The UK biggest landlords are selling off their portfolio

Landlord Expert
By Landlord Expert September 23, 2014 15:14

Fergus and Judith Wilson, Britain’s biggest buy-to-let landlords, are a step closer to selling their entire property portfolio for a minimum £250m after receiving interest from three Chinese investors in the past few days.

Mr Wilson, a former maths teacher who has built a portfolio of about 1,000 properties in Kent with his wife Judith, told the Financial Times it was “highly possible and approaching probable” that he would sell to one of the three investors.

“I had three approaches Friday and Saturday from China,” said Mr Wilson. “Whoever is ready with the money first and the price we want, that’s who we will go with.

“It will get to crunch point where we agree a price and it has to be quick, because property prices are going up all the time,” he added. “We’re likely to go with someone who does not have to raise the money.”

The minimum Mr Wilson is willing to accept for the entire portfolio, complete with tenants, is £250m, which he said is based on current market prices according to his calculations using Rightmove, an online property portal.

“If someone offers me £220m, I’ll say no,” he said. “I’m not desperate to sell – this is not a distressed sale. I’m full of tenants. But it shall break my heart to sell all these properties – my wife says they’re like children to us.”

The landlord intends to sell the entire portfolio in one lump, as “you can’t take them to the grave”, and hopes to complete the sale “very shortly – within the next month”.

Mr Wilson said he and his wife would need to repay around £40-45m to about 14 lenders. After paying tax and disposal fees, he said he hoped to walk away with at least £100m in profit “which should be enough to pay for fish and chips for the rest of my life”.

Mr Wilson believes the surge of Chinese interest was “inspired” by the frenetic flotation of Alibaba on Friday, which saw shares increase by 38 per cent on the ecommerce company’s first day of trading.

The landlord said he has also received interest over the past few months from consortiums representing professional football players, British institutions as well as a range of overseas investors.

The proposed sale is not the first time the Wilsons have attempted to offload their portfolio, comprising two and three-bedroom houses. The couple had intended to exit the business in 2008; however the financial crisis forced them to stay in the market in order to meet mortgage bills.

At this point, Mr Wilson said they owed about £350,000 a month in mortgage payments. One of their main lenders was Mortgage Express, which was nationalised when parent company Bradford & Bingley faced insolvency.

Rising house prices, despite recent signs of easing, have provided an opportunity for the Wilsons to sell. Prices in Kent are up by more than 8 per cent compared with a year ago, according to Land Registry data.

“All our properties are in an area where there’s a shortage, which is why they’re shooting up in price,” said Mr Wilson.

The Wilsons have also been involved in high-profile spats with tenants. Earlier this year, he sent eviction notices to about 200 tenants on housing benefit, claiming they could not afford to pay and that the move was aimed at preventing them from spiralling into debt.

The couple began building their portfolio in the mid-1990s, remortgaging every few years in order to release gains from increasing house prices, to help purchase another property.

By mid-2000, they had amassed a portfolio of around 1,000 houses, many in Maidstone and Ashford. Mr Wilson said his property empire was built on the ease of gaining a mortgage in the 1990s and early 2000, describing the market as the “wild west” in which borrowers simply had to sign their name to obtain a loan.

Although buy-to-let loans remains unregulated, the Financial Conduct Authority implemented stringent residential affordability rules in April this year, to prevent a return to irresponsible lending.

The watchdog recently warned lenders over the risks that tighter rules on home loans could tempt borrowers into fraudulent applications for buy-to-let mortgages.

 

Landlord Expert
By Landlord Expert September 23, 2014 15:14

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