Following recent measures to increase taxes on buy-to-let investors, Fergus and Judith Wilson plan to exit the business. Britain's most iconic investors in this segment will sell their entire inventory of homes to a group of foreign investors that include both institutions and wealthy individuals.
The deal for the Wilsons's 900 houses is for £250m (€344.6m, $379.3m). The homes come with sitting tenants.
A popular method used by owners of multiple properties to avoid the full impact of the income tax changes is to hold them in limited companies, according to The Telegraph. However, the Wilson couple never chose this structure.
Consequently, they are liable not only to pay the regular taxes but also capital gains tax at 28% on profits arising from a rise in the value of their properties. This will leave them owing millions of pounds to HM Revenue and Customs.
Wilson, who described this segment as a "national hobby" that "simply got out of control", opined that the buy-to-let boom was "definitely slowing down".
"It's been a fantastic time for buy-to-let landlords because the market has been unregulated. But now they're bringing in all these measures to try and make some money. Landlords are an easy target for a tax grab," he said.
This is not the Wilsons's first sale. In June, they sold a first batch of 50 properties in Ashford, Kent, to Chinese investors for an average of £250,000. In April 2014, Wilson estimated the value of the properties he bought in 1995 had gone up by about 350%.
Recent Tax Measures
In an effort to address "unfairnesses in property taxation", Chancellor George Osborne during his Summer Budget had announced that landlords would no longer be allowed to deduct the cost of their mortgage interest from their rental income. The rules are to be phased out between 2017 and 2020. To add to the woes of the landlords, Osborne in the recent Autumn Statement announced plans to introduce additional stamp duty from April for buy-to-let investors.
Naomi Heaton, CEO at investment firm London Central Portfolio, said Osborne's buy-to-let tax measures were "poorly thought out as they hit small British investors harder than large foreign buyers".
"Falling house prices in many regions of the country have forced a lot of investors to remain in the market, but this year house prices have bounced back a bit. This will be just what they have been waiting for and now may feel like a good moment to sell," she added.