Property tycoon Fergus Wilson is to sell all of his huge property portfolio – potentially calling time on the market
Despite spiralling rents, it appears he is even more attracted by capital gains.
He and his wife Judith own some 1,000 two- and three-bedroom properties around Ashford, Maidstone and Folkestone in Kent. At one stage, the couple were said to be buying a property a day.
The move to cash in is likely to be interpreted as Britain’s ‘king of buy-to-let’ deciding that the top of both the sales and lettings markets has now been reached.
Wilson said: “We are selling up the whole lot. The market has recovered and passed the 2007 level.
“Who to? An intermediary is handling it. Is it China money, Indian money, Saudi money? We will see. I am sure there will be much interest. It has been going on for just over three months and another three to run. I would like it to end up in English hands but it is a case of who will pay top dollar.”
The effects on the local sales and lettings markets, where many hundreds of tenant households could shortly be forced to seek new rental accommodation and many properties put up for sale, is likely to be both disruptive and considerable.
Yesterday, on Rightmove, there were just 146 rental properties listed in Ashford, and 446 properties for sale.
While Wilson may be selling at least some properties to other buy-to-let investors with tenants in situ, it is not clear what his sales strategy is – whether this will go piecemeal or largely as a whole portfolio.
He said yesterday: “I will be broken hearted to say goodbye to my property portfolio but I cannot take it with me. It has been a lot of fun over the years.”
The Wilsons are among the UK’s biggest buy-to-let investors, named in 2009 as the 34th richest couple in Britain – and the most controversial. However, it has never been clear what their debt levels were.
In January, it was revealed that Wilson had been evicting all his tenants on housing benefits, preferring migrants from eastern Europe instead.
Appearing on the Panorama programme about homelessness on June 23, he said: “We are running a business, not a charity.”
It has now emerged that Wilson evicted two tenants on the same day of that Panorama programme in order to put the houses on the market.
Wilson does not appear to be selling up because of low rental income.
In a statement, he said that homes he was letting at £750 in March 2013 are now commanding £1.050 a month – a 40% increase.
He made it clear that he believes that now is the time to get out of the lettings market in Ashford and cash in. His statement did not initially make it clear whether he would be selling up the couple’s many other properties across Kent, although it did refer to a sale of the complete portfolio – which he has now confirmed.
The original statement particularly referred to prices in Ashford – both sales and rentals – being driven by people moving out of London, turning it into a satellite dormitory for London city workers.
He said Londoners are selling their modest two-bed homes in the capital for over £1m and living off the proceeds after buying a £200,000 house in Ashford.
Wilson says he has no doubt that the homes he sells will go to people from London who are cash-rich.
He said he hopes to have sold his entire portfolio within the next few months, acknowledging that “this will cause immense problems for Ashford, with his present tenants needing to be rehoused”.
It will not be the first time that Wilson has tried to sell his portfolio.
In late 2008, he and his wife announced that they would be selling up, for a rumoured £180m. However, the property market crash meant there were few buyers, and prices had fallen by some 20%.
Fast forward six years, and today Ashford’s property market has been transformed by the international passenger station and the new Javelin train service to London – a commute of just 35 minutes.
John Woodhall, regional managing director for Your Move in Kent, said of Wilson’s decision to sell up: “Whether this will have an impact on the lettings market is difficult to gauge, but the market usually finds its own levels and where there is demand there are usually investors ready to quickly step in to take advantage of this.
“If the properties are marketed within months of each other it could actually lead to over-saturation and therefore lower selling prices, which would be of added appeal to landlords but also to tenants who might see this as a great opportunity to buy.”
According to local independent agent Gould Harrison, typical homes owned by the Wilsons have gone up from £150,000 in 2009 to around £185,000 now.
Wilson, who appeared ailing on the Panorama programme, said he would help the Government out on housing policy once he has disposed of his property empire.
He said this would only be “if they pay me enough money – I am not doing it for free. There is no magic wand to create overnight the number of houses required to overcome the housing crisis.”
Comments (7)
Some were placed into receivership – I know – I sold them!
I approached Fergus both in 2009 and 2010 with an innvovative Rent To Own scheme which would have moved his oversized portfolio into the hands of private homeowners and tenant buyers.
This would have prevented or mitigated the inevitable challenges he is facing today.
I believe that this is actually a response to pressure (and informal threats of what is going to happen to his entire portfolio when they are taken into receivership) from Mortgage Express (now UKAR) in the background rather than any clever planning.
Most of the overvalued (They drove the values up according to earlier reports) newbuild stock they acquired no money down and leveraged to 87.5% Loan To Value, will release very little equity after selling costs and leave no other incentive or reason to sell at this time.
Public domain information shows us that the Wilsons were teachers with minimal financial resources when they started buying newbuild stock directly from developers, no money down. using MX.
Hence 87.5% LTV on an inflated predicted valuation at a time when valuers were "generous".
This was the inside track model done on a large scale.
It then tells us that they narrowly avoided receivership just a few years ago by negotiating with MX who wanted to avoid a mass sell off at a low point in the market.
If we use refer to hometrack, calnea and rightmove plus, we can see that there has not been substantial enough rises to create any substantial equity in the portfolio.
This is clearly an exit now called for by his lender who have waited for the market to be right for the sales to enable them to minimise their losses, which otherwise would have been substantial.
They bought no money down newbuild at £200k for stock which is now worth £185k at best and which has a mortgage of £175k and will attract selling costs of at least £3k.
http://www.rightmove.co.uk/property-for-sale/property-46993814.html?premiumA=true
"They have single-handedly pushed up prices in the new developments, buying them off-plan and renting the lot out"
http://www.theguardian.com/…/dec/16/business.houseprices
In Summary, they have no equity and they are being forced to sell or be taken into receivership by their primary lender.
They are gutted but putting on a brave face and hoping to keep the properties that were mortgaged with BM, TMB and other lenders.
Of course if this sell off fails and MX/UKAR decide to pull out and sell their mortgaged properties as fire sales then sadly they will lose everything that they have worked for.
I do not believe that there is anything wrong with Buy To Let and funding quality housing for those not yet able to afford it.
What is a problem is when landlords are over leveraged, relying on a rising market and when they have all of their eggs in one basket with a very small number of lenders.
Phil Martin
Isn't this a case of being too smart and too reliant on a mathematical model that was great until 2008? The Wilsons were maths teachers and were smart enough to work out a population fuelled, trend line pattern of compound growth. I did some work for the Halifax which involved repossessing a similar pyramid portfolio back in 1992-3, that showed me how brilliant but fragile such schemes are and how reliant the scheme is on very robust portfolio management.
The very size of this portfolio means it can't be considered a straw that overwhelms the camel but I suspect this could prove to be the case that brings the lunacy of AVM and remote, un-verified lending into sharp focus. If that happens and LTV requirements are retrospectively tightened by as little as 5% it could very well be that it won't just be the Wilsons scratching about for a few million pounds equity to bring the portfolio within limits.
Capping LTV to 75% would help here. Taking money out of a property above this level, to fund more purchases, makes them very vulnerable to a significant market correction, as happened in 2008.
Having 25% equity effectively recession-proofs them and also limits the size of the portfolio itself, due to 25% deposits being required. 85% LTV is fine in a normal or rising market, but no contingency when things go wrong, as they did.
Phil, You are 100% correct.
“I would like it to end up in English hands but it is a case of who will pay top dollar.”
Why is he not selling it for top sterling? hahaha 🙂
Trust me, from personal experience, no-one involved in the Ashford sales or lettings market will be sad to see Fergus Wilson leave, particularly young mums with babies and boilers that do not work over Christmas periods!