Britain’s biggest buy-to-let investors have sold nearly half their £250m property portfolio – Should You?

The Wilsons are an extraordinary couple. Fergus and Judith were both previously maths teachers. But starting in the mid-1990s they built up a buy-to-let property empire that eventually led to them owning 900 houses in Kent.

They put their success down to the appearance of buy-to-let mortgages with favourable terms which enabled them to expand their portfolio quickly. In those days, it was easy to get loans with a high loan-to-value ratio that were also interest-only. In fact Fergus Wilson has claimed in an FT interview that in those days, the only requirement was that you could spell your name and that checks were almost non-existent.

However, recently the couple have sold off about 400 of their properties in Kent, mostly to overseas buyers. Mr Wilson thinks that the era of the amateur landlord is over and that life is much tougher these days for people trying to acquire a buy-to-let property. In the article, he quotes 60% loan to value mortgages as a particular problem.

The FT quotes OneSavings Bank which has decided, since Brexit, to focus on professional buy-to-let investors since it considers that they will be better able to ride out any market volatility. It has also tightened lending criteria for smaller landlords.

Meanwhile Mr Wilson, who one suspects never listened to this kind of advice but ploughed on regardless, is waiting to complete the sales of property within his portfolio, pay off his mortgages and hopefully walk away with £200 million profit.

Although he doesn’t own property in London, he describes a type of overseas buyer who is desperate to obtain a property in the UK. He believes that Brexit will in the short term assist these buyers, as the fall in sterling will help them to afford a property in the UK.

He believes that in the longer term, UK property prices will be underpinned by the shortage of housing and that the developers cannot possibly deliver the numbers of houses that are needed in the next 15 years.

It’s likely that one of the Wilsons’ motivations may be retirement as both are at the age where the challenges of running a large property portfolio may be just a little too much. It’s certain that a new generation of keen private landlords are seeking to replicate their success, no matter what the challenges.

One of the challenges for landlords who are in the business long term is to keep up with the constant changes in legislation that affect the property rental business. This is a key reason to employ an agent who can keep up with them on your behalf and let you know about the issues that are relevant to you.

The Association of Residential Letting Agents (ARLA) has apparently said that there are currently 160 regulations that apply to property rental. Add to this the assured landlord schemes and guidance that landlords are supposed to take on board, and you can see how someone who has say, two or three Failsworth lettings, might feel overwhelmed by the level of regulation with which they must comply. What’s more, with the law constantly being challenged by court cases, the interpretation of it can change rapidly.

This is why landlords who don’t want to find themselves on the wrong side of the law employ a professional lettings agent to advise them. Only an agent who has looked at your particular property can advise as to what specific legislation you may need to take into account.

Of course, some new laws can be helpful to landlords. For example, landlords are now able to carry out checks known as “Right To Rent”. This will allow them to check that the person they are thinking of signing up as a tenant has the right to be in the UK. This will help them to avoid the potential £3000 fine for each tenant who is here illegally.

Some commercial finance websites are also reporting that around a half of landlords are intending to raise their rents next year. If returns are falling, many landlords will feel under pressure to increase rents in order to restore some profitability to their portfolio.
The Wilsons may feel that it’s all become too much effort and that now is the time to cash in their portfolio.

Possibly so, but one thing is certain – there will still be plenty of willing buyers out there.

Queens Speech 2015 – What it means for Landlords & Investors

Among the many measures to introduce more legislation these are the ones which will affect landlords and property investors

Immigration Bill

downloadThe government is promising to “control immigration” and put “hard-working British families first”. Its Immigration Bill is designed to support working people, clamp down on illegal immigration and protect public services.

Specifically, it will include a new offence of illegal working – with police given the power to seize the wages paid to illegal workers as the “proceeds of crime”.

There are also proposals to deal with unscrupulous landlords and to evict illegal migrants more quickly, while all foreign criminals awaiting deportation will be fitted with satellite tracking tags.

It will also become an offence for businesses and recruitment agencies to hire abroad without first advertising in the UK – a policy which featured prominently in Labour’s election manifesto – and a new enforcement agency will be set up to tackle what the prime minister called “the worst cases of exploitation”

Housing Bill

imagesPlans to support home ownership and extend the right-to-buy scheme to 1.3 million social housing tenants in England feature in a new Housing Bill. Under the plans, housing association tenants will be able to buy the homes they rent at a discount.

There will also be help for first-time buyers, with 200,000 starter homes made available to under-40s at a 20% discount. Both are commitments which were included in the Conservatives’ general election manifesto.

The government says the bill will increase the housing supply and ensure local people have more control over planning.

 

Full Employment and Welfare Benefits Bill

 

images (1)This bill, as the name would suggest, is designed to achieve full employment “and provide more people with the security of a job”. The aim is for two million more jobs and three million new apprenticeships to be created. Ministers will be required to report annually to Parliament on their progress. The legislation will also implement a planned reduction in the welfare cap – from £26,000 to £23,000, and freeze working-age benefits, tax credit and child benefit for two years.

As part of the government’s welfare reforms, young people will be required to “earn or learn”, with automatic entitlement to housing benefit for 18-21-year-olds scrapped

 

 

HS2 Bill

 

download (1)The government is pressing ahead with legislation that will eventually enable work to start on the £50bn HS2 high-speed rail link. Legislation which will give the government the legal powers to construct and operate the London to Birmingham first phase of HS2 is going through Parliament. If it progresses smoothly, it should receive Royal Assent around the end of 2016, with work beginning on the project in 2017, with a finishing date of 2026.

Extremism Bill

imagesThis includes measures to tackle broadcasting of extremist material. The government wants to strengthen watchdog Ofcom so that it can take action against channels that transmit extremist content. The legislation will also propose the introduction of banning orders for extremist organisations who use hate speech in public places, but whose activities fall short of proscription. A new power to allow police and local authorities to close down premises used to support extremism will also feature. And employers will be able to check whether an individual is an extremist and barring them from working with children.

Draft Public Service Ombudsman Bill

images (2)This is the one draft bill to feature in the Queen’s Speech. It proposed to reform and modernise the Public Service Ombudsman sector to provide “a more effective and accessible final tier of complaints redress within the public sector”. It would absorb the functions of the Parliamentary Ombudsman, the Health Ombudsman, and the Local Government Ombudsman and potentially the Housing Ombudsman.

 

What do you think about the Queens Speech? Get in contact with us today to discuss.

Greenheys Road

**Newly Decorated** Brentwood Lettings are pleased to present this 2 bedroom garden terrace property to rent in…

Price: £ 520.00 pcm

Ashworth Street

**STUNNING REFURBISHED FAMILY HOME** Brentwood Lettings are pleased to offer this 3 bedroom semi detached property to…

Price: £ 700.00 pcm

Holmfield Avenue

**DHSS Welcome** Brentwod Lettings are pleased to offer this spacious 2 bedroom property to rent in Moston.…

Price: £ 550.00 pcm

Hopwood Street

Brentwood Lettings are pleased to offer this well presented 2 bedroom, semi detatched, new build property situated…

Price: £ 650.00 pcm
Featured

Lancaster House

** FULLY FURNISHED APARTMENT** Brentwood Lettings are pleased to offer this newly renovated 2nd floor apartment in…

Price: £ 950.00 pcm

Quilter Grove

Brentwood Lettings are pleased to offer this spacious 2 bedroom property to rent in the popular area…

Price: £ 550.00 pcm

Rowley Street

Brentwood Lettings are pleased to offer this 2 bedroom end terrace property to rent in Ashton-under-Lyne. The…

Price: £ 525.00 pcm
Featured

Abbey Hey Lane

** Stunning 4 Bedroom Family Home** Brentwood Lettings are pleased to present this NEWLY REFURBISHED 4 bedroom…

Price: £ 825.00 pcm

Holgate Street

Brentwood Lettings are pleased to offer this 2 bedroom property to rent in Great Harwood.Ideally located close…

Price: £ 450.00 pcm

Property Management

We manage properties throughout Manchester for investors all over the world. Contact us to talk about your property

Lettings

We provide a let only service for those landlords who wish to self manage their properties

Maintenance

We provide a full range of maintenance services, from safety inspections and repairs right up to full refurbishments

Local Property Experts

We know North Manchester like the back of our hands, chat with us for all the latest news and trends in the area

Investor Tips

Being your people on the ground, we find out about the hottest and most lucrative of local investment opportunities first hand.

Advice & Support

We are available to talk about the Local Property Market and your individual properties whenever suits you, book a call with us today