The Wilsons are going under.

aelitaman

Also it is posible to work out at what interest rate the BTL kings are at breakeven point

Clearly stated in the article that agents fees and repairs are 200 per month and profit 300.

So when mortgage payments hit 600GBP the Wilson portfolio is not generating any income.

600 per month = 7200 per year and I calculated before that average mortgage was 180K

7200 / 180000 = 4%. In the article they say above 3.5% means they are stuffed. A little inconsitancy in the facts here.

This is for Hamish.

You seem to believe that when they say they have 180million profit between value of portfolio and mortgages.

So 180mill / 700 properties = 247,000 profit per Property. But we know that that is the max valuation of some of the properties and the majority are fully valued at 180K. Hamish can you explain to me how a property valued 180K with a mortgage of 180K ha a profit on it of 247K?

Then they state that there mortgage payments to mortgage express per month are 353,000 and they also have a lot of mortgages with other providers.

So 353000 / 300 ~(average monthly mortgage per prop) = 1176 properties. I thought they said they had 700 properties not more than 1176. Another little inconsistancy in the facts.

In fact if the average rental money per prop is 600 GBP after chareges then with 700 properties they are making 700 x 600 = 420,000 per month. Less just the Mortgage express payment 420,000 - 353,000 = 67,000 per month left to pay all the other mortgages. Even if there were no other mortgages and they clearly state there are then this would make a max profit of 67,000 x 12 = 804,000 per year. So where is this 2mill per year income coming from?

Something smells here and it is not the smell of filthy lucre no wonder they say buy to let is dead.

Mr.Brown_4

aelitaman wrote: »

Something smells here and it is not the smell of filthy lucre no wonder they say buy to let is dead.

Seemed a bit odd to me that they were wearing the same clothes as in previous publicity snaps. If I had a million or more I would be wearing an expensive hand made suit, one that doesn't shout chav but says class. And I might well have the Aston showing in the background. That's if I were a git of course.

Which I would be.

carolt

As the newspaper article (I was just reading it in hard copy before coming on here, delighting in all its gory details (including the fact that they can only afford one outfit each ))gives a nice picture of the said house for sale at 180K, it should be a piece of !!!! for any of the more experienced practitioners on here with a teensy bit of time on their hands and an interest in these matters (dopester, possibly?) to locate said house and local real recent sold prices?

Would be interesting.

dopester

For the moment I'll meet you half way Carol, tracking down the image of the house you were referring to from yesterday's Guardian proper.

I'm not going to try and track it down immediately (tired and got to do some research on car repair), but if it's still up for sale and on Rightmove, then it should be easy for someone to match up.

---

Click thumbnail image twice to expand fully.

Rather than make 1+ imageshots to cover the full article, I borrowed the Guardian report from elsewhere (below).

Developers conspired to inflate property values and post false sales figures on the Land Registry, says Fergus Wilson, who claims he turned down numerous unethical deals.

One developer told Wilson he could buy the first property on a new-build site at £207,000, so long as it went down in the Land Registry as £239,000 (the difference being a "gift" from the builder).

Developers are keen to establish benchmark valuations on the Land Registry website so that later buyers – and mortgage companies – can be led to believe the price reflects the true market value. Price-ramping was common among developers of new-build flats when buy-to-let finance was easily available, which subsequently left buyers holding properties that had instantly fallen in value.

In Wilson's case, the property would have been registered as having been sold for £239,000, but the developer would pay back the difference after the sale was completed.

"I said, 'Isn't that illegal?' But they said that's what they have done everywhere," says Wilson. When he refused to play the developer's game he was offered even more inducements. "They said, 'What about four for £700,000?' I said no. Then they said, 'What about four for £600,000?' Their final offer was four for £550,000." That was equal to £137,500 for each property, compared to the £239,000 that the developer hoped to get into the Land Registry. Wilson didn't buy.

A code of conduct on the use of discounts and incentives has been agreed between the Council of Mortgage Lenders, the Royal Institution of Chartered Surveyors and the Home Builders Federation, to prevent the worst excesses of price-ramping. This took effect in September 2008 but, with the boom in apartment building now over, it has come too late for most.

Wilson says on mixed developments he tended to be offered discounts on the flats but not the houses. In one case, he was offered substantial discounts on flats on sale at £130,000 but none on the adjacent two-bed houses, which were being marketed at £132,000. Since then, the houses have maintained their value, but the flats have fallen significantly.

The behaviour of some lenders during the boom bewildered the Wilsons. Many of their loans were sold on in batches to other investors as part of a "securitised" deal, often with the mortgages of other, unconnected, borrowers thrown into the package. Such supposedly low-risk deals – called asset-backed securities (ABS) – collapsed in value in 2007 and 2008, and were at the heart of the US "toxic mortgage" sub-prime crisis. "They took some of our properties, put them into an ABS with flats in northern cities. They sliced and diced them until no one had a clue what was going on," says Wilson.

More annoying to the Wilsons was the apparent ease with which other buy-to-let investors could obtain "no questions asked" loans during the boom. He says he always offered proper income and security but lending standards fell considerably when "self-certification" loans became popular.

After the bubble burst, Wilson says the chaos and disorganisation at some lenders meant they had little idea who they had lent to.

"Certain lenders didn't even know we had a mortgage with them. They were in the land of the blind, and we were the one-eyed kings."

poppy10_2

dopester wrote: »

This looks to be very similar, although it's not quite the same - perhaps another house on the same development?


http://www.rightmove.co.uk/property-for-sale/property-28788638.html
Manor House Drive, Ashford, Kent - £179,995

74 House Manor Drive sold for £105,000 in 2002.

carolt

I think someone is telling some porkies.

As poppy10 correctly points out, the house she pictures is for sale for £179,995. The one they picture is not for sale - even if it had gone under offer since the story wa written (unlikely) it would still show as 'under offer' - it doesn't. The only house that was bought in that road in 2002 for 105K (no 74) was sold in 2006, acc to the sold prices websites.

So by definition, it's not being sold by the Wilsons now.

Recent sold prices for that street - and it's clearly the same street - were in the region of 145K - making their total portfolio worth a lot less than they claim.

And let's not forget this is a 3-bed!

The vast bulk of their portfolio - 2 beds - must be worth a lot less - unlikely to fetch more than 120K each.

Plus, as a potential buyer, you'd know to strike a hard bargain with the Wilsons - knowing that if this one got away, there'd be another 700 for sale over the next year or two.

Also interesting to note that when the Wilsons bought this house for 105K back in 2002, contrary to the image they present of canny buyers who strike a hard bargain, they were actually undercut by many of their neighbours, who paid 95K in the same year for what are clearly all more or less identical houses.

Pah.

aelitaman

http://www.nethouseprices.com/index.php?con=sold_prices_street_detail&street=MANOR+HOUSE+DRIVE&locality=KINGSNORTH&town=ASHFORD&cCode=EW&year=All&house_style=All&house_age=All&search_radius=&outcode=TN23&incode=3LP

74 manor house drive was sold for 160K in April 2008. Current selling prices are between 140K and 175K.

dopester

poppy10 wrote: »

This looks to be very similar, although it's not quite the same - perhaps another house on the same development?


http://www.rightmove.co.uk/property-for-sale/property-28788638.html
Manor House Drive, Ashford, Kent - £179,995

74 House Manor Drive sold for £105,000 in 2002.

dopester wrote: »

Whilst many of these new builds look the same to me Poppy, you've done really well to narrow down the style so closely.

Going from the postcode of that one you found, TN23 3LP, and running it through Bing Maps (I've got the 3D plugin and rotate maps around), I found this house... bang in the exact same postcode.



The offpart from the road bending around on the left, to a row of 4 houses. I can't be 100% certain though. It's a fairly good match. The roof, and the bricks looks slightly different shade in Bing maps.. but it could be different light/shading/weather/ different camera settings.

Edit extra: If it is that house, it's also disturbingly close to the sounds/shake/fumes of a main road and train tracks - to be commanding the higher end valuation/offers for such a house in the market - in my not so knowledgeable opinion.

carolt

Wow, amazing detective work, dopester!

fc123

carolt wrote: »

Wow, amazing detective work, dopester!

http://www.connexions-direct.com/jobs4u/index.cfm?pid=62&catalogueContentID=643