financial planning books for “dummies” and defaced pictures of Mark Carney was found among the wreckage.

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I remember the wailing last time interest rates properly went up, 2006 ish wasn't it? A business plan dependent on flat or falling interest rates only.

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7 hours ago, inbruges said:

The trouble with Fergus the fat warthogs reasoning with  increasing rents and putting the blame onto the BOE for forcing him to act this way, and then having all those vermin from property 118 backing him up, the only place I might add that does like or support racist Fergus. He seems to forget that most of his properties, if not all, were purchased just before the financial crisis when the BOE base rate was around 5%, it is now 0.75%.

Had rates not been dramatically dropped back in 2007 his BTL business plan would have folded and he would have been in the gutter. To claim that the BOE have forced his hand is disingenuous beyond belief, yet again tenants(not just Fergus) are being screwed because of poor business plans and not the BOE

I seem to recall Fatberg himself saying that they'd have been bankrupt if it weren't for the historically low interest rates.

Edited by oatbake

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2 hours ago, oatbake said:

I seem to recall Fatberg himself saying that they'd have been bankrupt if it weren't for the historically low interest rates.

Just been tinkering with a model of his portfolio. The inputs are of course pretty iffy; he's hardly a reliable source on how big it is, what the LTV was in 2008, how much he's sold off and when, or indeed if, he's made any sales. That said there are some things that look pretty solid, e.g. effectively all of it is in Kent and it's focused in semi-detached houses.

What surprised me (but shouldn't have really) is the extent to which his financial position has recovered since house prices in the South East went ballistic after 2013. Because of that he's is, in a sense, always 'better off' as a consequence of not having sold up on the many occasions when he said he had.

For example, if we begin with the assumption in August 2008 he had 700 properties and a portfolio LTV of 70% (and consequently £44m of equity) then if he sold 20 properties a year and all proceeds were used to pay down debt then by July 2017, given the way house prices in Kent have shot up since 2012, he could easily have a portfolio LTV of about 45% and about £95m of equity.

I decided to assume that he would have to use all proceeds to pay down equity because of 'right to consolidate clause'/'all monies charge'. Quoting from a UKAR letter to the Treasury Select Committee last year, (link)

Quote

We have a total of 23,686 customers who currently own more than one buy-to-let property mortgaged to UKAR companies. Of these, the average number of properties mortgaged to portfolio landlords is currently 7.5.


With regards the criteria used to invoke the 'right to consolidate' clause, I would firstly like to clarify that consolidation rights only apply in respect of buy-to-let properties mortgaged to Bradford & Bingley or Mortgage Express. They do not apply to customers of NRAM. Most NRAM buy-to-let mortgages are subject to an 'all monies charge', which means that each property stands as security for all debts owed to NRAM. This wide form of security is extremely common in the commercial banking sector and we understand that many lenders' buy-to-let mortgage conditions include an 'all monies charge'.

The 'right to consolidate' forms part of the mortgage conditions to which customers agreed when taking the original loan (usually with the benefit of legal advice) and we have subsequently reminded portfolio landlords of this right As you note there are two scenarios where consolidation rights are relevant.

...

As you have identified, the second scenario arises where a customer seeks the redemption of one mortgage within their Bradford & Bingley or Mortgage Express portfolio. In this situation we do have the right to require redemption of the entire portfolio. However, in practice our approach is to require that some or all of any surplus is used to pay down other mortgages with the same lender where the customer has other mortgage debts which are overdue or mortgages where the security cover is below current market parameters for standard buy-to-let properties. We would request payment only of such portion of the surplus required to address the overdue debt or the equity risk. The use of consolidation thus reduces the risk that the customer will, in future, suffer a shortfall for which they would remain liable and subject to other debt recovery processes. We do recognise that landlords should be able to manage their portfolios as they see fit and our approach seeks to minimise the level of interference. If a customer asks us to consider derogating from our standard approach in line with our Treating Customers Fairly principles we will always consider the individual circumstances and we frequently agree to enter into alternative arrangements which better suit a particular customer's circumstances.

One consequence of the right-to-consolidate clause/all monies charge is, if I understand matter correctly, that selling the property doesn't release any cash to pay the Capital Gains Tax that falls due when you sell-up, hence Fergus would need to be generating sufficient after tax profits from the rent/mortgage interest & other expenses side of the portfolio before he could sell-up bit by bit.

Of course if he was selling up bit-by-bit then that would mean that the LTV was dropping and his after tax profits were generating more cash to pay CGT bills.

Weirdly, in term of LTV, he's best off if he never sold anything post 2008, because of the HPI :rolleyes:  [Edit: Soz, error in the spreadsheet; selling down and using all the money to pay off mortgage is obviously much better for LTV]

Another weird thing is the lenders' incentives. If their incentive is to get him to wind up all his mortgages then they could potentially keep applying right-to-consolidate clause/all monies charge until whatever remains of that lender's share of his portfolio is free and clear - i.e. on a lender by lender basis he may not be able to get hold of any of his equity until the LTV with that lender is zero!

The situation is even more perverse because section 24 and PRA SS13/16 are going drive down the after tax profits from the rent/mortgage interest & other expenses side of the portfolio and thus slow down how quickly he can continue selling down.

No wonder he's always fantasising about Arab/Chinese/Russian buyers riding to his rescue like someone from his line of dodgy ghost-written books about Nazis/horses.

Edited by Bland Unsight

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Having cranked a pretty rough and ready model of his P&L I think he might be OK, provided there's no drop in house prices and rents keep tracking up.

Once house prices rise and his portfolio can generate enough profit for him to pay the CGT he needs to sell-down and reduce his gearing he gets into a virtuous circle where the portfolio becomes more profitable enabling him to cover the CGT more easily and sell-down even further, reducing his gearing and improving the profits and so on...

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17 minutes ago, Bland Unsight said:

Having cranked a pretty rough and ready model of his P&L I think he might be OK, provided there's no drop in house prices and rents keep tracking up.

Once house prices rise and his portfolio can generate enough profit for him to pay the CGT he needs to sell-down and reduce his gearing he gets into a virtuous circle where the portfolio becomes more profitable enabling him to cover the CGT more easily and sell-down even further, reducing his gearing and improving the profits and so on...

Therein lies the issue for the leveraged debt junkie. 

Every house earns £600 pcm and costs £350 pcm and therefore a sale ‘costs’ £250 pcm in ‘lost profit’. With rates at these daft levels the motivation to sell is nil.....and when rates change it’s too late. 

I went through this ‘awaking’ 15 years ago and although I had been renovating and selling....I was acquiring faster than I was selling. That came to an abrupt end once I saw my leveraging was no longer a 6 monthly term but a feature of my plan. 

The entitlement of a 118’er and fat fergie will be their joyous undoing. 

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1 hour ago, Pop321 said:

Therein lies the issue for the leveraged debt junkie. 

Every house earns £600 pcm and costs £350 pcm and therefore a sale ‘costs’ £250 pcm in ‘lost profit’. With rates at these daft levels the motivation to sell is nil.....and when rates change it’s too late.

You could make more doing a minimum wage job and without the risk of being on the hook for a few £100k. I think £250 a month of someone else's wages while not having to work yourself makes them gloss over that though.

They are definitely the pawns on the opposition's side of the chess board.

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You may recall the wealth of supportive comments in the Property118 article about the fat mans latest addventire. Well it turns out they’re all unsurprisingly good bedfellows and he’s taken to writing some (fairly incoherent) ‘articles’ over there now...

https://www.property118.com/three-generation-households-fergus-wilson/

https://www.property118.com/government-lemming-instinct/

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3 hours ago, Lavalas said:

You may recall the wealth of supportive comments in the Property118 article about the fat mans latest addventire. Well it turns out they’re all unsurprisingly good bedfellows and he’s taken to writing some (fairly incoherent) ‘articles’ over there now...

https://www.property118.com/three-generation-households-fergus-wilson/

https://www.property118.com/government-lemming-instinct/

Just when I was starting to think that the comedy over on parasite118 had fizzled out.

Having Fatberg as am ambassador is definitely going to improve the public's perception of landlords.

Thanks 🙂

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