Five years ago, Charles and Iona Cole led an extravagant life that many of us cou;d only dream about. Their home was a Â£2.25 million manor house in the heart of Devon set in 214 acres, with matching luxury cars on the long and windy driveway, not to mention the 84 buy to let properties that made up his portfolio that they owned in the area of Yorkshire.
With their four children Elizabeth, May, Charity and Hedley who at the time were thriving at their individual distinguished public schools, life for the family was very good.
However today things are looking different for the family, the Coles are facing the very real prospect of losing everything that they have worked hard for. If they are not able to pay a Â£5 million debt by April, the bank have pre warned them that their home, business and even their many antiques will be taken hold of and sold off. The trouble with this is that Charles says that he is virtually penniless.
Times are very difficult for the family with the children not receiving Christmas presents this year, clothing for the family is being sourced from charity shops, and Iona is having to root out all the best bargains and special offers at the supermarket to feed her family and supplementing it with vegetables grown in their garden.
This is exactly the economy measures that many families are having to face in this economic climate with them cutting back on household spending.
How did all go wrong you ask? It is a story that involves the running costs of an old family manor house, the rising concern of school fees and an unfortunate bid to join the overseas property market which promised to help the familys financial woes for good.
What makes the familys story so poignant is that while Charles was born into an old land owning family, he did not inherit large sums, but instead build up a property business from a modest beginning, which had enabled him to buy back the manor that had once been the family seat. It was a dream come true to have the old family home back for me to bring up my family.
The Coles rented out their land to farmers and in the year 2000 Charles was able to buy his first buy-to-let property in Yorkshire. Over the next couple of years, as house prices rose and mortgages were easy to obtain, Charles built up his portfolio. By 2003, he owned 84 houses in Barnsley, returning a vast profit which meant that they had a lavish income of Â£250,000 a year and could afford to send the children to top public schools. By 2007 school fees had risen to Â£100,000 a year and we needed to be earning Â£150,000 just to pay them.
Charles says he cannot sell his manor house or his buy-to-let properties, if they could it might cover the debt but then he would be liable for capital gains tax which would in turn bankrupt him. House prices have gone down and I have been told that if I was to sell my portfolio I might be lucky to clear Â£1.5 million which would mean even more capital gains.
With fees added I just will not be able to clear the Â£5 million loan explains Charles, whose interest only payment on his loan is Â£12,500 per month, he is also not very keen on selling the descriptions of the house that have been in his family for hundreds of years much of it would barely pay the solicitors bill.
Fiona Davies is a director at The Property Fairy.
She has worked in the land and property sector for the last ten years.
All articles on the website are written uniquely by her.
This article is copyright free.