psst ... someone just bought a buy to let empire

chucknorris

michaels wrote: »

Some might say joining the 'too big to fail' club is actually just another example of successful rent seeking. There is more profit to be made from gaming the system than by playing the game according to the 'market' rules.

But the point is that they didn't sit down one day and decide to move from having more money (unrealised equity) than they could probably spend, to the whole business being at risk. Sure they came through it, but the result could have gone the other way, they were not in control of their own destiny. A bit like the closing group stages of the champions League, they just didn't need to win, they also were relying on the results of other games to go in their favour.

Don't get me wrong, although I don't particularly warm to the Wilsons, I don't have any malice towards them either, I really don't have an axe to grind. I am merely giving my 2 cents. I think it is important to have a 'life plan', especially when entering the last stage of your life (retirement). I believe that he was pushing 60 when the SHTF in 2008. I'm 57 now, so at about that same stage of life, I just don't see the logic of risking (potentially) everything just to get another million (which I probably wouldn't live long enough to actually spend anyway). Observing the Wilsons reinforced my belief that my de-risking strategy was the correct way for me to go. At this stage of life I think that it is more important to consolidate, rather than expand. When I was in my 30's I took significant risks, and at that stage of life it was appropriate, but now is not the time. But it wasn't easy for me to change, I have struggled at times, but I now believe I have managed to get my head where it needs to be (or at least well on the way).

chucknorris

Graham_Devon wrote: »

He was on interest only on a special deal to keep him afloat.

So unless he made a concerted effort to pay down the debt, he was only ever paying the interest.

The Wilsons were making that effort, at one point in 2010 they were selling at least two houses a week, that would definitely reduce their debt.

http://www.theguardian.com/money/2010/mar/06/buy-to-let-fergus-judith-wilson

Graham_Devon

padington wrote: »

You kidding ? You don't tell the tax man you're earning more than you are. Chances are it's the other way around.

It was stated, by him, not long ago that he had already successfully sold off 200 houses, leaving 700 properties. Edited to add, thankyou Chuck for the proof via that article!!

Now he's saying he's sold the whole 900 to a foreign company.

So he's either bought 200 more, or he never sold off 200....and he hasn't just sold off 900. If he hasn't sold off 900, it makes the £250m figure look massive with the buyer paying a price 130k (on average) above the value on each and every property.

Doesn't really matter to be honest, the point is the track record on this one. Absolutely nothing ever stacks up. He apparently chucked out 200 housing benefit claimants over a year, but the council hasn't seen any of these people? Well how is that working then?

Not that many care, as the overarching point with this is some kind of forum war.

I'm still interested as to how this will effect stamp duty etc. He says he has "taken measures" to ensure this sale doesn't effect house prices in the area. What measures can be taken? A sale is a sale is it not?

Zandoni

chucknorris wrote: »

The Wilsons were making that effort, at one point in 2010 they were selling at least two houses a week, that would definitely reduce their debt.

http://www.theguardian.com/money/2010/mar/06/buy-to-let-fergus-judith-wilson

The main problem is that the press just publish whatever the Wilsons say, I doubt they ever check any of it. This means every story published is probably not entirely true.

chucknorris

Zandoni wrote: »

The main problem is that the press just publish whatever the Wilsons say, I doubt they ever check any of it. This means every story published is probably not entirely true.

It isn't a problem to me, I have no real financial (or otherwise) vested interest in what happens to the Wilsons. My only interest in their history is/was merely to help convince myself that my own change of strategy approaching retirement (the reduction of risk) was the correct strategy for me to adopt. There isn't any point in taking on (or maintaining) risk if the reward/downside ratio doesn't work in your favour.

ukcarper

Graham_Devon wrote: »

It was stated, by him, not long ago that he had already successfully sold off 200 houses, leaving 700 properties. Edited to add, thankyou Chuck for the proof via that article!!

Now he's saying he's sold the whole 900 to a foreign company.

So he's either bought 200 more, or he never sold off 200....and he hasn't just sold off 900. If he hasn't sold off 900, it makes the £250m figure look massive with the buyer paying a price 130k (on average) above the value on each and every property.

Doesn't really matter to be honest, the point is the track record on this one. Absolutely nothing ever stacks up. He apparently chucked out 200 housing benefit claimants over a year, but the council hasn't seen any of these people? Well how is that working then?

Not that many care, as the overarching point with this is some kind of forum war.

I'm still interested as to how this will effect stamp duty etc. He says he has "taken measures" to ensure this sale doesn't effect house prices in the area. What measures can be taken? A sale is a sale is it not?

As I said earlier I know very little about the Wilsons and the detail of stamp duty, but if the properties are held by a company and he sells the company will stamp duty be payable?

chucknorris

ukcarper wrote: »

As I said earlier I know very little about the Wilsons and the detail of stamp duty, but if the properties are held by a company and he sells the company will stamp duty be payable?

I don't know the answer to that either, but I'd be interested to know what the rules are.

wotsthat

ukcarper wrote: »

As I said earlier I know very little about the Wilsons and the detail of stamp duty, but if the properties are held by a company and he sells the company will stamp duty be payable?

If you buy shares in a company stamp duty is payable at 0.5%.

westernpromise

wotsthat wrote: »

If you buy shares in a company stamp duty is payable at 0.5%.

If you buy more than six properties in one go you pay stamp duty at the commercial rate.

The stamp duty on say 1,000 £250k properties sold as lets would, from next April, be £10k per property which is £10 million. Sold en bloc under the commercial stamp duty rate, the bill would also be £10 million.

http://www.hmrc.gov.uk/tools/sdlt/land-property-results.htm?dates_Transaction=01%2F05%2F2016&moneyResidential=0&moneyNonResidential=250000000

Where you gain is if you're selling say seven £4 million houses in PCL in one hit. Each individual sale would cost the buyer £514k if bought as individual buy-to-lets, so £3.6 million in total. Sold as a package of seven, in contrast, the buyer would get the commercial rate and the stamp duty would only be £1.12 million.

If you were selling 8 or 9 properties like that, packaging them as one deal would effectively get your buyer one of them for free versus buying them one at a time from individual sellers and paying the residential stamp duty rate on each.

This is, I guess, how corporates will look to assemble lettable portfolios at minimal stamp duty cost: more than seven at a time.

Chuck I think has 6? If so, and if I were in his shoes, I would look at buying one more before April next year. When it comes to selling, it might be that having seven to sell makes the stamp duty a bit cheaper and hence enables the buyer to pay him a little more - although there is a breakeven / crossover point of course.

MFW_ASAP

If I were chuck, I'd move into each one for six months and sell them as my main home free of tax. It's just 3 years out of my (retired?) life and I could probably do a bit of work on them while there to maximise the sale price, while eliminating the sales tax.