Hard Times at the Manor House: Family who led privileged life are now £5m in debt. Who said the upper crust were recession-proof?Five years ago, Charles and Iona Cole led a gilded life that most people could only dream of. Home was a £2.25 million Devon manor house set in 214 acres, with his and hers luxury cars on the sweeping driveway, not to mention the portfolio of 84 buy-to-let properties they owned in Yorkshire.
With their four children — Hedley, Elizabeth, May and Charity — thriving at prestigious public schools, life was good. Very good.
Today, however, the Coles face the very real prospect of losing everything. If they cannot pay back a £5 million debt by April, the bank has warned them their home, business and even their furniture will be seized and sold off. The trouble is, Charles says he’s ‘virtually penniless’.
There were no presents at Christmas. Clothes come from charity shops, and Iona bargain-hunts for the best supermarket special offers to feed her family, supplemented by vegetables grown in the garden.
In other words, the sort of economy measures that many families have had to face, with the current squeeze on household spending.
But the Coles are a far from typical family. And while their plight may elicit little sympathy in the wider world (at one point Charles says it is fortunate their home has inglenook fireplaces in every room, so they can heat it using trees from the estate) the story of their descent into a financial quagmire is a vivid illustration of how precarious even the most comfortable of existences can be.
So how did it all go so wrong? It is a story that involves the costs of running an old family seat, the rising burden of school fees — and a doomed bid to join an overseas property scheme which promised to solve the family’s financial worries for good.
What makes the family’s plight more poignant is that while Charles, 46, was born into an old land-owning family, he did not inherit huge riches, but instead built up a formidable property business from a relatively modest beginning, which enabled him to buy back the manor house that had once been the family seat.
He and Iona had started married life in a dilapidated old house given to them by Charles’s father, a farmer and land-owner in Oxfordshire. Charles says: ‘Iona and I did up the house and barns he’d left me before his death, and in 1996 we sold them to a developer and made £600,000 profit.’
Two years later. a Devon manor house — which had been in the family until World War II — came on the market and Charles and Iona snapped it up mortgage-free for £580,000.
‘It was a dream come true to have got back the old family home,’ says Charles. ‘And it was an idyllic place to bring up our four children.’
The Coles rented out their land to farmers, and in 2000 Charles bought his first buy-to-let property — a terrace house in Barnsley, Yorkshire. Over the next few years, as house prices rose and mortgages were easy to come by, Charles built up his portfolio.
By 2003, he owned 84 houses in Barnsley, returning a profit which meant he and Iona, now 39, had a generous income of £250,000 a year and could afford to send their children to top public schools.
Their son, Hedley, went to Milton Abbey in Dorset, while daughters Elizabeth and May boarded at Sherborne School for Girls, also in Dorset.
At first the school fees were manageable, but by 2007 they had risen to £100,000 a year. And despite earning such a large income from his properties, renting out land, and later selling some of the rental properties, Charles began to feel the financial pinch.
‘To pay the school fees we had to earn £150,000 a year before tax. By the time we’d paid expenses and fees to manage our properties, we were left with around £35,000 to live on.
‘That may seem a lot to some people, but with the expense of running such a big, old house, it wasn’t enough.’
To make matters worse, by 2006, with their fourth child, Charity, about to start at prep school, Charles and Iona began worrying about having to pay a fourth set of school fees.
It was then, either through blind faith, greed or desperation, that Charles made a big mistake.
He heard about a property investment opportunity in Romania through a local estate agent — an investment which promised to make him tens of millions of pounds.
‘Romania had left the Eastern bloc, and this was a scheme to develop land around Bucharest,’ he says. ‘The idea was to create a beautiful suburb for professionals working in Bucharest so they could commute into the city.
‘The scheme was being promoted by top lawyers and land agents,’ he explains. ‘People may think I was motivated by greed, and of course it would have been wonderful if I’d made as much money as I was promised, but ultimately it would have been fine if I’d made just £100,000, because that would have paid a year’s school fees.’
In 2007, after several visits to Romania — and despite Iona’s concerns about the project — Charles decided to go ahead, taking out an initial loan of £3.3 million against the family home and his buy-to-let business.
It is a gamble he bitterly regrets: ‘I was talked into making the investment. I had no understanding there was any big risk: I was very naive.
‘I believed it when I was told there was no risk. In fact, the only risk I thought I faced was not making as much money as I’d hoped. I’m not a gambling man, and I would never have put my family’s future in jeopardy.’
The Coles were promised that planning permission would be granted on the land within 18 months, and that within two years a desirable new suburb would have been built. In fact, no building work ever took place.
‘We began to get nervous when planning permission was delayed,’ Charles says. ‘It turned out the land I’d invested millions of pounds in was never going to be developed. It was worthless, and I feel an utter idiot.’
Interest of around £1.5 million has taken the initial loan to nearly £5 million, and it is due to be repaid in full in April. Of course, many people, struggling to keep a roof over their family’s heads in much more straitened circumstances, won’t shed any tears for the Coles’ predicament.
After all, it’s hard to believe that anyone, given the state of the world economy, would choose to invest money — and so much of it — in a scheme they didn’t fully understand.
But even so, that doesn’t diminish the difficulty for any father of having to sit down and tell his children they have to leave their beloved schools because he can no longer afford the fees, as Charles had to last year.
‘I could see they were devastated,’ he says. ‘I felt hugely guilty, as if I were ruining their lives. I should be the provider, yet I was taking everything away. The children never blamed me, but I felt it was all my fault.’
The change in schools couldn’t have come at a worse time for the children. Elizabeth, 17, was in the middle of A-levels and May, 15, was about to begin her GCSEs. Charity, who’s 11, was looking forward to following her sisters to boarding school.
Hedley, now 19, had just left school — but his plans to go to university have had to be put on hold.
‘Fortunately Charity’s prep school is allowing her to finish the year, but instead of going on to boarding school, she will join her sisters at home. The older girls’ schools couldn’t allow them to stay on.’
Rather than going to the local comprehensive school, however, the girls are being home educated with Elizabeth and May studying via an online tutoring website. May, who was planning to take 12 GCSEs at school, is now taking only five.
‘I’d rather have them at home and teach them the traditional values and good manners I was brought up with, than see those eroded,’ says Charles.
He admits to being ‘one of the last breed of Englishmen fast dying out’, and that to many people struggling on lesser incomes, the change in his fortunes might not look as grim as it does to him.
‘I have been fortunate to live in a bubble and avoid the “real world” for the past 46 years. I realise most people manage on much less, but we worked hard for what we had, and we never felt rich.
'We’re not the sort of people who go on exotic holidays or splash out on designer clothes, but with a £250,000 income from our assets, we were able to give our children the top public school education we wanted for them.’
In an attempt to retrieve the money he has lost, Charles is pursuing a legal case for compensation.
‘We are sure there must have been some sort of fraud because my money has just disappeared,’ he says. Needless to say, his bank is unwilling to wait for the outcome of any investigations.
‘They have been heartless,’ Charles says. ‘We have never defaulted on a payment or paid a bill late. They would rather see us out on the street than give us more time to seek compensation.’
Charles says he can’t sell his home or his buy-to-let properties: doing so might cover the debt, but he would become liable for capital gains tax — which would bankrupt him.
‘House prices have gone down, and I’ve been advised that if I sold my portfolio I might be lucky to clear £1.5 million. Then I’d have almost £500,000 to pay in capital gains on that portfolio alone.
‘With fees added, I wouldn’t be able to clear the £5 million loan,’ explains Charles, whose interest-only payment on the loan is £12,500 per month. Nor is he keen to sell any of the contents of his house: ‘The furniture the bank wants to seize — much of it would barely pay a solicitor’s bill but having been with us for generations, it is priceless in its sentimental value.
‘Ironically until we are literally out on the street, we are not entitled to any benefits. We’ve thought of taking in lodgers to help pay the bills. But because our house is so remote — we are miles from the nearest shop — we’re not that attractive to lodgers, so I don’t think it would work. And also while we are going through this we couldn’t cope with anyone in the house.’
As for seeking a job — any job — Charles says he’s not qualified to work in another field. ‘I left school at 15 with three O-levels, and I have no experience in anything other than farming. Iona is a housewife who has never worked outside the home — and she has her hands full helping to educate the children.
‘We were always a close family, but I worry about the long-term effects of being together 24/7. The girls feel imprisoned. We are so remote here that they have no interaction with friends, which teenagers need.
‘We are living under such tremendous pressure I fear what the long-term consequences could be. I am worried about losing my place in the world and am deeply worried that my children have lost their place in society.
‘I feel like a man castrated — unable to do what I should for my family. My naivety has destroyed the plans I had for my children. I can’t find the words to describe the agony — to not sleep night after night and to live under the threat of seeing one’s hopes and dreams dying before one’s eyes. To live under the threat of losing a home with a millennium of family history attached to it . . .’
Iona is similarly distraught: ‘The situation’s become so desperate I’ve even thought about selling our black Labrador, Inca. After all, I think, he would be one less mouth to feed — but that would break my heart.
‘Money is so tight that bargain-hunting for value deals at the supermarket is a necessity. I make the most of every deal on offer and we try to keep up traditions such as a Sunday roast. But we haven’t eaten lamb, which is Charles’s favourite, for months because it’s too expensive. Instead, we might eat a cheap saver joint of pork.
‘It’s been a terrible strain between us — the worst thing is not knowing what the future holds.’
Despite the family’s dire circumstances, Iona doesn’t feel angry with her husband.
‘I was incredibly shocked when Charles told me what had happened, and was horrified by the amounts of money involved.
‘But we’re a traditional couple: I have always left the providing to Charles and he has never not provided. I know he was only doing what he believed was the very best for us as a family.
‘We married for richer, for poorer, and you don’t fall out of love with someone just because you go through difficult times. We’re just going to have to get through this together.’
The family simply do not know what their future may hold. Whatever his mistakes along the way, the burden of responsibility for Charles is a heavy one.
As he puts it: ‘I can’t believe we are on the verge of losing everything.’
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You can say what you want about this man's responsibility, but the fact is that our economy thrives on people like this.
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