Wilsons Selling Up. The Lot. All 700 Houses.

fc123

This article from yesterdays Mail on Sunday had a few facts anf figures in it.

The reviews in MoS are often talking up something to get some interest, so, this Wilsons article is quite flattering to them and appears factual, but I am guessing the journo just typed up what he was told without being able to check facts as such.
Obviously, if there were buyers queueing up, the article wouldn't have been needed.

The article online is half the info of the one in the paper so, I will have to type out ;-( but here is one quote.

Fergus says his properties are worth £180million and that once he has paid off his mortgages he and his wife will be left with a retirement pot of £120million.

This is different figures to actual article yesterday.

Article states; Monthly mortgage bill is 80k. Fergus admits that had rates gone up it would have blown their cunning business plan and they pay a lot less than a few years back.

The rents bring in 600k per month

They have 14 staff mostly responsible for maintenance.

They have borrowing of 45 million and estimate to clear in hand 100 million after any taxes.

They say they are selling now as the CGT changed (in their favour)
and they want to retire.


And I love the 'Quick, quick don't miss out ' feel to the article as Fergus states '' we have several Russian buyers who are front runners, but how serious they are, we don't know..there's also a Bulgarian, a Saudi, one from China, one from Japan and one from India. We are just sitting back and waiting to see what comes forward''.

He then adds that if these millionaire investor buyers from afar don't buy, they will carve up the portfolio into bitesize chunks of 10....'''so the tenants can remain'' .????
What were the foreign investors going to do with them? Live in them themselves?

Anyway, you'll have to take my word for it or check out a neighbours recycling box as the online article didn't even have the same title.
''An Empire For Sale''.....bit TICheek.

PasturesNew

£600k/month is £7.2million a year.

£180 million noose means a 'fantastic' 4% yield, but that's gross. There are the 14 staff to pay for, the materials on the repairs, the voids ...

fc123

I posted the wrong link...article I was reading was Sunday Times doh..

so here is the proper article interesting The Mail got slightly different sums.
And an extra quote especially for DS...it made me cringe a bit too.;)

In the meantime, £100m or no £100m, they are struggling to contemplate life without their empire. “We have very much enjoyed what we’ve been doing,” Fergus says. “It’s been a labour of love. It’s like having a child that’s grown up. I shall miss it terribly.”

Zandoni

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article6819301.ece

Here's another article, different figures again.

Why do these papers just print what they are told.

From The Sunday Times

September 13, 2009


For someone who could soon have more than £100m sloshing around in his bank account, Fergus Wilson appears to have remarkably little interest in his money. “We are always getting letters to invest in this, that or the other, like buying a private jet,” says Fergus, 61. “But what do I want a private jet for? I never go anywhere.”
A stately home? A villa in the south of France? A luxury yacht, perhaps? Fergus, who together with his wife, Judith, 59, has spent the past decade and a half amassing a portfolio of 700 investment properties, looks nonplussed. “We’re not that kind of folk,” he says. “We’re pretty basic people.”
After a pause, Judith concedes that she might fancy a cruise — although neither of them likes the heat, and Fergus gets restless on long journeys. But, yes, they could buy a couple of farms on top of the two they own already, or add to their collection of racehorses.
Britain’s best-known buy-to-let landlords may seem unfazed by the prospect of their impending enrichment, but their announcement earlier this month of plans to liquidate their entire portfolio is attracting interest from some most unlikely quarters.

Fergus says several Russian buyers have emerged as frontrunners to buy all 700, for which they want £175m-£180m. “How serious they are, I don’t know,” he says. “There’s also a Bulgarian, a Saudi,one from China, one from Japan and one from India. We’re just sitting back and waiting to see who comes forward.” Realistically, any such buyer is going to demand a discount, but with borrowing of “only” £45m, the couple should be left with well over £100m, even after they have paid off their taxes.
“It’s only if we were unable to sell in bulk that we would consider selling one at a time,” Fergus says. “But that would be the last resort.” In fact, it seems unlikely to come to that: interest from institutional buyers means they should be able to sell the properties in blocks of at least 10, which means their tenants will be able to remain.
While the buy-to-let sector has been transformed in the public perception, in the space of a couple of years, from infallible get-rich-quick scheme to a licence to lose money, the Wilsons have shown everyone else how it should be done. The former maths teachers, who live in a £2m house they built for themselves in 60 acres south of Maidstone, Kent, acquired their first taste of the money to be made in property as students in the mid-1970s. They discovered that they could pay the rent on their top-floor flat in Blackheath, southeast London, by taking the whole house and subletting the three floors below. Then, in 1975, they bought their first home, a three-bedroom house on the outskirts of Maidstone, for £8,200.
A decade later, they embarked on a course that was to turn them into multimillionaires. When they bought another house a few doors away in 1986, they kept the old one and let it out — and found the rent more than covered the mortgage on their new home.
In the years that followed, helped by falling interest rates and banks desperate to lend, the couple, who had by then both given up their teaching jobs, embarked on a remarkable spending spree: in 2003, their peak year, they bought 350 homes. Their final purchase, last June, was of two houses in Ashford.
In a sense, the Wilsons were doing what countless other buy-to-let investors did, albeit on a much larger scale. Yet that is to belittle the scale of their achievement — and doesn’t explain why they have prospered while others have crashed and burned.
The couple followed several simple self-imposed rules. First, they kept it local: their properties are all within 40 minutes’ drive of their Kent home — 200 of them in and around Maidstone, 320 or so in Ashford and about 60 in Hawkinge, near Folkestone, where they bought an entire road of 15 homes. “Every town has the right side of the tracks and the wrong side of the tracks,” Fergus says. “It’s a matter of local knowledge.”
Important, too, was the type of property. Although they initially bought flats (and still have 30), they realised houses were a better bet: not four-and five-bedroom detached ones, but two-and three-bedroom terraces and semis.
The building — and subsequent upgrading — of the Channel Tunnel rail link lifted prices in Ashford, where some of the trains stop. A further boost is expected when the high-speed domestic rail service from the town goes fully operational in December.
This strategy has spared them the woes of amateur investors seduced into buying off-plan flats in city-centre blocks, which plunged in value even before they were completed — leaving the owners in instant negative equity.
The Wilsons’ portfolio has not been immune to the falling market — although the prices of houses have held up better than flats — but the recession has brought other compensations. At £80,000, the monthly bill on their hundreds of interest-only mortgages is still enough, says Fergus, “to give many people a heart attack” — but, thanks to the sharp fall in the Bank rate over the past 12 months, it is a fraction of what it was a year ago, and covered several times over by gross rents of £600,000. “If the interest rate had gone up rather than down, it would have been a disaster,” he says.
So why stop now? Managing the properties is a full-time job, despite a staff of 14, most of them responsible for maintenance. And with neither of their thirtysomething daughters keen to take their place, the Wilsons have been intending for some time to sell up.
The initial plan was to do so gradually, but that changed in spring last year, with a simplification of the rules concerning capital-gains tax, which meant they could liquidate their entire portfolio without effectively being penalised. Unfortunately, the climate was so bad that nobody wanted to buy. With the recent upturn, that has changed, and the couple are confident of selling.
In the meantime, £100m or no £100m, they are struggling to contemplate life without their empire. “We have very much enjoyed what we’ve been doing,” Fergus says. “It’s been a labour of love. It’s like having a child that’s grown up. I shall miss it terribly.”

Generali

SilverStandard wrote: »

Does anyone know the cap gains they will be liable for?

AIUI, the CGT position msy be complex as it will be calculated on gains/losses that have been realised.

If they sell a house bought a long time ago which has risen in value but which they have borrowed more against, it is possible that the CGT bill would be greater than the equity in the house.

Having said that, I read that they have the houses held by a holding company of some sort now. That may mitigate their CGT bill as there are rules about selling companies on retirement which means you can cash out with a much reduced (or even nil) CGT liability AIUI.

They should have done some CGT planning. Their bigger worry must be how to selll so many houses in such a small area without depressing prices.

If Zandoni's article from The Times is accurate and they do only have 45,000,000 in debt secured on 700 houses, if they sell for 140,000 per property which would be a small discount to the current market price then they gross 53,000,000. If those figures are accurate, it's hard to see how they can lose money. The figures that are reported do seem to change with each reading so the true numbers are hard to ascertain.

ManAtHome

Generali wrote: »

Having said that, I read that they have the houses held by a holding company of some sort now. That may mitigate their CGT bill as there are rules about selling companies on retirement which means you can cash out with a much reduced (or even nil) CGT liability AIUI.

Think that vanished for anything over a million when the CGT rules changed to a flat 18% (think it was between 5 and 10% in Ye Goode Olde Dayes of taper relief).

Generali

ManAtHome wrote: »

Think that vanished for anything over a million when the CGT rules changed to a flat 18% (think it was between 5 and 10% in Ye Goode Olde Dayes of taper relief).

Thanks ManAtHome. I'm not an accountant!

dopester

fc123 wrote: »

And an extra quote especially for DS...it made me cringe a bit too.;)

Hehe. You'd be correct fc - cringed here at reading that too. Nearly every Wilson article is riddled with the cringing stuff.

[“We’re not that kind of folk,” he says. “We’re pretty basic people.”] [After a pause, Judith concedes that she might fancy a cruise —]

Giving the impression they are just regular people with little by way of extravagance .... with a £2 million house they had built in 60 acres, 2 farms, 700+ houses and 30 flats, significant racing involvement paying fees to some top-class races and placing some big bets along the way (like £10,000 each way) ect ect.

fc123 wrote: »

so here is the proper article interesting The Mail got slightly different sums.

I'm guessing that photo was taken especially for the Times article. Not missing an opportunity to get free press to promote their sale.

Fergus says several Russian buyers have emerged as frontrunners to buy all 700, for which they want £175m-£180m. “How serious they are, I don’t know,” he says. “There’s also a Bulgarian, a Saudi,one from China, one from Japan and one from India. We’re just sitting back and waiting to see who comes forward.”

“It’s only if we were unable to sell in bulk that we would consider selling one at a time,” Fergus says. “But that would be the last resort.”

Like you, it all seems a bit of a crude selling play to me. Project active interest in what you're selling, with a secondary warning they'd be prepared to sell individually if offers for bulk were not to their liking.

fc123

I am quite into a bit of Sunday paper property !!!!!!. Cup of coffee, bacon brekky, look at the nice pics, sometimes I clip really nice ones and blu tac them to the wall for the week....to stop me from procrastinating. A subliminal kick up the butt......work harder, smarter, faster...then you too, fc123, can retire to 900k's worth of country cottage (with sea view).

All the features are EA led.....an interesting tale behind a sale kind of thing.

So far The wilsons have had quite a chunk of press about their wannabe sale.
Generally, something that is a good deal and targeted at wealthy types doesn't even make it into the press until post deal.

This was a good one from last weeks paper ...Bad, bad trainee journo title though....I think he really wants to work for The Sun on Headlines.

It's a crime ... I can't make a killing from my planning deal, says gangster film star


By Mark Anstead

Terry Stone found consent to build two homes on his Berkshire plot did not increase its value.

During the boom years, a sure way of adding value to a house on a decent-sized plot was to gain planning consent to build something bigger. With the first hurdle of planning permission cleared, developers would snap up such properties as they chased tempting profits.

But last year's steep dive in land values, which have fallen far further than the value of most residential property, means that today there is little wisdom in this approach - as actor and gangster-flick producer Terry Stone is discovering.

Last year Terry gained consent to demolish a six-bedroom Edwardian house and three-bedroom cottage on a 1.5-acre plot near Sunningdale, Berkshire, and build two luxury homes in their place.


Best-laid plans: Buyers are more interested in the house as it stands

Having begun the application in early 2007 he assumed it would add value to the property whenever he came to sell, even if the market had slowed. Little did he know about the financial crisis round the corner - or how hard it would hit developers.


According to Knight Frank's most recent land development review, land prices in the South East have since fallen by as much as 50 per cent. Although Terry's plot is ideally located just a few minutes' walk from a railway station, so far no developer has emerged prepared to pay more for the site than a buyer would pay for the existing property.


'I thought getting planning permission might help us stand out from the crowd,' says Terry, 38. 'I even lined up a builder who said he would take it off our hands when the permission came through, but last year he found he couldn't raise the finance and it all fell through. So we put the site on the market six months ago at £2.5 million, but only had silly offers coming through from bargainhunters wanting to slash the price to £1.8million.'

It took Terry, who has carved out his own niche playing tough gangsters and bent cops in a range of low-budget and very violent British films, more than six months to prepare the plans and submit the drawings to Windsor and Maidenhead Council. Now he has to concede that he may have been wasting his time.


'It seemed the effort and expense of sorting out the planning permission had been for nothing and I withdrew it from sale.'

But now Terry is marketing the property again. Encouraged by a rise in transactions in the area since the spring, he is hoping the shortage of stock reported by most local agents will finally bring a serious buyer to his door.


'I still think building two large houses on this plot might make it worth quite a lot of money in a few years,' he says. 'It could be a really good prospect for someone brave enough to take on a project, but I'll also sell to someone who just wants to update the house and keep it as it is.'

In fact, Terry and his 31-year-old wife Maxine own only half the property. The rest belongs to Maxine's parents, Joyce, 60, and Alfred Page, 73, who have lived there for nearly 30 years.


Read more: http://www.mailonsunday.co.uk/property/article-1213351/Its-crime---I-make-killing-planning-deal-says-gangster-film-star.html#ixzz0RD1C3QIw

So, the easy money has gone for a decade, at least, and it's not coming back.

dopester

In 2006, Terry and Maxine bought a half-share of the house

At least whatever they paid for the half-share, stayed within the family. I wonder if he paid 2006 market-value for their half-share to her parents.. like £1 million-ish.

Her parents having lived there for nearly 30 years... wonder what they paid..?

£2.5 million asking, and needs updating. With his rave-scene background and mixing with people who resort to violence for £10-£100... you'd think it would help keep house values in some sort of perspective. I'm not against generational home sharing though, and have seen it work really well with the right type of property.

Ever more of the older baby-boomers at the mid to top end will be looking to downsize.. and wanting to cash-in for their pensions. They just need a jolt. There isn't enough younger upsizing money around to support these crazy asking prices.