Mr Wilson 5 Live Now

[PunK BeaR]

If all the properties are on I/O mortgages like they say then increases in their mortgage rate could leave them short from rental income. They cant sell cos noone is buying and because they could start a localised downward price spiral by selling en-masse as the houses are all in the same area. Looks like they're trapped and IMHO it looks like they're f&*^ed.

[redgenieuk]

He can't afford £175.00 to fix my boiler, so he must be strapped.

Get it done.

Bill him.

[chichi]

The EA who bought his house for 59k two years ago must have mewed else he'd be able to afford it.

*rolls eyes*

[Starcrossed]

(first post by the way; I hope you like it.

I have been a lurker here for over 2 years but not posted - I have got my posting kicks from being a regular poster on MSE. But I have just been banned for............. well I don't really know. Being too honest I guess and not giving enough "hugs")

Welcome dolce vita! {hug}

[Converted Lurker]

Sadly, he'll probably be OK as long as the rents keep coming in. If there is a big downturn there will be a lot of people going bust before him.

I reckon there's a common misconception here regarding their liquidity/solvency; they kept buying up until 2007, their most acquisitive years were from 2004 onwards. I'd suggest very few of these newer units 'wash their faces' and they continued to re-gear in order to buy right up 'till last year. They insist they have 50% equity, nonsense, it's more like 35% and a 25% correction messes them up. Their big threat is negative cash flow, as a business they hold very little cash. They should have whittled down their empire to zero debt from 2006 onwards. If that whittled down their empire from 750 to 75 then that would have been the wisest route. They have continually bragged that the only deposits they ever put down were on their first four properties, that should tell you all you need to know re. their finances and their motivation. I'd suggest half their empire has little or no equity in it, but as they continued the buy thier equitable value has been a negative and corrosive contagion...

Edited June 2, 2008 by Converted Lurker

[Converted Lurker]

That's what gets these types all the time - greed and stupidity.

And at the end of the day, it doesn't matter whether you own 10 houses or 1000 - if you're too highly geared you're f*cked

(first post by the way; I hope you like it.

I have been a lurker here for over 2 years but not posted - I have got my posting kicks from being a regular poster on MSE. But I have just been banned for............. well I don't really know. Being too honest I guess and not giving enough "hugs")

We don't send out much fukcin Karma on here either, although that's probably evaporating on the expats forum as we speak...welcome

[Converted Lurker]

I am sure you are right.

Combine that with a naive and misplaced conviction that house prices 'double every seven years' and you have a recipe for total disaster. I neither like nor dislike them, but you can be absolutely sure that imminent bankruptcy hovers over this delusional couple.

Gettin there! Red Baron and Star crossed back on the same thread. How's things guys, you don't pass by this way often

[Paddles]

I reckon there's a common misconception here regarding their liquidity/solvency; they kept buying up until 2007, their most acquisitive years were from 2004 onwards. I'd suggest very few of these newer units 'wash their faces' and they continued to re-gear in order to buy right up 'till last year. They insist they have 50% equity, nonsense, it's more like 35% and a 25% correction messes them up. Their big threat is negative cash flow, as a business they hold very little cash. They should have whittled down their empire to zero debt from 2006 onwards. If that whittled down their empire from 750 to 75 then that would have been the wisest route. They have continually bragged that the only deposits they ever put down were on their first four properties, that should tell you all you need to know re. their finances and their motivation. I'd suggest half their empire has little or no equity in it, but as they continued the buy thier equitable value has been a negative and corrosive contagion...

Exactly. They aren't cash-rich. They could have cut back 18 months ago. Hell, if they'd have sold last summer they'd probably still be ok, but just like the gambling addict on a winning streak they couldn't walk away from the table.

As Verbal Kent said "And poof. Just like that, he's gone."

[newaccount99]

Trouble with the Wilsons is that they are not always 100% upfront with the truth and are full of bluster.

There's a lot of ego behind their motivations and not all of it is based on sound business sense. For quite some time they have set themselves a goal of "1000 properties" and the title "BTL Billionaires"...I think those goals will be the ruination of them.

On that radio link Fergus said he had 875 properties, that's around £200M exposure and I'd guesstimate that in reality (brushing off the bluster) he's leveraged at around 80% possibly more. That'll give them around £40M equity and they are losing around £3M per month in capital depreciation.

They have turned Ashford into a monopoly......that fact might just save them as they have almost enough control of the town's assets to effectively price fix the rental market. The jury's out whether they will survive the downturn or be completely ruined in spectacular fashion.....My monies on them being bankrupt by end of 2009.

[piece of paper]

But Fergus Wilson predicts that prices will double every seven years and says the typical property he owns - a £200,000 two- to three-bed starter home - will cost £400,000 by 2013, £800,000 by 2020 and £1.6m by 2027.

He may be right but it won't affect him if all of his have been repossessed!

p-o-p

[yellerkat]

For quite some time they have set themselves a goal of "1000 properties" and the title "BTL Billionaires"

It's the Thousand House Reich mindset that will doom them in their lonely bunker under the Weald.

[miko]

Just finished

60 - 65% gearing

Houses better than flats.

He's OK

I know a few people who have gone totally bust in the buy to let business and what i saw in them and in other people in money trouble is a thing i have termed ( lying to yourself) all of them when i spoke to them addmitted that when things had got tought they had worried non stop about their situation and yes they had tried to make themselves feel better by imbelishing their realaty with lying to themselves about their financial state . I bet Mr willson is doing just that.I bet his gearing is more than 60-65%.

Edited June 2, 2008 by miko

[Starcrossed]

Gettin there! Red Baron and Star crossed back on the same thread. How's things guys, you don't pass by this way often

Hey, CL. I'm here most days, just don't show my face. Content to watch the financial carnage in quiet smug mode.

Good to see Red Baron, another real veteran!

[Kurt Barlow]

If all the properties are on I/O mortgages like they say then increases in their mortgage rate could leave them short from rental income. They cant sell cos noone is buying and because they could start a localised downward price spiral by selling en-masse as the houses are all in the same area. Looks like they're trapped and IMHO it looks like they're f&*^ed.

Risky

Better off contacting the council and getting their housing standards team to give him some agro (thats if they still have such a service )

Heres a link!

http://www.ashford.gov.uk/community_and_li...ted_sector.aspx

Edited June 2, 2008 by Kurt Barlow

[newaccount99]

It's the Thousand House Reich mindset that will doom them in their lonely bunker under the Weald.

Very good yellerKat, very good!

[Philgo]

AHA - A POTENTIAL VENUE FOR HPC PARTY NIGHT!!!

We could even invite Beefheart - and put aside a room for him and his friends

Don't worry Philgo we will have a whip round to pay off your deposit - you got fook all chance of getting it back from the Wilsons anyway. I can see it now boiler damaged - theres your deposit gone.

Thanks for the offer Kurt, the deposit was £875.00 how much you going to donate

[Red Baron]

Hey, CL. I'm here most days, just don't show my face. Content to watch the financial carnage in quiet smug mode.

Good to see Red Baron, another real veteran!

Hi, I don't often post here although I visit every day because the News Blog is good.

I reckon things are going pretty much to plan with the crash although much later than I thought. Just means the crash will be even bigger than I originally thought!

[ralphmalph]

First post so be gentle.

I was listening to this on the radio and thought Bxxxsxxt.

So I thought that I would do a little research. On rightmove the prices for the kind of properties they buy, new build 2/3 bed tearraced seem to be around 200K to 250K, so say average 235K. This should be around the price they paid for these properties during the boom years. Then I checked the rents for this type of property and rightmove says 725 to 795 GBP per month depeding on 2 or three beds.

So 235K @ 65% gearing = 152,750 Mortgage.

Rent is say 775 GBP per month = 9300 GBP per annum

Now to calculate the interest rate that he needs on a 152,750 IO mortgage on this rental income.

9,300 / 152,750 = .06088 so if the wilson have these type of properties on a 6.1% mortgage rate the rents will cover the mortgages, but will not cover voids, maintenance, 10 racehorses.

So to me the key to the survival of this btl empire is have they got their mortgages fixed for life at a rate of 6.0% or less. If the answer is yes they may tough it out. But if they were remortaging like crazy to buy more properties with the equity and were chosing 2 year fixes then when these run out in todays market they would be bankrupt within three months.

152,750 * 7.5% (new BTL rate) = 11,456.25 per annum 954 GBP per month with 775 rent = 179 GBP per property per month shortfall x 875 props = 157,226 per month shortfall 1,886,718 per year. This is almost certainly unrealistic because they did not buy all of there property over the past 18 months, but they remortgaged a lot so halve this figures and that may be a truer reflection but that is still a 900K loss is a year.

The other thing that they could have done is to save mortgaging, because of the size of their portfolio and the millions involved is to have gone for a commercial lending agreement. Upside fixed interest rate across all properties with a drwandown facility, downside they would not have got as good an interest rate as doing deals with a mortgage lender and the commerical boys wouldbe much quicker to close because they would takeover the portfolio and run it themselves for a period of time until the market picked up then take there profits.

So there are a few variables but I think tonight as Mr Wilson sits down he knows what "Squeeky Bum Time" means.

[Kurt Barlow]

Thanks for the offer Kurt, the deposit was £875.00 how much you going to donate

I would put £15 -£20 in the kitty - worth it just to think of those smug gits having to shell outfor the repairs.

Seriously if your boiler is faulty speak to Ashford Councils Environmental Health / Housing Standards officers (if there are any left) I suspect they are well acquainted with the Wilsons.

[Philgo]

I would put £15 -£20 in the kitty - worth it just to think of those smug gits having to shell outfor the repairs.

Seriously if your boiler is faulty speak to Ashford Councils Environmental Health / Housing Standards officers (if there are any left) I suspect they are well acquainted with the Wilsons.

I've had the enviromental health officer around, he is writing to the Wilsons.

I'm very tempted to post the letters I've received from my penpal Fergus they are pretty funny, it's obvious that he wasn't an English teacher.

Edited June 2, 2008 by Philgo

[piece of paper]

I've had the enviromental health officer around, he is writing to the Wilsons.

I'm very tempted to post the letters I've received from my penpal Fergus they are pretty funny, it's obvious that he wasn't an English teacher.

Have a word with Mervyn King. He's got some letter writing ahead of him and might welcome the practice.

p-o-p

[mikeymadman]

I'm very tempted to post the letters I've received from my penpal Fergus they are pretty funny, it's obvious that he wasn't an English teacher.

Go on!

Not now obviously though, wait until you move out!

[Mikhail Liebenstein]

The thing that will get them is if there really are margin call to BTLers. At this point there will be no bottom and the crash will be reinforcing.

The other factor is their concentration in one area. This must have inflated prices on the way up, so perhaps some of the perceived current gains aren't real, as things start to drop the froth is wiped away and the actual level is exposed to be much lower.

Only when the tide goes out do you see whose been swimming naked.

Edited June 3, 2008 by mikelivingstone

[PropertyGuru]

it's pretty common knowledge to those of us 'in the game' that the Wilsons could have stashed away a few mill in the good times, and didn't, despite advice. Their lifestyle has been predicated on the difference between rents and mortgage payments, plus a little 'capital extraction' for those essentials, like the occasional racehorse.

What he was REALLY saying on the radio was 'I cant conceive of any situation where prices could fall more than 35%, so that's what I'll pretend I have in equity, both to make myself feel better, and to make sure none of my banks start thinking about 'reducing their exposure' to me".

Seeing as EVERYTHING has been funded by mewing since property 4, his 'equity' is fictional, and the Wilson bust will be one of the most spectacular and enjoyable we will see, this crash round. Don't expect it before 2010 tho. They have a LOT of momentum.

[Its time to buy]

What about this Ashford Eurostar station that will boost houseprices? Olympics? Spring bounce... er... painting the front doors ?

Edited June 3, 2008 by notanewmember