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drbubb

The Pin !?

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... from the It's Nearly Over thread on HPC ...

 

Fergus...a cheque 5 days late does not lead to final warning letter.

Oh Dear.:ph34r:

 

FEAR !

 

Could the collapse of the Wilson's be a classic pin going into the Dead Cat bubble?

 

The banks wont like this. It points out the huge risks imbedded in all those BTL empires that they happily financed for so many years. If the Wilsons go down, will banks still be willing to lend even 70% to BTL speculators? I have been saying for a long time, that BTL loans are head to a maximum of 65%, 60%, or less. In a world where interest rates are rising again, and such days WILL come back, even 65% may be too much.

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THE CHEQUE is "in the mail". Sure, Fergus !

 

The Daily Mail has learned the couple are up to £350,000 in arrears on their monthly mortgage payments with one lender.

Mortgage Express, owned by Bradford & Bingley, has sent a final warning letter to the couple, who are believed to have 177 of their properties mortgaged with the bank.

 

The letter means the Wilsons must find the money quickly or risk a large chunk of their Kent-based property empire being seized.

 

Racehorse fanatic Mr Wilson, 61, says he is an innocent victim of the postal strike.

Unusually, he pays his mortgage by cheque - and says the money has been delayed in the post.

He insisted recently: 'We are not a penny behind on our loan payments.'

 

Read more: http://www.dailymail.co.uk/news/article-12...l#ixzz0WotoCYNR

 

Link to SP thread:

http://www.singingpig.co.uk/forums/thread/924823.aspx

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THE CHEQUE is "in the mail". Sure, Fergus !

 

The Daily Mail has learned the couple are up to £350,000 in arrears on their monthly mortgage payments with one lender.

Mortgage Express, owned by Bradford & Bingley, has sent a final warning letter to the couple, who are believed to have 177 of their properties mortgaged with the bank.

 

The letter means the Wilsons must find the money quickly or risk a large chunk of their Kent-based property empire being seized.

 

Racehorse fanatic Mr Wilson, 61, says he is an innocent victim of the postal strike.

Unusually, he pays his mortgage by cheque - and says the money has been delayed in the post.

He insisted recently: 'We are not a penny behind on our loan payments.'

 

Read more: http://www.dailymail.co.uk/news/article-12...l#ixzz0WotoCYNR

 

Link to SP thread:

http://www.singingpig.co.uk/forums/thread/924823.aspx

 

 

Well, there have been a couple of one-day postal strikes. But I find it difficult to believe that he pays his mortgage by cheque! It's almost unheard of these days.

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Isn`t it just easier to give three couples a 100k loan each to buy a terrace, than to give one couple a 300k liar loan to buy a terrace? It just means less BTL, more sensible lending to "ordinary" people?

 

I think the banks fear people just saying "oh no, property doesn`t always go up, I`m staying out this year" that would wreck the banks if people become debt averse AND existing borrowers start to default?

 

Exactly.

Within 2-3 years, the banks will be praying that some tenants will be willing to buy some of the many properties in foreclosure

 

Look to the US for the future of UK property

 

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... from the It's Nearly Over thread on HPC ...

 

 

 

FEAR !

 

Could the collapse of the Wilson's be a classic pin going into the Dead Cat bubble?

 

The banks wont like this. It points out the huge risks imbedded in all those BTL empires that they happily financed for so many years. If the Wilsons go down, will banks still be willing to lend even 70% to BTL speculators? I have been saying for a long time, that BTL loans are head to a maximum of 65%, 60%, or less. In a world where interest rates are rising again, and such days WILL come back, even 65% may be too much.

 

 

Perhaps the Wilson's could get a goverment bail out as thry are too big to fail.

 

:lol::lol:

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Perhaps the Wilson's could get a goverment bail out as thry are too big to fail.

:lol::lol:

 

Welcome RDW.

But actually, they are just the right size to fail, and teach a lesson to their reckless lenders

 

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Welcome RDW.

But actually, they are just the right size to fail, and teach a lesson to their reckless lenders

 

Thank you,

 

If they do go under that amount of properties, +700 I believe, should certainly get the Ashford property market moving, but I can't really see the banks dumping all the properties onto the market in one go as they are hardly going to be able to chase the mortgagees for the shortfall.

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I've been reading Judith Wilson’s simple guide to property investment:

 

1. "Never use your own money".

A golden rule for product development. I fear that for speculative investment the rule is rather 'never risk your own money for any longer than is necessary'. That, however, is much more difficult. Time will tell.

 

2. "There is never a wrong time to buy property".

There have been numerous wrong times to buy property

 

3. "Judith looks to buy houses that people will want to rent, and will increase in capital value".

Of course. And I only buy stocks that have a good dividend and will appreciate in value. Doesn't always work out that way, though.

 

I'm reminded of the expression 'in bull markets everyone is a genius'.

 

It is likely that her rules reflect the mindset of most recent property investors. The Wilsons getting into trouble could well change that general mindset:

1. You might use someone else's money - but they are clever enough to make sure the risk lies with you

2. You really don't want to buy property at the wrong time

3. Buy a house to live in, and be prepared for a possible loss in value.

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Paying a regularly recurring transaction by cheque ? Fair enough the amount will vary to some extent ; but in 2009 a lender not requiring electronic transfer of funds ??

 

Hmmm. I think they're in more difficulty than they'd care to admit to.

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I've been reading Judith Wilson’s simple guide to property investment:

 

1. "Never use your own money".

A golden rule for product development. I fear that for speculative investment the rule is rather 'never risk your own money for any longer than is necessary'. That, however, is much more difficult. Time will tell.

 

2. "There is never a wrong time to buy property".

There have been numerous wrong times to buy property

 

3. "Judith looks to buy houses that people will want to rent, and will increase in capital value".

Of course. And I only buy stocks that have a good dividend and will appreciate in value. Doesn't always work out that way, though.

 

I'm reminded of the expression 'in bull markets everyone is a genius'.

 

It is likely that her rules reflect the mindset of most recent property investors. The Wilsons getting into trouble could well change that general mindset:

1. You might use someone else's money - but they are clever enough to make sure the risk lies with you

2. You really don't want to buy property at the wrong time

3. Buy a house to live in, and be prepared for a possible loss in value.

Good first post! Welcome to GEI.

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Perhaps the Wilson's could get a goverment bail out as thry are too big to fail.

 

:lol::lol:

:lol:

That's what I was going to suggest.

 

The signs are that they are in trouble and have not found some Middle Eastern or East European buyer.

 

Their failure may provide a big public sign that the dead cat bounce is over.

 

Welcome to GEI by the way.

 

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Looks like the first sign of the coming BTL tsunami.

 

I find many markets difficult to fathom but not the UK property market.

Most of what has happened so far seemed predictable as does the coming crash.

Maybe it's just a market that I haven't got a balanced view on but I see much trouble ahead.

 

 

 

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Another new poster. Welcome, dgul

 

I've been reading Judith Wilson’s simple guide to property investment:

 

1. "Never use your own money".

A golden rule for product development. I fear that for speculative investment the rule is rather 'never risk your own money for any longer than is necessary'. That, however, is much more difficult. Time will tell.

 

"Your own money"?

 

Unless it is non-recourse, money that is borrowed must be paid back.

 

Mortgage lending in the US is non-recourse, but not in the UK.

 

If th Wilsons fail to pay their debts, they are likely to see all their assets tied in with the bank loans collapsed.

What the market will be watching isnt whatever residual equity they may be able to protect, but the great

mass of those property assets. If they move into foreclosure, quite a fee dominoes will go down all at once.

 

This golden rule is sheer nonsense for them, and the banks that lent to them should have seen it as a great

reason for caution

 

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... from the HPC thread ...

 

As far as I could work out the Wilson's plan to make money was through the value of the houses increasing over time. They took out 85% fixed rate interest only mortgages and the rent was used to service the mortgage. When the value of the house increased, they remortgaged to free up some cash to put down a deposit on another house etc. etc. Essentially they were breaking even on the mortgages/rent, the big money would come when they sold all 700 houses, which according to the plan would be worth a lot more than they paid for them.

However if they followed this model they would have to plan their exit strategy very carefully. There would have to come a point when they stopped buying houses and then allow a dwell period of several years whilst their houses increased in value, before they sold them very carefully so as not to crash the market. Due to them remortgaging to free up capital for further aquisitions, all of the increase in equity of all their properties up to that date had already gone.

 

As far as I can see, the Wilson's haven't had a dwell period of several years when they've stopped buying houses whilst house prices have been rising. i.e. they may not have bought many houses since 2007 but house prices haven't risen substantially since then either, we've not seen the 10% year on year that had been common place for the last decade.

 

At best if they managed to sell them all they might be able to get the 15% equity that was left in each house, if there is still 15% left.

 

The banks were so, so reckless - lending 85%.

It might have been just barely justifiable if they had been normal, 15-20 year amortizing loans, so the loans of 5 years ago, for instance,

might have had another 20% paid off. But with interest only, that isnt happening

 

When you have a distress seller, a 15% margin is very easily wiped out

 

When you have a distressed seller of 700 homes in the same are, Forgeddabotit !

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I've been reading Judith Wilson’s simple guide to property investment:

 

1. "Never use your own money".

A golden rule for product development. I fear that for speculative investment the rule is rather 'never risk your own money for any longer than is necessary'. That, however, is much more difficult. Time will tell.

 

2. "There is never a wrong time to buy property".

There have been numerous wrong times to buy property

 

3. "Judith looks to buy houses that people will want to rent, and will increase in capital value".

Of course. And I only buy stocks that have a good dividend and will appreciate in value. Doesn't always work out that way, though.

 

I'm reminded of the expression 'in bull markets everyone is a genius'.

 

It is likely that her rules reflect the mindset of most recent property investors. The Wilsons getting into trouble could well change that general mindset:

1. You might use someone else's money - but they are clever enough to make sure the risk lies with you

2. You really don't want to buy property at the wrong time

3. Buy a house to live in, and be prepared for a possible loss in value.

 

 

Welcome to GEI.

 

 

Well observed. It will be interesting to see what develops with the Wilsons. Considering that just about everything possible is being done to prop-up the housing bubble, I would think that such a high profile 'landlord' will not be allowed to fail - the publicity would be catastrophic.

 

Anyone for a cover-up?

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Welcome to GEI.

 

 

Well observed. It will be interesting to see what develops with the Wilsons. Considering that just about everything possible is being done to prop-up the housing bubble, I would think that such a high profile 'landlord' will not be allowed to fail - the publicity would be catastrophic.

 

Anyone for a cover-up?

It would not surprise me at all if some dodgy deal was done to prop these guys up. :angry:

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GF, Bubb, Schaublin - Thanks for the warm welcome. It is very much appreciated.

 

It would not surprise me at all if some dodgy deal was done to prop these guys up. :angry:

 

I get the feeling that the time for bailouts has passed. Anyway, the Wilsons fit in the too-big-to-get-away-with-it-without-the-press-noticing, too-smiall-to-care category. If they get a noticable bailout from gov all failing BTLs will want a slice of the action - and will get upset if they don't get it - while the financial industry really doesn't care much for their poor relatives in BTL.

 

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It would not surprise me at all if some dodgy deal was done to prop these guys up. :angry:

 

as the saying goes.... it seems the bank may have a problem

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as the saying goes.... it seems the bank may have a problem

 

Not really the banks problem as the govermint will just bail them out - it will be more 'our' problem as this will surely devalue the GBP?

 

If they let them fail, then we might have a fighting chance.

 

An economics lecturer once posed the statement:

 

If you owe the bank £1000, then you have a problem (to pay them back).

If you owe the bank £100,000,000,000, then the bank has a problem (if you don't pay them back).

 

This has been changed by me to reflect the real world:

If you 'too big to fail' owe the bank £100,000,000,000, then the bank taxpayer has a problem (regardless if the banks/btl muppets/etc don't pay them back).

 

 

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i thought they had sold

 

There have been at least two articles about how they were intending to sell off a chunk or all of their properties to an "international investor".. Each time Fergus claims there are Russians, Saudis, Martians or whoever just about to bite his hand off, each time nothing seems to happen.

 

The figures have been looking dodgy for them for a while, hard to get to the bottom of it as Fergus's claims about their wealth vary. I don't like to wish ill on anyone but in their case I'd make an exception as I think the way they have cornered the local market is a disgrace and a classic example of the problem of banks preferring to lend to pwoperdee investors rather than to genuine homebuyers.

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...If they get a noticable bailout from gov all failing BTLs will want a slice of the action - and will get upset if they don't get it - while the financial industry really doesn't care much for their poor relatives in BTL.

 

Agreed.

There's a huge moral hazzard issue if the Wilsons get bailed out.

They might get a loan restructuring, but the banks should take most of the equity if they do that

 

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Agreed.

There's a huge moral hazzard issue if the Wilsons get bailed out.

They might get a loan restructuring, but the banks should take most of the equity if they do that

 

I'm not sure there's a lot of equity there. Their own valuations of their wealth tend to rely on estimates of the property's value that are transparently exaggerated, even before you take into account the problems of all this property being concentrated in one area.

 

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The Wilsons for property in Ashford and Maidstone = the Hunt brothers for silver in 1980.

 

Err were not the Hunt's rather successful in their venture !! No sign of Kent County Council complaining to the OFT that some gamblers called the Wilsons had cornered a little section of the so called garden of England

 

I have said before the (IMO) UK banks need to be honest about their property losses before we get the next deflationary downswing over here - at least as far as the property market goes. Maybe that time is getting closer. LLoyds HBOS has a big say here.

 

Ashford property went shooting up with the Eurostar connection. I guess the local estate agents did the job for the vendors in that respect (for once)!

--------------------------

& Welcome to the GEI newbies

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