Meet the Wilsons Part 3 - The TV bonkers debate

Bullfighter

chucky wrote: »

they are so much toast that they're still around 3 years after peak prices fell.

the only place that they're toast is on these types of forums and the usual suspects minds...

Given that over the past 3 years we have had artificially low interest rates, government intervention and Quantitative Easing it's not surprising that these parasites have managed to cling on until now.

Bring on higher interest rates.

Goodbye the Wilsons

chucky

Bullfighter wrote: »

Given that over the past 3 years we have had artificially low interest rates, government intervention and Quantitative Easing it's not surprising that these parasites have managed to cling on until now.

Bring on higher interest rates.

Goodbye the Wilsons

so you're saying they're not toast and still live to fight another day and of course buy another house:)

Spartacus_Mills

chucky wrote: »

they are so much toast that they're still around 3 years after peak prices fell.

the only place that they're toast is on these types of forums and the usual suspects minds...

Precisely.

These threads frothing about the Wilsons used to be entertaining but now are becoming very stale.

They own 900 houses, or own them with a mortgage, the bank is hardly likely to pull the plug.

I do not like the Wilsons, I do not like what they are and what they stand for and symbolise. However they are not going under anytime soon. Fergus is right when he says if they are in trouble then everyone in BTL is in trouble.

People who froth about them need to move on, especially the knuckle draggers on HPC.

chucky

Spartacus_Mills wrote: »

Precisely.

These threads frothing about the Wilsons used to be entertaining but now are becoming very stale.

They own 900 houses, or own them with a mortgage, the bank is hardly likely to pull the plug.

I do not like the Wilsons, I do not like what they are and what they stand for and symbolise. However they are not going under anytime soon. Fergus is right when he says if they are in trouble then everyone in BTL is in trouble.

People who froth about them need to move on, especially the knuckle draggers on HPC.

spot on - i don't like them (even though i don't know them) but find it strange that people actually think that these guys will become 'toast'.

they will be better off than a very large majority of people on this forum...

John_Pierpoint

They and the banks gambled and "won", not because they were right, but because out government decided that if they failed the fall-out would be too terrible to contemplate.
So our government borrowed and printed unbelievably vast sums of money, forced down interest rates, and "gave" that money to the banks and thus to the Wilsons.
The sting in the tail is that all this money has to be refinanced over the next several years as the loans come up to be repaid (impossible) or rolled over. The alternative is simply to print the money. Had we just discovered North Sea Oil (like at the end of the 70's) or if we had a tiny population like Norway, there would be no problem, what ever route out of our current mess is chosen.
http://en.wikipedia.org/wiki/Demographics_of_Norway
http://en.wikipedia.org/wiki/Demographics_of_UK
In the mean time it is looking like you, me, our children and our children's children will be paying off the money borrowed from the future in the last 15 years. The lenders know this and will expect their pound of flesh.

RabbitMad

chucknorris wrote: »

But you can't have it both ways, they can't be both in serious negative equity AND trying to sell now to avoid paying 40% CGT

But they could be in "negative equity" once CGT is taken into account.

Example:
House 1 - buy @ £100K on 90% mortgage
House 2 - buy @ £100K on 90% mortgage
Total Assets £200K Total Bowwowings £180K Net worth £20K

HPI happens
House 1 & 2 now worth £150K each Mew on 90% mortgages
releasing another £90K
Buy 6 more house each for £150K on 90% mortgages
Total Assets £1.2 M Total Bowwowings £1.08M Net worth £20K

Prices drop by 10%
Now 8 houses worth £1.08M with £1.08M owing. However can't sell houses 1 or 2 for £135 as £6,300 cgt owing at 18%

chucky

RabbitMad wrote: »

But they could be in "negative equity" once CGT is taken into account.

Example:
House 1 - buy @ £100K on 90% mortgage
House 2 - buy @ £100K on 90% mortgage
Total Assets £200K Total Bowwowings £180K Net worth £20K

HPI happens
House 1 & 2 now worth £150K each Mew on 90% mortgages
releasing another £90K
Buy 6 more house each for £150K on 90% mortgages
Total Assets £1.2 M Total Bowwowings £1.08M Net worth £20K

Prices drop by 10%
Now 8 houses worth £1.08M with £1.08M owing. However can't sell houses 1 or 2 for £135 as £6,300 cgt owing at 18%

i doubt it very much that they'd be paying CGT.

with such a large number of houses they would be running the set-up as Ltd Co's where they would only pay corporation tax on any declared profit.

but anyway corporation tax which would be less than CGT.

the_flying_pig

Spartacus_Mills wrote: »

...Fergus is right when he says if they are in trouble then everyone in BTL is in trouble...

I disagree strongly. I always thought that statement this was one of the craziest things I'd ever heard - surely a couple that:

(1) owes a nine figure [i.e. over £100m] amount;
(2) that is borrowed against a completely undiversified portfolio [all houses within the space of a few miles of each other];
(3) has an extremely high loan to value due to always putting down the minimum deposit [see Judith Wilson's first golden rule - "Never use your own money" http://www.jwipb.co.uk/how.asp];
(4) immediately rushes out to buy a new house the minute there's any spare equity kicking around [hence ownership of c. 700 properties];
(5) always borrows interest only; and
(6) bought nearly all of their properties within pretty much the space of ten years [starting in the mid 90s], meaning that they didn't get any for, you know, less than tend grand or something silly,

might, you know, just face a teensy-weensy bit more risk than, say, a pensioner who bought a single BTL property for cash twenty years ago, or a retired couple who bought two in the early part of the boom on a 50% LTV basis & who are now midway through paying off repayment mortgages? or am i being stupid/missing something?

[what follows is pure idle speculation, of course, i am well aware that {other than inheritees} you don't appear on the times rich list without something about you, but i do find it plausible]

i personally think there's a very strong risk that they'll end up going under, and that they will have realised this at least two years ago. i'm not an expert on this at all but my lay understanding is that when you go bankrupt any gifts you have given within the last five years can basically be clawed back from the recipient [without such a rule no-one would ever lose out from bankrupcy], it would not surprise me if they'll have made a few really big cash gifts [e.g. £5m or something] to offspring say in late 2007 when they must have realised what was happening & will be hoping to stave off the inevitable until late 2012, when that money will be safe.

in other words, whilst they'll lose nearly everything they'll still come out of it considerably richer than you or i. truly an inspiring story.

chewmylegoff

chucky wrote: »

but anyway corporation tax which would be less than CGT.

minimum rate of CT is 21% (28% on profits over £1.5m), and then you've got to pay the post tax profits to yourself by dividend which incurs 25% more tax if you are a higher rate tax payer.

CGT is 18%.

so no.

chucky

chewmylegoff wrote: »

minimum rate of CT is 21% (28% on profits over £1.5m), and then you've got to pay the post tax profits to yourself by dividend which incurs 25% more tax if you are a higher rate tax payer.

CGT is 18%.

so no.

the underlying point was that they don't pay CGT on any value increases on any sold property, ever. however much the property value increases by.

all proceeds from sales would not be liable to CGT and are filtered back into the company to pay Corporation Tax on profit minus deductions and expenses.

running the business out of a Ltd Co is much more tax efficient than running the business as an individual. that was my point.