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.

June Auctions – 12 Sledmere Close, Beswick.

tips

 

This property is excellent, im expecting it to fetch upto £80k, but even then a 3 bedroom semi in Beswick is expected to fetch around £575/m which gives a healthy yield of over 8.5%.

Beswick is becoming one of the hottest and most sought after areas in Manchester for investment property. With the developments at Sport City, the direct metrolink access and the proximity to the city centre, what was once a no-go area is quickly becoming -the- place to live and rent.

Rental properties in Beswick do not remain empty for long and this property, next week, is likely to be one that is popular amongst investors. I may even bid on this myself.

If you are looking to invest in Beswick or anywhere in East & North Manchester  and would like any assistance, then please drop in to my offices on Moston Lane, Manchester for coffee and a chat, or call me on 0161 681 3724.
Look forward to speaking to you soon!
 
Regards 
 
Mike Brown

How To Buy At Auction

Property auctions are a fantastic source of low cost houses, flats, shops, commercial premises or land. Finding the right property, at the right price, in the right location can be a very daunting prospect for many potential investors.

Property auctions are now more popular than ever, and due to this the prices of properties being sold through auction are being driven up. With such a substantial capital requirement, most investors like to take their time and not be rushed into a deal, and the pressure of an auction bidding scenario for property is completely avoided.

auctionMany frequent property investors will tell you that that despite the pressure and emotional stress that can accompany a property auction, some of the most useful information and best deals can be obtained by paying careful attention and attending an auction with a careful strategy devoid of emotion and panic.

So what is a good strategy to employ in order to get the most out of a property auction experience?

What to Plan for at Auction?

Preparation is crucial when you are entering a potential bidding war with other investors for property at an auction. Ideally, every decision regarding the property should be made before the item is called on the roster so that you can focus purely on the value of the item when called.  Auction listings are available in many cases weeks before the day the gavel is set to drop, so make use of time to inspect the property and make sure it’s the right investment for you.

Take the time to look at the property and arrange an internal viewing if possible to evaluate what you would be willing to spend to acquire the property. Speak to neighbours around the home and try discover as much as you possibly can about the property and the area. Make sure that the listing details in the auction catalogue are correct and in line with what your research tells you, if not you may have more unforeseen problems. Make sure that you are able to purchase the property in line with the conditions stipulated on the auction listing. Find out what similar properties are selling for in the area so that you don’t get sucked into an expensive impulse purchase and if you are serious, have the inspections done by professionals.

Finance will need to be arranged before and auction as the final bid and sale is a negotiation agreed upon and is binding to both parties. Finance will be needed with most houses bought on auction so ensure that you have enough organised immediately so that you are able to make the deposit should you win the bid.

Does it have to be me?

If you feel you cannot be trusted in a high pressure situation, you can arrange for a professional or use an impartial family member to do the bidding for you. Make clear stipulations as to what you are prepared to spend and should you be doing the bidding yourself, adhere to the same principles. Stick to your pre-decided goals and enjoy a safe auction with only a positive outcome possible.

If you are looking to would like any assistance or further guidance, then please drop in to my offices on Moston Lane, Manchester for coffee and a chat, or call me on 0161 681 3724.
Look forward to speaking to you soon!
 
Regards 
 
Mike Brown

 

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