The now quite famous former maths teachers, Fergus and Judith Wilson, owners of a 700 buy-to-let property portfolio, are selling up. They say that now is a good time to sell up – in reality I am sure they would have rather sold 18 months ago when their portfolio was worth 20% more!
So why are they selling? The main reason given is they really think the longer term prospects for properties is not good, and in particular flats which they say will do far less well compared with smaller houses. They do not say how many flats are in their portfolio, maybe this could be the reason?
But another reason could be that the couple are both in their 60s and the work involved in managing such a large portfolio is not what they want as they move into the “retirement years”. An example of the way in which their property management consumes their time is a recent situation where they were reported to have taken a tenant to court for a broken cistern lid, demanding £3,000 for a new bathroom suite as they said they could not get a replacement cistern lid of matching colour. It is reported they lost their court case, the question is why take the tenant to court for this in the first instance?
Anyway, back to is it a good time to sell property. We believe the real reason for selling is the expected future capital gains from the portfolio are less favourable than other investments. It is not that they do not see a future profit in their properties, but more likely they see a bigger profit from an alternative investment.
As an investor buying today, there are growth prospects in future property prices, but no one is forecasting spectacular growth, more of a steady recovery over many years. If you are buying a property as a home this is great, but maybe as an investor in residential property you really need to focus on the long term. So back to the headline of this article, as an investor, now could be a good time to sell IF you have an alternative investment for your money that will provide a better return.
