'First Chinese, now Americans – they all want my £250m buy-to-let empire in Kent'
09-27-2014
Buy-to-let 'king and queen' Fergus and Judith Wilson claim demand for their 900-property empire is surging (as is the £250m price tag)
Fergus Wilson, 65, who is 453rd in the Sunday Times Rich list and whose empire includes nearly 1,000 properties
Photo: SWNS.COM
By Richard Dyson
Controversial teachers turned landlords Fergus and Judith Wilson say the demand from buyers for their Kent-based buy-to-let empire is rocketing.
And most of the potential buyers are from overseas, Mr Wilson said – while interest from UK investors such as pension funds has fallen away.
The portfolio consists approximately 900 tenanted houses in and around Ashford, Kent, valued at between £275,000 and £300,000.
Following reports that Chinese bidders had emerged in recent days and were "queuing" to buy, Fergus Wilson told the Telegraph that they were "far from" the only parties apparently casting an eye over his vast portfolio of homes.
"This morning we have had interest from investors in America," he said today. "Yes, there were three expressions of interest from China over the weekend. But I would hardly say that makes a 'queue'. I always try to be very straight. The fact is we have had interest from Russia, Japan, Dubai, Kuwait, Germany, the US and Canada."
Outspoken Mr Wilson, regarded as a maverick by other professional property investors, is also becoming firmer in his expectations of price.
He wants a one-off sale and says £250m is the price – and he that he expects any successful bidder to move swiftly. "All the buyers we are talking to have that sort of money readily available," he said.
What does Mr and Mrs Wilson's buy-to-let portfolio consist of?
The Wilsons have been coy about citing the precise number of properties they own and let, with published numbers varying between 900 and 1,200. Almost all the properties are family homes of two and three bedrooms constructed within the last 20 years.
The average price is between £250,000 and £300,000, Mr Wilson said, suggesting the portfolio numbers about 900. Most are let to professionals.
Mr Wilson sparked controversy in 2013 by saying he would no longer take tenants in receipt of housing benefit.
And the returns?
Thanks to rising house prices, especially in the south and around London, rental returns are dropping.
Mr Fergus said on Tuesday that an average £300,000 property in portfolio would command monthly rent of £1,400, giving a gross annual yield – that's the return on investment before the costs of mortgages, maintenance and so on – of just under 6pc.
On a £250m portfolio that would mean annual income before costs and tax of £14.5m.
"Yields are falling of course as the prices are going up," Mr Wilson said.
But he reckons investors will also be counting on capital gains in the form of future price rises. He believes a chronic housing shortage will drive values up "for years to come".
The reason he and his wife Judith are selling, he says, is because of their age and "need to retire".
Scottish referendum played a part in deterring UK buyers, Wilson claims
"When we first made the portfolio available for sale there was a lot of interest from pension fund buyers," he said. "Houses are very attractive to pensions. But the interest has dried up and I put that own to the Scottish referendum. A lot of pension firms are run in Scotland. They went on strike, so to speak, until the announcement was made."
How did this couple build their vast property wealth?
Fergus and Judith started buy-to-let investing in the 1990s but went into overdrive in the early 2000s, famously buying "a property per day". Their model was to buy, then remortgage and release equity as the prices rose, and then buy again.
More detail about their rise to uber-landlord status can be found here.
How much will the Wilson's get to keep?
Two factors are in play: the size of the Wilson's remaining mortgage and their tax bill. Fergus has previously indicated a mortgage of around 50pc on the portfolio.
If so, that would leave £125m. He has previously told The Telegraph he would face a "huge" tax liability, presumably referring to the capital gains made by the increase in the properties' value during their ownership.
If half of the £125m was a taxable gain – ie, if the properties had roughly doubled in price while they owned them – the taxman would want around £25m, leaving them with a fortune in the bank of about £100m.