Exploring the Ethical Dimensions of Buy-to-Let Investment.
The Kingdom of Fife has witnessed a profound transformation in its housing landscape over the last few years, and the surge in private renting has led to significant debates about the morality of the buy-to-let market.
Weekly round up on what’s driving the Fife Property market including a look at recent listings, sales and coming soon:
Article, Podcast and TV Shows written and produced this week are:
FPTV (EP 157) GET AHEAD OF THE GAME: Use the last weeks of summer to prepare for autumn selling
September often brings a flood of property to the market, but you can get ahead of the game by preparing to sell in August. Jim Parker and Perrie McIntosh provide advice and hints and tips so that you are not left behind when you want to sell your home.
The Emergence of Accidental Fife Landlords in a Slowing Housing Market?
Are we seeing a subtle change in the landscape of Fife’s property market with the intriguing rise of ‘accidental landlords’? Amidst a housing market slowdown from the levels seen in 2021/22, some Fife homeowners are considering alternative routes, which could impact the Fife property scene in unexpected ways.
Curious about the evolving property trends in Fife? Jim Parker and Richard Cook discuss the fascinating insights on this emerging phenomenon.
Watch out for the Wealth Creation Show on Mondays @ 12.30pm live on these channels:
EP 86 THE WEALTH CREATION SHOW: Patient Investing Pays Off!
The last few years have been eventful to say the least. Between a global pandemic, war, energy crisis, and rising inflation, financial markets have seen considerable ups and downs.
It’s only natural to get nervous during a downturn, but selling everything to avoid losses is counterproductive.
The market rises and falls, and it takes a significant downturn at least every ten years, potentially alongside a recession and other major world events.
So, should you be cutting your losses?
Or should you learn to be the Tortoise rather than the Hare?
Luckily, you don’t need to head back to school to understand this as Lettings Director, Richard Cook and one of the UK’s most successful property investors, Jim Parker is on hand to discuss
If you are a private client of ours, including the ongoing support you can also receive one to one mentoring on portfolio building. Please contact us to richard.cook@fifeproperties.co.uk
This is all about accelerating your wealth in 2023.
*We must point out that we are not financial advisors, and this is only our opinion of what we would do. Investments can go down as well as up so if you do want professional advice from a qualified advisor, please contact us direct and we will put you in touch with someone.
The last few years have been eventful to say the least. Between a global pandemic, war, energy crisis, and rising inflation, financial markets have seen considerable ups and downs.
It’s only natural to get nervous during a downturn, but selling everything to avoid losses is counterproductive.
The market rises and falls, and it takes a significant downturn at least every ten years, potentially alongside a recession and other major world events.
So, should you be cutting your losses?
Or should you learn to be the Tortoise rather than the Hare?
Luckily, you don’t need to head back to school to understand this as Lettings Director, Richard Cook and one of the UK’s most successful property investors, Jim Parker is on hand to discuss
If you are a private client of ours, including the ongoing support you can also receive one to one mentoring on portfolio building. Please contact us to richard.cook@fifeproperties.co.uk
This is all about accelerating your wealth in 2023.
*We must point out that we are not financial advisors, and this is only our opinion of what we would do. Investments can go down as well as up so if you do want professional advice from a qualified advisor, please contact us direct and we will put you in touch with someone.
September often brings a flood of property to the market, but you can get ahead of the game by preparing to sell in August.
Being ready to go when September starts means your photos can be taken earlier, boosting your home with some extra summer pep from the sunnier weather.
After the school year starts, estate agents’ diaries fill up with valuations and photoshoots, which can mean a longer wait to go live. So instead of launching in a crowd, give yourself a jump-start by:
Inviting estate agents in for advice on price and presentation.
Preparing your home for sale.
Getting ready for the photographer.
Gathering information to speed up the legal process.
Laying the groundwork to find a new home to buy.
We’ve got expert tips on all of that right here in our handy guide, so without further ado or delay, let’s dive right in!
INVITE ESTATE AGENTS INTO YOUR HOME
Don’t wait till September to start getting valuations from agents. Get them round in August when the weather is (hopefully) still good and gives your home a bit of summer sparkle.
The advantage of picking an agent now is that you’ll get a couple of weeks to prepare your home before it hits the market and fine-tune your marketing campaign.
Note local sold boards and research online to narrow down which agents you want to invite in – look for sharp photography, engaging descriptions and sales of homes like yours.
Allow an hour for each agent’s visit, then make a list of pros and cons including how each one leaves you feeling, listens to your story, backs up their pricing and offers presentation advice.
As soon as you’ve decided to put your home on the market, it’s time to spring into action around how you present it to buyers. So, and in no particular order:
Make minor repairs like old water stains, squeaky hinges, leaky taps, wobbly door handles and scuffed paintwork to make your home look cherished and cared for.
After Operation Buyer Seduction is complete, the final step is a deep professional clean (unless you secretly adore housework) so everything feels fresh and inviting.
GET READY FOR THE PHOTOGRAPHER
Homes look their best in summer, so use that to your advantage. Get your photos taken now to capture sunlight streaming through your windows and your garden in bloom.
Tell your agent when the sun shines on the front and back of your home so they can arrange a good time for the shoot, perhaps across a couple of visits.
Get the photographer to take a mix of wide, medium and close-up shots to show off the little details as well as the sizes of the rooms.
Try to keep your home looking like it does in the photos for as long as it’s for sale to give buyers a valuable sense of familiarity as they wander around.
While your agent is getting your photos and description ready for launch, you can get to work on speeding up the legal process by having your paperwork ready to go for when you accept an offer.
Dig out your deeds (also known as the land registry title document) which, depending on when you bought your home, could be in your possession, or with your solicitor or mortgage lender.
Gather together any appliance warranties, new-build guarantees, planning permissions for improvements, and certificates for completed building works.
Instruct a solicitor and ask them to send you the property information forms you need to complete when selling that cover things like boundaries, utilities and maintenance.
This isn’t the world’s most interesting task, but if you use the momentum at the start of getting your home on the market, you’ll shave weeks off your timeline and clear the path for a smoother move.
THINK ABOUT WHERE YOU’RE GOING
The most exciting part of moving home is your new beginning, so it’s worth taking some time to be clear about everything you’re hoping for, where you can find it, and how you can make it happen.
Make a list of what your ideal next home looks like and what you need vs what you want, like whether a garden actually needs to face south, or you’re happy if some of it gets the sun.
Get to know the neighbourhood(s) you’re looking to buy in to identify the streets and locations that match your wish list, from parking and parks, to shops and schools, to transport and trees.
Set alerts on Rightmove & Zoopla, but also contact and charm local estate agents to be at the front of their minds when suitable homes come up for sale.
Just one thing to remember here: wait until you find a buyer before offering on another home – you’ll save yourself a mountain of unnecessary pressure and stress.
What’s next for you?
If you’re thinking of selling your home in Fife this autumn and want to get a head start, we’d love to help! Our friendly and expert team is here to answer all your questions, so just contact us at any of our offices: https://www.fifeproperties.co.uk/contact/ for a chat about your plans.
A Fife landlord remarked to me the other day that he felt that there were more ‘posher’ up-market properties coming up for rent in the last six months compared to a couple of years ago.
I stated that this was the case, and it wasn’t all down to the recent rental growth – it was the growth of the upmarket ‘accidental landlord’.
With the Fife housing market showing signs of a slowdown and predictions of further house price declines, I am starting to see the return of the ‘accidental landlord’, but in a somewhat different form to what they were in 2008/9.
An ‘accidental landlord’ becomes a landlord unexpectedly or unintentionally. This often occurs when homeowners rent out their property instead of selling it due to a slowing housing market, a change in personal circumstances, or other unforeseen reasons.
While the sales market in Fife has experienced a period of strength in recent years, activity has started to slow down from the levels seen in 2021/2. In contrast, there has been soaring demand for Fife rental properties.
To give you an idea of the growth of rents.
The average rent for homes coming on the market in the Fife area in 2021 was £764 per month, whilst in 2023, it has been £834 per month.
Some Fife homeowners, fearing not achieving their desired selling price, might opt to retain ownership of their properties and instead rent them out until market conditions improve.
Back in 2008/9, this trend was particularly evident in the middle market segment.
However, in 2023, many property commentators are suggesting if ‘accidental landlords’ do start to emerge, it will be in the upper quartile property segment (i.e. the top 25% of properties by value), where many homeowners bought in the post Lockdown race for space of 2021/2.
Looking at the figures, they could be correct.
The upper quartile rental market starts in just over the £600 per month range in Fife.
In the first seven months of 2021 (Jan to Jul) in the Fife area – an average of 105 properties a month came onto the market for rent at £600 per month or more.
In the first seven months of 2022 (Jan to Jul) in the Fife area – an average of 89 properties a month came onto the market for rent at £600 per month or more.
In the first seven months of 2023 (Jan to Jul) in the Fife area – an average of 119 properties a month came onto the market for rent at £600 per month or more.
(Fife area being KY1-KY12, KY14-KY16).
Many of these could afford to be patient in pursuit of optimal selling conditions. The rise of ‘accidental landlords’ can be attributed to various factors, such as limited property appreciation, increasing mortgage costs, and robust demand for Fife rentals, making renting out properties an attractive alternative.
‘Accidental landlords’ are also created through other diverse circumstances.
Irrespective of what is happening in the economy and Fife property market, births, deaths and marriages continue. There will always be some new couples who decide to rent out one of their properties after moving into a shared home, while others inherit properties through the passing of parents or grandparents.
The current average tenancy length of 51 months provides these new Fife landlords with just over four years to allow Fife property values to recover before re-evaluating the market. However, stepping into the role of an ‘accidental landlord’ carries specific implications that homeowners need to be mindful of.
Understanding the tax implications is a crucial aspect that ‘accidental landlords’ should grasp.
Transitioning to landlord status may result in the loss of specific tax benefits, including stamp duty relief, and necessitate payment of income tax on rent. Furthermore, upon selling the Fife rental property, landlords may become liable for capital gains tax on the profit made from the sale, as it is no longer considered their primary residence and I implore you to take advice from an accountant.
To mitigate the impact of tax changes, some Fife landlords have chosen to incorporate their properties into Limited Companies. Corporate structures offer potential tax relief on mortgage costs and the opportunity to pay lower Corporation Tax rates than individual income tax rates. However, incorporating properties involves additional expenses, such as stamp duty and capital gains tax on existing properties transferred to the company.
Individual landlords with only one property may find incorporation less advantageous, but it could be a viable option for those planning to expand their buy-to-let portfolios.
Investing in property maintenance is a crucial consideration for Fife’s ‘accidental landlords’.
Well-maintained properties are more likely to retain or increase their value over time. Retrofitting properties to improve energy performance can also benefit tenants and future buyers, helping reduce utility costs and enhance overall comfort.
‘Accidental landlords’ must diligently handle this critical area: appropriately protecting tenants’ deposits. Please safeguard deposits adequately to avoid significant compensation claims, with landlords potentially losing up to three times the deposit amount. To protect against such risks, landlords must ensure compliance with deposit protection schemes and provide tenants with essential documents, including Energy Performance Certificates, Legionnaire Certificate, the Tenant Information Pack, and current gas safety certificates.
Misunderstandings can inadvertently arise to renting direct to family or friends, leading to legal disputes.
Even though you know the tenant, it still could be wise to employ the services of a letting agent to establish clear terms in writing at the outset of a tenancy to avoid potential conflicts and protect the rights of both landlords and tenants.
My overriding message to every Fife ‘accidental landlord’ is that they must be aware of the tax implications, consider incorporation a potential strategy, invest in property maintenance, protect tenants’ deposits, and establish clear terms to avoid disputes. Additionally, there are over 170 pieces of regulations regarding renting your property out.
In conclusion, with the Fife housing market experiencing a slowdown, I suspect an increasing number of Fife homeowners are considering becoming ‘accidental landlords’ by opting to rent out their properties instead of selling.
You must weigh the risks of renting your Fife home and the potential rewards.
I know of many stories of Fife homeowners who waited five or six years after the Credit Crunch to hit their ‘target price’ for their existing home, only to realise it cost them tens of thousands of pounds in costs and the price they had to pay for their new home. On the other side of the coin, I know plenty of ‘accidental landlords’ in Fife who used the fact that they became an ‘accidental landlord’ as an opportunity to build an impressive rental portfolio over the last 15 years.
If you are uncertain or do not possess all the facts, don’t hesitate to contact me to discuss your plans. Then I can give you appropriate level-headed advice to make the right decision. By taking proactive steps and understanding the risk and rewards of being an ‘accidental landlord’ in Fife, you can navigate the Fife property market successfully, even during uncertain times in the housing market.
Some peoples’ pay checks vary depending on their hours and sales, so increasing your income could stabilise your earnings.
Increasing your income could reduce any pressure you may feel regarding your ability to manage your money.
Do you want to have a higher income?
Do you want to be able to save money for future purchases or establish a retirement fund?
Luckily, you don’t need to head back to school to understand this as Lettings Director, Richard Cook and one of the UK’s most successful property investors, Jim Parker is on hand to discuss
If you are a private client of ours, including the ongoing support you can also receive one to one mentoring on portfolio building. Please contact us to richard.cook@fifeproperties.co.uk
This is all about accelerating your wealth in 2023.
*We must point out that we are not financial advisors, and this is only our opinion of what we would do. Investments can go down as well as up so if you do want professional advice from a qualified advisor, please contact us direct and we will put you in touch with someone.
Autumn gets a bad rap as a season for selling your home. It’s always pushed back behind the blossom of spring, the sunshine of summer, and the festive magic of winter.
But Autumn is what you might call the hidden gem of seasons to sell. There’s still plenty of activity from Fife buyers, the leaves are turning into a bold and beautiful display of colour, and there are no stressful deadlines like Christmas and school years to meet. Instead, Autumn can be the most relaxed season for starting and planning a move.
