Remember Fergus Wilson?

wotsthat

OffGridLiving wrote: »

The global banking crisis was caused by BTL?

That and Homes under the Hammer.

HAMISH_MCTAVISH

Graham_Devon wrote: »

But if a bank is going to go bust because of it's lending to customers, then I think it's fair to say this sort of lending was a symptom of the banks going bust.

Except of course, that the bank wouldn't have gone bust because of the Wilsons.

What Fergus actually said was.....

Defaults by newly unemployed tenants jumped as the recession began to bite, and he admits October 2008 was the crisis point, when nearly 100 of his properties, 13% of the total, were occupied by tenants who were not paying all or part of the rent. "We asked for a meeting with our lenders. I said, if you think you can run the show better than me, you can have them all back. They said no. They were determined that we shouldn't go under. If we went under, then everyone went under."

But given his lending was split between at least 4 major banks, there's no way a couple of hundred houses each would have caused their collapse.

And it turned out to be a cashflow problem, which was solved via standard SVR reversion and some cash-flow negotiation with lenders.

In 2008, with banks pulling the plug on buy-to-let lending, the Wilsons were struggling to refinance their borrowings. But after Lehmans collapsed in September 2008, the Bank of England slashed its base rate to 0.5% and the Wilsons found on nearly all their loans they could revert to base rate plus a fixed percentage – typically 1.5% – at the end of the fixed period.

He has also renegotiated payment terms so that, instead of paying at the start of the month, he now pays at the end of the month to help with cashflow. It means that, despite the credit crunch, falling property prices, falling rents (down 10%, he says) and jobless tenants, in 2009 the Wilsons earned more income – and paid more tax – than at any time in their lives.

Since then of course, unemployment and tenant arrears have fallen markedly, rents and house prices have risen markedly, and the Wilsons have been able to recover nicely, while still paying the banks healthy returns on their lending.

Which nicely illustrates why banks have helped so many people hold through the cycle this time, having learned from their mistakes in the 90's.

It's in their commercial best interests to do so.

grizzly1911

IveSeenTheLight wrote: »

I bought a house that was valued at £240k for only £222k.
I then put in a new Kitchen (£4.5k), carpets, painted throughout, spruced the place up all in for circa £6.5k.

It was then valued at £258k. (Partly because I sold the house next door for £255k between buying the £222k and renovating the property)

I've not sold as I'm renting now for £1300 pcm on an invested £72k.
This is a return of 21.66% of my invested sum or more realistically 13% after all the costs / taxes are deducted.

There are opportunities to snap up bargains out there if you are ready and prepared to move.

+/-10% variance is fair enough 200-400% variance is questionable unless there is further information.

Graham_Devon

Mr._Pricklepants wrote: »

Jesus Graham. There's no two ways of reading post 26. Really not.

Post 21 in direct response to myself? .....

Yeah yeah, he got 'lucky'

ruggedtoast

I notice we are back in this atavistic circularity this forum has, where how successful someone is is measured entirely by how much money they have.

There are many clever intelligent people in the world doing practical useful things that require skill, ability and sacrifice, that actually has a measurably positive effect on the world around them.

Denise and Fergus Wilson are not among these people. They are a couple of successful speculators who benefitted from lax financial regulation and economic conditions they neither foresaw nor had any control over. If what they did was in any way repeatable the buy to letters on here, with 10,000 posts to their name crowing about their 3 stud wall flats in Greater Nowhere would all have done the same, but they havent.

God knows how much money in housing benefit is being poured into these ratbags pockets to perpetuate the myth that the bank that lent money to them is still solvent. If ever there was a walking bill board to highlight everything that is corrupt, immoral and wrong with buy to let, it is them.

ILW

ruggedtoast wrote: »

I notice we are back in this atavistic circularity this forum has, where how successful someone is is measured entirely by how much money they have.

If the aim of a venture was to make money, that is a pretty good guide to how successful it was.

Mr._Pricklepants

ruggedtoast wrote: »

I notice we are back in this atavistic circularity this forum has, where how successful someone is is measured entirely by how much money they have.

Well this is moneysavingexpert.com, so you'd expect the debates to be about money. I'm sure there are other forums which may appeal to you if money is such a dirty word for to you.

This being said, I can't see anyone on this thread measuring a human being's worth by financial wealth only.

For all I know, Mr. Wilson could lead a very fulfilling life, probably loves his wife and daughters dearly and gets lots of joy out of horse racing and rugby. I also read he once ran for the police commissioner role. Used to be both math teachers, both of them. Busy bees, those Wilsons. It sure beats racking up thousands of posts spewing bitter, envious and ageist drivel on an internet forum.

OffGridLiving

wotsthat wrote: »

That and Homes under the Hammer.

And Phil and Kirsty, let's not forget the damage they wrought to the global economy.

N1AK

ILW wrote: »

The main reason he was lucky is because he gave it a go. As opposed to sitting back and complaining.

Like someone who plays the lottery see you do get it after all.

Mallotum_X

At the end of the day they did get lucky and it would seem made a killing off the back of it. The business model they adopted is high risk - both to them and their lender. But they have managed to hang on to this so far, and may well manage to walk away with the cash. There would not be many advisor's who would recommend this as a good route to riches.

I think what irks many is when the likes of the Wilsons act like they are great business people, as clearly they are not. However it would seem that for them this business model did work.

They may well still find it hard to sell off as there still is no diversity in their portfolio. If they had bought across a wider area then maybe they would have found it a lot easier to sell on, but with the current lack of interest by the banks to lend on residential investment on this scale maybe not.

It would be interesting to see their next moves, i would assume they would be selling the portfolio off in smallish chunks in a controlled way. If they can manage to reduce the property they own in such a concentrated area then who knows they may well find they can borrow more across a wider area as the next "boom" starts.