Drink up. The world’s about to end

Or so you would believe if you only read some of the more doom and gloom espousing property market news sites. In many ways, they are right, landlords in particular have come under a long and drawn out assault, as have agents. Ever since 2016 we have seen admin fees banned, sweeping HMO legislation preventing family homes from being chopped up and broken down into sub-let rooms without additional safety precautions and facing a range of tax changes and energy standards amendments.

"How dare we try and turn a profit!" a previous office manager would sulk, during a 2016 morning meeting as we read that our ￡300 +VAT admin fee had just been declared illegal going forwards, but there was no discussion about how we would improve profitability without this revenue stream. In fact, despite screams of the end of the world at the time, very little actually changed in the estate agency world. Lettings fees didn't drop on average across the industry and many more established, professional agencies reported more landlords coming back through their doors.

Deep down, despite a revenue source being cut across the board, for the more professional companies, it was an improvement. The lowest end competition, who were routinely contacting landlords and offering to rent properties for free and only charge the tenant a large admin fee, disappeared from the market. From the landlord's perspective, if they had to pay a percentage fee, they might as well go back to using the best service. Equally, the negotiators at these agencies reported that without the fear of being held over a barrel for admin fees, prospective tenants felt more comfortable making offers. Quite simply, despite the doom and gloom from the property press at the time, it was far from the end of the world.

Right now we see the same thing happening for landlords. In the last few years, the changes for landlords have been harsh, mercilessly harsh in many areas. Most notably the removal of the ability to discount mortgage interest against the rental income on properties held in your own name. For those who ignored all the advice they would have undoubtedly received from experienced professionals, who have always advised to establish a Limited company in which to hold property portfolios. In this set up, although more expensive at the outset, you are still able to discount mortgage payments as a business expense against the rental revenue and are paying corporation tax on the profit. Those who ignored this advice are now faced with paying their personal income tax rate on the full rental revenue, which in many cases is 40% or more.

So who does this tax change affect? It might prove unpopular to say it, but those who it affects the most fall into a few categories. The accidental landlords who inherited a property, the unprofessional set ups who refused to adapt to the current market and those who felt they knew better than the professional advice. Every time I hear a portfolio landlord telling anyone who will listen how the government hates them and they aren't making a profit, it brings to mind a person encountered at a wedding by a fellow property professional relative. They were very down in the dumps about the entire property market and complaining about having to sell up their entire portfolio as they were now making a loss. As it emerged that they had brought multiple properties on residential mortgages as opposed to buy-to-let and had brought them all in their own name. If that sounds suspicious at all, it's possibly the most unadvisable way to build a portfolio and may even have been mortgage fraud.

For this kind of landlord, the doom and gloom is correct, they should panic and yes it is the end of the world, at least as far as owning a property portfolio is concerned. Yet, for the professional and well advised investors, it's little more than a minor inconvenience. As is the upcoming EPC minimum standards law change. Once this comes into effect, all rented properties must meet a minimum EPC rating of "C", but only after 2030. This change has been in discussion since around 2015, possibly earlier and we have another five years before it's enforceable. No one can say this is a surprise and that it's been sprung on the market with little notice.

Once again, this may be a blessing in disguise. Those who did adequate research into the market before purchasing investment properties, will have only brought homes that already meet this standard, meaning this change in the law will require them to spend nothing on their portfolio to meet the legal standard. Equally, there are thousands of rental homes in the market which are in dire need of significant upgrading. This law change spells the end of the much loathed "Let it and forget it" landlords. Of the thousands of homes we see annually, far too many are filled with out of date appliances, storage heaters left over from the 80's and 90's and my personal pet hate, single glazed windows.

When the law changes, these investors will be faced with a simple choice, upgrade their homes to meet a standard fit for the 21st century or sell off their properties to new buyers, many of whom will be first time buyers and willing to invest in refurbishing their own homes.

Much like the stock market, there will always be panic sellers, those who brought in with little research when they heard things were going well and immediately sell up at a loss when things go temporarily bad. Yet the experienced professionals will always view downturns and law changes for what they are, changes to be adapted to. Most importantly, any experienced stock broker or investment banker will tell you "Don't panic". Stay the course and ride out the change, plan ahead for the inevitability of a tough market in the years ahead. But crucially view inevitable downturns and market changes as opportunities. Those in a well planned and professionally managed position have the chance when everyone else panics and sells, to buy at a far better price. Those who understand the changes in the market and adequately prepare for upcoming law changes, know above all, never to take the advice of the panic sellers.