Britain’s biggest landlord has sold around half of his buy-to-let portfolio in the past year, claiming that the age of the amateur landlord is coming to its end.
The Financial Times reports that Fergus Wilson and his wife Judith, who are both former maths teachers, have sold about 400 of their 900 buy-to-let properties in Kent, with most sold to overseas buyers and around 50 to their tenants.
When the buy-to-let mortgage launched in the mid-1990s, the Wilsons were able to expand their portfolio, as high loan-to-value (LTV), interest-only loans were incredibly easy to acquire.
Britain’s Biggest Landlord Sells Half of His Buy-to-Let Portfolio
However, the notorious property investor believes the age of the amateur landlord is “over”, as lending criteria has become tougher.
“If you were an amateur landlord in those days, as long as you could spell your name, you would get a mortgage,” he explains. “No one appeared to check anything. I wouldn’t say it is impossible, but it is much tougher. Some [banks] are offering LTV of only 60%.”
He adds: “Is it the wrong time to be an amateur landlord? Yes. Some people will succeed, but on the whole, too many amateurs walk into pitfalls… The day of the amateur landlord is over.”
Over the past few months, a number of banks have tightened their buy-to-let lending criteria.
OneSavings Bank, for example, has put its focus on professional buy-to-let investors following the Brexit vote, as they are “better positioned to withstand market volatility”. The Kent-based bank has also tightened conditions for smaller landlords.
Ray Boulger, of mortgage broker John Charcol, agrees that it has become much harder for amateur landlords to operate, following changes to the tax system and regulations.
He comments: “For lower yielding parts of the country with higher prices, like London and the South East, it will become impossible to get a high LTV mortgage, unless properties are put into a limited company. LTV will be limited to about 55-60%. New landlords will have to save a bigger deposit.”
Mr. Wilson, 68, who announced his plans to sell his £250m buy-to-let portfolio in 2015, says he is still waiting for a number of sales to complete.
Last year, he revealed that he needed to repay around £45m to 14 lenders, but he hopes to emerge with a £200m profit.
Wilson believes that June’s Brexit vote will ultimately boost the selling process: “I think foreign buyers are saying at the moment that Brexit helps, as it is cheaper [to buy UK property] in their money [following the fall in sterling]. Many are trophy hunters – they want to impress their friends with a photo of the house they own in Britain.”
Additionally, he claims that UK house prices will be supported by the shortage of housing in the long term: “All the time there is a shortage of houses, the prices will continue to go up. It is impossible for the developers to deliver the number of houses required for the next 15 years.”
However, the latest official house price figures show that the property market has cooled over recent months: /property-market-cools-wont-crash-claim-experts/