Mr Wilson 5 Live Now

[fluffy666]

"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."

Not bad for a maths teacher.

I've been doing some wilsons maths homework*.. did you know..

- By 2020, average house prices will be £800k and earnings £33.2k for a multiple of 24

- By 2046 the average house will be over £10 million pounds - 146 times earnings.

- By 2050 the average FTB will need an entire year's pre-tax income for a single month's mortgage interest payment.

- In 2074, houses will cost 1000 times earnings - a snip at £168 million.

- Further on, in the year 2200 there will be 7 housing transactions, forming 90% of GDP for the year.

- However, there may be problems circa 2230, even with such a sure fire one way bet. Houses will be a pricey 52 million times average earnings, and the price of the average house will be greater than the GDP of the country at 860 trillion pounds. Prices may have areached a permanantly high plateau.

* HPI = 10.4% forever, Earnings growth 3% forever, GDP growth 3% forever.. It's WilsonMath

[mrcutegurlzz]

I've been doing some wilsons maths homework*.. did you know..

- By 2020, average house prices will be £800k and earnings £33.2k for a multiple of 24

- By 2046 the average house will be over £10 million pounds - 146 times earnings.

- By 2050 the average FTB will need an entire year's pre-tax income for a single month's mortgage interest payment.

- In 2074, houses will cost 1000 times earnings - a snip at £168 million.

- Further on, in the year 2200 there will be 7 housing transactions, forming 90% of GDP for the year.

- However, there may be problems circa 2230, even with such a sure fire one way bet. Houses will be a pricey 52 million times average earnings, and the price of the average house will be greater than the GDP of the country at 860 trillion pounds. Prices may have areached a permanantly high plateau.

* HPI = 10.4% forever, Earnings growth 3% forever, GDP growth 3% forever.. It's WilsonMath

lol

is there going to be a garden party in the Wilsons area when they go bust?

[Guest tbatst2000]

I wonder how switched on they are (switched on enough to hedge away the interest rate risk I wonder?) and whether there are personal guarantees (if not and they have any sense at all they have stashed away a few million). I wouldn't be surprised if they are completely on the hook though. If they are then he could well be sleeping in the park again

Well, at least one of the them was a maths teacher IIRC, so you'd hope they'd understand what an interest rate swap was all about but somehow I doubt it. As far as I can tell, they own the houses in their own names (I looked up one of their places on the LR - I posted details but the thread got pulled) so, when the sh1t hits the fan, it's going to stick.

[Shoeshine Boy]

"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."

Not bad for a maths teacher.

The idiots have not stripped inflation out of their calculation, otherwise they would have got 13.3% growth over 7 years.

Thats 1.018^7.

[right_freds_dead]

"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."

Not bad for a maths teacher.

i take back earlier comments that he must be no mug. if this man thinks that house prices will perform as they have done (massive boom)

every 7 years, without fail or downturn. and its normal and just repeats at that pace all the time....

then, i feel the man is as thick as shit.

this guy is on a losing streak.!!!

[THE BALD MAN]

"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."

Not bad for a maths teacher.

i take back earlier comments that he must be no mug. if this man thinks that house prices will perform as they have done (massive boom)

every 7 years, without fail or downturn. and its normal and just repeats at that pace all the time....

then, i feel the man is as thick as shit.

this guy is on a losing streak.!!!

I have heard a betting system where you double up perhaps that was what he was thinking of. Also he has not heard about diversification and has bought in Ashford. Now the Eurostar is gradually winding down operations there not much to recomend living there! Should have bundled up the portfolio and sold to some mug punters last year.

[right_freds_dead]

I have heard a betting system where you double up perhaps that was what he was thinking of. Also he has not heard about diversification and has bought in Ashford. Now the Eurostar is gradually winding down operations there not much to recomend living there! Should have bundled up the portfolio and sold to some mug punters last year.

yeah. if you bet on the favourite horse.

it loses

you double your bet on the next favourite

it loses

you double up (x4) on the next favourite

it loses

you double up on the next favourite

-at some point the favourite will win.

trouble is with the theory by the time you get a few losses, you end up betting £16 million to recover a £1000 original bet.

got to ask 'are B&Bs pockets that deep ?'

answer this week is NO.

[A Fool & His Borrowed Money]

Anyone notice this little snippet below?:

Judith Wilson’s simple guide to property investment

The Golden Rule The number one rule is:

Never use your own money.

Judith pays careful attention to the financial pages, so she can anticipate movements in the interest rate. All her mortgages are fixed rate interest-only.

http://www.jwipb.co.uk/how.asp

FIXED RATE Interest- Only?

2004 onwards majority purchases?

Those rate resets are going to Knock-Out the Pyramid.

[Telometer]

You don't know how long the life of the fixed-rate element of the mortgages is. 10-12 years quite possible.

[Philgo]

I wonder if his own houses are mortgaged.........

Edited June 3, 2008 by Philgo

[Son of Taeper]

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.

Good post.

I would sell the unlet stuff off at a loss if required but greed can twist the mind so maybe I wouldn't

[Thread Killer]

If the local market has been distorted by the Wilson's buying 875 properties, prices will have been distorted upwards. In effect, they will have overpaid on their later properties to stop others from buying, the upside being overpayment 'proved' capital gain and positive equity for their earlier purchases. A sort of one-man ponzi/ pyramid scheme.

If that is what has happened, the price crash will be worse in their area compared to elsewhere - they will deserve this as it was their overpaying that drove prices beyond the reach of others in the first place.

Exactly. Which is why I am looking to Ashford as a likely location on spending my STR fund on buying some houses. I'll be a much better landlord than the Wilsons, and longer-lasting too...

[rogerthelodger]

Just finished

60 - 65% gearing

Houses better than flats.

He's OK

looks like these simpletons have basically built up a council estate ! i mean if they never sell and are happy to make £5 more in rent per month than it costs for the mortgage no wonder they can't afford to fix boilers and allegedly withhold deposits.

councils are off loading housing stock like there is no tomorrow,and they are subsidised by the government! Glasgow council had a £2 Billion debt written off because tenants agreed to a housing stock transfer to GHA

the wilsons don't have the advantage of a government bail out.

[Kurt Barlow]

looks like these simpletons have basically built up a council estate ! i mean if they never sell and are happy to make £5 more in rent per month than it costs for the mortgage no wonder they can't afford to fix boilers and allegedly withhold deposits.

councils are off loading housing stock like there is no tomorrow,and they are subsidised by the government! Glasgow council had a £2 Billion debt written off because tenants agreed to a housing stock transfer to GHA

the wilsons don't have the advantage of a government bail out.

I wonder

Guys like him will be salting away loads of cash to somewhere like the Cayman islands. When it all goes pop he will disappear and spend the rest of life on a lilo with a cocktail in the Carribean :angry:

The banks / insurers will take the hit

[bobthe~]

You don't know how long the life of the fixed-rate element of the mortgages is. 10-12 years quite possible.

I don't think so.

Their plan was based on MEW to buy. It is unlikely they fix for more than 2 years, because they would expect to draw out some equity in order to buy their next property.

And it is unlikely they predicted the sharp jump in IRs and the credit crunch.

And more likely they take their property advice from Stuart Law.

[game over]

Burn!

[_w_]

Those rate resets are going to Knock-Out the Pyramid.

Somehow I don't think those geniuses went for more than 2 years fixed since those were the cheapest deals...

Is that toasts I smell at the Wilsons'? Is it morning already?

Edited June 4, 2008 by williamdb

[Rick62]

All the BTL fixed mortgages were either 2, 3 or 5 years. Chances are they went for a mix so their 2 and 3 year deals will be resetting, going from typically 5.5% (or less, some were below 5%) to now typical best rates are 7%. Thats an increase of 30% to 40% in payments.

Do they have that margin between their rental income and interest costs? If not they'll be facing serious cash flow problems.

[Philgo]

They are also hated in the village that they live. They have evicted the local scouts from their hut so they can use the land to build a pet cemetery. Think planning permission was refused though as it was next to a school, something they never considered.