Property, Politics and the Future of Landlords with Russell Quirk

In today’s episode, I’m joined by Russell Quirk, a well-known property expert and one of the UK property industry’s most outspoken commentators, for a straight-talking conversation about where the housing market is really heading.

Russell started as an estate agent at 16 in his family business, went on to run his own traditional agency, and later founded Emoov, one of the UK’s first online estate agencies. Today, he works behind the scenes with some of Britain’s biggest property brands and is known for his candid, often controversial views on landlords, renters, and housing policy.

We cover how being a landlord has changed over the last decade, what recent legislation really means in practice, and why the conversation around property is becoming more political than ever. No hype, no fear-mongering - just honest insight from someone who’s seen the industry from every angle.

If you’re an investor trying to make sense of the noise and think clearly about the future, this is an episode you’ll want to listen to.

🎯 What You’ll Learn

• How the role of the landlord has fundamentally changed over the past decade
• The real (and often overlooked) consequences of the Renters’ Rights Act
• Why landlords have become political “pantomime villains” 
• How regulation, tax, and ideology are reshaping the private rental sector
• What this all means for rents, tenants, and housing supply over the next five years
• Why HMOs need a PR reset and how professional operators can stand out

👉 If you want clarity on your own HMO strategy and what your next move should be, you can book a Strategy Call with me here.

💻Resources & Mentions

• The HMO Roadmap: Feeling overwhelmed? Access 400+ tools, templates, and lessons to help you start, scale, and systemise your HMO business - all in one place. Join here.
• Facebook Community: Got questions or need support? Come and connect with 10,000+ investors inside The HMO Community here.
• Social: Follow me on Instagram for daily HMO tips, advice, and behind-the-scenes updates here.

If you enjoyed this episode, hit subscribe and drop a quick review on Apple Podcasts or Spotify - it helps more investors find the show!

Transcript

[00:00:00] Andy Graham: Hey, I'm Andy and you're listening to the HMO Podcast. Over 10 years ago, I set myself the challenge of building my own property portfolio, and what began as a short-term investment plan soon became a long-term commitment to change the way young people live together. I've now built several successful businesses.

[00:00:20] Andy Graham: I've raised millions of pounds of investment, and I've managed thousands of tenants, join me and some very special guests to discover the tips, tricks, and hacks, the ups and the downs, the best practice And everything else you need to know to start scale and systemise your very own HMO portfolio now. 

[00:00:40] Andy Graham: Today's guest has spent decades at the sharp end of the UK's property market. He's worked as an operator, as an agent, as a commentator and someone who's seen housing policy up close and personal. Russell Quirk is known for calling out uncomfortable truths about landlords, about renters, about reform, about the political decisions shaping the future of property.

[00:00:58] Andy Graham: In today's episode, we're getting into the real impact of things like the Renters Rights Act, how the industry has changed for landlords and investors. Well, the next five years might actually look like. No fluff, no hype, just the real stuff that investors and landlords need to hear. Let's get into it.

[00:01:17] Andy Graham: Hey guys. It's Andy here. We are gonna be getting back to the podcast in just a moment, but before we do, I wanna tell you very quickly about the HMO roadmap. Now, if you are serious about replacing your income, or perhaps you've already got a HMO portfolio that you want to scale up, then the HMO roadmap really is your one stop shop.

[00:01:33] Andy Graham: Inside the roadmap, you'll find a full 60 lesson course delivered by me teaching you how to find more deals, how to fund more deals, and raise private finance, how to refurbish great properties, how to fill them with great tenants that stay for longer, and how to manage your properties and tenants for the future.

[00:01:48] Andy Graham: We've also got guest workshops added every single month. We've got new videos added every single week about all sorts of topics. We've got downloadable resources, cheat sheets, and swipe files to help you. We've got case studies from guests and community members. Who are doing incredible projects that you can learn from, and we've also built an application just for you that allows you to appraise and evaluate your deals, stack them side by side and track the key metrics that are most important to you. To find out more, head to theHMOroadmap.co uk now, and come and join our incredible community of H HMO property investors

[00:02:27] Andy Graham: Now before we get into it all, Russell, can you tell us a little bit about yourself? How did you end up here? Tell us about your relationship with the property market and what your involvement has been from a political perspective when it comes to property as well.

[00:02:40] Russell Quirk: So I've always been involved in property. So I literally, since I was a kid, because my family had been estate agent since the 1950s, so my dad and his dad before him were estate agents in London and Essex. Uh, pretty big business back in the sixties, seventies and eighties, which I went into when I left school. That then got me into a business called Emove after I'd run traditional estate agency branches at Emove was one of the first online digital disruptor estate agencies.

[00:03:08] Russell Quirk: So I ran that for nine years. So always been around property. I've done a bit of house building. Uh, I'm, I guess, look, it's fair to say even though I say so myself, I'm pretty entrepreneurial. So I've been involved in property recruitment in the past and all sorts of, kind of related bits. Then yes. In 2006 I got involved, ironically enough, in objecting to a local planning application, which was, in my view, pretty onerous at the time.

[00:03:32] Russell Quirk: And I somehow came to the attention of the local council leader who then asked me to stand as a counselor. I said no, a few times I then he got the big guns out, people like Eric Pickles and others to kind of put their arm around me and persuade me. So I stood as a conservative counselor. I got elected in 2006.

[00:03:50] Russell Quirk: I ended up chairing the planning committee at Bruell Borough Council for a period of time. I did that for crikey, two terms, eight years. Then because of the age of my family and because of the business that I just started, uh, I was about to start. I stood down, kind of retired, so I didn't seek reelection.

[00:04:09] Russell Quirk: And then lo and behold though, three months ago, a collision of circumstances led me to go back into local politics. I'm a counselor in my home neighborhood, actually of Hutton South in Brentwood, in Essex, and I now sit again on the planning committee, and that is quite an interesting dynamic seeing. Kind of the planning consent process from a public sector perspective and also seeing it as a private sector guy, as a property agent, as a developer, I think that, I guess that gives me quite a rounded expertise.

[00:04:40] Russell Quirk: So, and the bit in the middle of that is that at Emove, where we did our own PR after sacking about five different PR agencies for not being able to keep up, to be honest. I became very vocal, you might say, outspoken about certain aspects of the property industry and about the housing market, and ended up doing a lot of property commentary for the BBC, sky ITV, GB News Talk TV and so on, and so on and so on.

[00:05:07] Russell Quirk: So I've done that for about the last four or five years, and that's then pushed me towards the political side. Where I now do kind of paper reviews, political commentary, mainly for GB News, which is now most times of the day of the week, the biggest news channel in Britain. So it beats BBC News and Sky News, but also for what you would call independent media, which is those that have actually generally been canceled by the mainstream media.

[00:05:33] Russell Quirk: People like Mike Graham and Dan Wooten, and people like that. They have now got very, very successful YouTube channels. And so I do political commentary and a little bit of housing market stuff for guys like those. And actually before people say, yeah, big deal, what do they get? Three or 400 people watching they get between the two of them.

[00:05:50] Russell Quirk: So taking those two examples, Dan Wooden and Mike Graham, they get about a million views a week on their YouTube channel. So it's actually in many respects, bigger than the mainstream media kind of terrestrial and digital TV channels.

[00:06:02] Andy Graham: I mean that is certainly some CV and this is why I really wanted to get you on the show. Actually, Russell, our paths obviously cross doing some of these other interviewee bits and pieces for other networks and shows, and I was really interested in your opinions, which were very direct and not necessarily unique, certainly from my perspective, but I think the way in which you shared a lot of your opinions and spoke quite candidly about your thoughts on things, I think actually has become quite unique.

[00:06:31] Andy Graham: We've taken quite a soft touch approach to things. Now a lot of our listeners are obviously very active investors, and so listening to somebody like yourself, the opinions, the experiences that you've got is an incredibly useful exercise, and I think it helps us all make better and more informed decisions about whatever it is that we are doing as investors ourselves.

[00:06:51] Andy Graham: So, I mean, with such a broad base of experience. I guess where I would like to start today is just from a very high level, Russell, what your opinion is on how different being a landlord is today compared to 10, let's say 15 years ago.

[00:07:05] Russell Quirk: Oh, it's changed significantly, hasn't it? Which I think everybody, on any side of the landlord argument would agree.

[00:07:13] Russell Quirk: I mean, look, I remember being a landlord 20, 25 years ago. It wasn't quite unregulated, but it was a bit of the wild west, wasn't it, in terms of there being a distinct lack of oversight, shall we say, and regulation with regard to condition and regulation around tenancy agreements and so on. And it seems that over the last, I guess five or six years it would be.

[00:07:33] Russell Quirk: So certainly since kind of. COVID times ish or just before the landlord fraternity had become a whipping post. I think for politicians, I think they see and have seen landlords as easy prey, easy meat. From a cash cow perspective, I get really angry about that. And look, I'm not a big landlord. I've got one property that I rent out, right?

[00:07:53] Russell Quirk: So I'm not a big professional landlord, like many of your watchers and listeners to this, but I suppose the following things have changed. So I think first of all, certainly the regulation, particularly the Renters Rights Act, which of course is now law, having taken many, many years over two successive governments, really to kind of get to that point.

[00:08:12] Russell Quirk: Lots and lots of tax changes. Section 24 in particular. And I think what I would say, turning the screws of vilification with regard to landlords being painted by the media, but helped by government as pantomime villains. And I get very irritated by that because my experience is about 96, 7, 8%, whatever it is.

[00:08:36] Russell Quirk: The vast, vast majority of landlords are good, honest people. Probably not professional landlords. They might be HMO owners and they might have three or four of them. But not all buy-to-let landlords, for instance, are making their entire living out of having two or three properties, which is the average.

[00:08:51] Russell Quirk: So you've got this kind of roll your sleeves up, semi amateur class of landlord, which I think has been bashed every which way. And the irony of course is the, a lot of those properties, whether it's HMOs or buy-to-lets, that are in the rental sector, are doing a job that the successor governments, I mean literally going back probably 20 or 30 years.

[00:09:13] Russell Quirk: Have failed to do in terms of a providing enough houses for rent and for sale per se, but also with regard to social housing. So there are hundreds and hundreds of thousands of properties that are lived in by people that top up the rent with housing benefit. Well, that's because governments have not built enough homes.

[00:09:30] Russell Quirk: I mean, actually, arguably thinking about it since the sixties, I think the last time we've built 300,000 plus homes, which is the current labor government target. Was in the days of McMillan, I mean, back in the sixties. So landlords are trying to park their money somewhere that's creative, interesting, reliable, and safe.

[00:09:47] Russell Quirk: Only for governments to say, yeah, we don't like you very much. And actually, even though you are creating a supplier of properties that we've neglect to do for a growing population and a million people on the housing waiting list, we're gonna continue to bash you anyway. So I'm really quite angry.

[00:10:02] Russell Quirk: Actually, and the, it's yet another area of government where you've got policy being made by people that haven't got a bloody clue about the sector, the subject in which they're making policy and regulation. So I feel pretty sad for landlords in that they are being squeezed and screwed completely, utterly unnecessary, but I think some of that is playing to a crowd.

[00:10:25] Russell Quirk: So certainly left-leaning governments. Want to see tenants as something to shore up as a sector because they think those tenants are gonna be more likely to vote for them. They want to paint landlords as that panto villain because they're seen as kind of, do you remember Rackman, the slum landlords?

[00:10:41] Russell Quirk: That that's the, the belief or the, the picture that's painted by government 'cause it's suits, their narrative and Yeah, we kind of got it all around the wrong way. I think really, to me, landlords should be encouraged. By way of tax breaks, not tax hikes, I mean, seriously 'cause of the risk and because of the service I think that landlords are doing to Britain.

[00:11:02] Andy Graham: One of the questions I had for you today was about housing policy specifically, and whether or not any of this was driven by evidence whether any of these decisions, whether any of these changes in legislation were really being driven by evidence, and I suppose evidence that would. Demonstrate some sort of productive outcome.

[00:11:19] Andy Graham: So I guess we could look at section 24, and maybe it did, maybe it didn't raise as much money as they thought, but certainly it hasn't all been upside for the government. But let's look at the Renter's Rights Act as another example and lots of other changes that have come about and continue to, like you say.

[00:11:35] Andy Graham: So beat landlords down. How much of this is being driven by evidence or is what we're saying. Is that this is all vote spinning? Is this all just for the court of public opinion?

[00:11:49] Russell Quirk: I think vote spinning an ideology. So the ideology being landlord bad. Tenant Good. There's a cash element squeezing the landlord sector, doing away with the right to offset your mortgage interest, for instance, against income potentially in the future, creating more and more taxation burden on income, on revenue without taking costs, adding national insurance to rents from a landlord income perspective.

[00:12:16] Russell Quirk: All of that stuff, it's just designed to prey on a, a sector that is big and is seen as prosperous, and of course. Although it's big and it's got lots of money attached to it, there's a lot of landlords not making a loads of money on a monthly basis because of those regulations, because those costs. So I think there's a cost element.

[00:12:32] Russell Quirk: I think landlords are seen as a taxation opportunity by the ex checker. But if it was an evidence driven approach to the PRS. Well, then the government surely wouldn't be doing what they're doing. They wouldn't be squeezing landlords so that there's potentially a hundred thousand landlords exiting the sector every year, because that's bonkers, right?

[00:12:50] Russell Quirk: Because we need that supply of properties, because as I've said, the government doesn't provide enough themselves, so the evidence can't be being looked at. Because of that kind of failed logic, otherwise, I suppose. No, and I think it's purely ideologically based. If you look at a couple of things, first of all, EPCC, right?

[00:13:10] Russell Quirk: So EPCC, which is, I mean, they keep moving the gold post, Andy, don't they? So I forget now. Is it 2019 or something? I'm joking when that's gonna come. EPCC nonsense. I mean, it's for the birds on the basis that there's a large proportion of landlords properties that can't ever get to EPCC because they're a hundred years old, for instance.

[00:13:30] Russell Quirk: And even if they did, it would cost 50-60 pounds to remedy the fact that their EPCE and to get 'em to EPCC. And the reason I think that's ideological thanks to people like Ed Milliband who has got this to me, crazed fixation with net zero. In a country that only emits 1% of carbon dioxide, insofar as the planet's contribution to that total.

[00:13:52] Russell Quirk: Even if, even if all landlords went EPCC, even if all cars were electric, even if we turned off gas and oil completely, which wants to do, let's say we got from that 1% to our contribution being zero. What bloody difference does that make to the planet when China are churning out an increasing amount of carbon?

[00:14:14] Russell Quirk: So are the US, so is India. That's why I think that, as an example, EPCC is purely ideological, but also Section 21, removed by way the Renter's Rights Act. I get more and more angry when I hear politicians talking about no for evictions. There's no such thing as a no for eviction. What there is is tenancy agreements coming to an end at the end of 12 months and then month to month, and then the landlord deciding that they want to take the property back.

[00:14:39] Russell Quirk: But that's not throwing people out out on the street. That's those tenants being outside the contractual arrangement of an AST. All the government had to do, I would suggest, is to allow regulation to include a deal between landlord and tenant where the AST could be as long as they wanted it to be. A bit like in Germany where you can provide for things like rent increases based on RPI or CPI.

[00:15:03] Russell Quirk: You can have break clauses whenever you want, allow the tenant, therefore, security of 10 year for 10 years, 20 years, 30 years, or whatever. Have it as a proper contract, like a phone contract, like a contract when you go and buy a car or when you go and buy a house, have a contract that both parties turn up the land will go into with eyes wide open.

[00:15:21] Russell Quirk: Um, that actually then protects both. I mean, that would've been the most sensible thing to do. Instead, we've had millions of pounds, loads of parliamentary time and years of debate. To actually solve a problem that was never a problem, because of course, most of the time landlords aren't kicking tenants out on the street, particularly if they're a good tenant.

[00:15:40] Russell Quirk: So, long answer mate, sorry. But pure ideology and playing to a tenancy crowd and not just the tenant. Tenancy activist groups who I've crossed swords with in the past, by the way, and I hope some of them actually get to watch this because they're abhorrent people that are effectively Marxist types that genuinely believe that owning property is theft, as is the Karl Marx adage.

[00:16:04] Russell Quirk: Anyway, you'll get me on a rant if you're not careful. But yeah, look, so governments, and it's not just property by the way, whether when it comes to energy, when it comes to defense, when it comes to all sorts of other things, particularly around things of an economic nature. Governments are increasingly ideological and led by populism rather than conviction, if you know what I mean. So look, I can explore that all day, but we've only got 40 minutes or so.

[00:16:28] Andy Graham: Well, I mean, good to know at least that it's not just me feeling like this. And I think your, the picture that you portray, the landlord, of course, being the pantomime villain here.

[00:16:38] Andy Graham: But also the fact that this is a pantomime. I think all of these different examples demonstrate that so perfectly well, and I think when you step back and you look at it like that, it does actually start to make an awful lot of sense that this is just one big charade and nobody really has a good gauge on what the consequences of all of this, materially speaking are becoming and are likely to become.

[00:17:01] Andy Graham:  Interestingly, you mentioned some of these left-wing activist groups. As well. And I think that these are a dire consequence of this anti landlord sentiment. Obviously they are spearheading a lot of it, but only this week. I think I was featured in some article that maybe for the independent or something like that, and Acorn, who's a group, I have no doubt at all you'll have come across, but Acorn had shared some.

[00:17:24] Russell Quirk: I just suggest they're all nuts. 

[00:17:25] Andy Graham: There you go. Yes, they are absolutely nuts and they're not, it's not the first time that I've bumped into them as well, but there's a lot of this and what I find. It's kind of scary is just how much credibility they seem to behold amongst the general public. And that's a really concerning thought because it's not just the characters like Ed Miller Band and the home secretary making these changes and hopefully they'll move out of office and someone can come in and reshape this.

[00:17:52] Andy Graham: Actually, culturally speaking, I feel like there is a big, big and very deep rooted problem now, and I suppose my next question to you, Russell, is. Is there a way out of any of this? Like, does this get better at any point or is this ultimately what we just need to accept and settle for and just get on with it?

[00:18:12] Russell Quirk: I think it can get better. I think that there's a whole. Political analysis and picking through that I could now do in terms of all that's wrong with politics in Britain and probably actually across the world in terms of what I would call the vacuous, empty suit plastic politicians that are in place for themselves and are completely out of touch with the public.

[00:18:32] Russell Quirk: And that's why they don't make proper decisions because they've often, certainly the labor front bench, never had a proper job, never run a business. They just don't understand the real world. I think they need to go. And by the way, I mean red, blue, yellow, green, the whole thing. I think anyone, any party that is made up of people that have left university, gone straight into labor or conservative hq, been a bad carrier, become a spad.

[00:18:57] Russell Quirk: Gone through election as a little test in a paper candidate, C, as they call it, done that, and then become an MP at the age of 35, with no life experience whatsoever, often either red or blue coming from money. Those people have to be stopped, right, coming into politics because they are the problem. It's not just ideology, it's the outrageous nature of their lack of life experience.

[00:19:19] Russell Quirk: So. I'm a bit biased because I'm a reform counselor, right? So I'll try and park that to one side where I believe that reform will deliver that change and will be authentic and are much more grounded. And believe me, I'm in that reform network. I meet people every day that are door knockers, canvasers, leaflet deliverers, and counselors, MPs and politicians that mainly are very, very down to earth and very keen to deliver change.

[00:19:44] Russell Quirk: What I think needs to happen with property, property needs to be taken outta politics completely. So the supply of housing, as in new builds in particular, and to an extent, regulation needs to be incepted by those that are accountable to the taxpayer, particularly when it comes to social housing and so on, and work to a mandate that perhaps is public sector.

[00:20:11] Russell Quirk: Led, funded, overseen, but actually are left alone as non politicians and not a kwango. As such, I'm not a big fan of kwangos. I'll give you an example. The problem with supplying enough houses in Britain, so we generally supply about 200,000 new homes a year. We need apparently 300,000, and a lot of that is because of positive net immigration.

[00:20:31] Russell Quirk: Think about that as you will, right? Whether that's a good or bad thing, right? I personally think we need immigration to an extent controlled, albeit so. We have a situation where the government, no government has delivered enough housing, as I say, since the days of McMillan because it's used as a political football and because no housing minister for 20 years has actually come from a housing or a property background.

[00:20:51] Russell Quirk: I mean, that's nuts. That's absolutely mad. Imagine putting someone in charge of surgery at Basel and hospital, and they used to be a librarian or a carpenter. I mean it’s just nuts. It just makes no sense to me whatsoever. 

[00:21:06] Russell Quirk: If you were to set up National Development Corporation, which was a board of experts, so ex developers, house builders, bankers, whatever, that had a mandate that they went to government with and said, this is our 10 year plan to solve the housing crisis. Sign it off, give us the money. We'll have quarterly board meetings. You can hold us to account as civil servants and politicians, but you mustn't get involved with this.

[00:21:30] Russell Quirk: Every three or four days trying to make a silly announcement as a politician to make yourself look good. That actually when you take the politics and the grandstanding and the football, the political football out of housing would be a big, big step. Forward in terms of solving a lot of the problems we've had.

[00:21:48] Russell Quirk: So what I'm saying, Andy, is that most of the problems we have in terms of particularly housing provision in the UK social housing in particular is because it's something that is used as that political football as a means for gratuitous headlines that give a politician credit, that's gotta stop. And do you know what, mate?

[00:22:07] Russell Quirk: Maybe I should become housing minister. I'm serious because I would in a future government to say, look, stop the bullshit. I don't care about the headlines. I care about the solution. And judge me on that in five years time, right? Not a housing minister that's only got two years in position, typically that needs to do all this quick stuff to make it look good, but never follows through, never actually gets delivered.

[00:22:28] Russell Quirk: For instance, your viewers might not like this very much. I advocate bringing back council housing. There are 3000 houses built in 2004 by councils. There used to be 300,000 council houses built. That would solve with help with guidance, part of the social housing problem because you'd make it the responsibility of councils.

[00:22:47] Russell Quirk: However, many of them there are 300 plus borough and district councils, but also they would then be judged politically at the ballot box. In each instance if they hadn't delivered enough in their area for their local housing waiting list needs. Anyway, just some ideas as to how we might solve it.

[00:23:04] Andy Graham: Some, I mean, very interesting to hear these ideas. You'd certainly get my vote, Russell, as the housing minister. I'm sure you get a few from our listeners as well, so maybe think on that one. And actually on your point around, uh, social housing, I agree entirely. I think that one of the big solutions to the big problem we have has to be a ground up solution to more homes.

[00:23:26] Andy Graham: And actually social housing is a very deep rooted problem and the lack rather of social housing. And the big problem at the minute is that the pressure to. In many ways deliver that housing is applied to the private developers who've gotta make their own schemes economically viable and somehow pay for this social housing, which I may have shared this on the podcast recently with.

[00:23:49] Andy Graham: So some of our listeners may have already heard this, I can't quite remember, but I recently signed off for section 106 agreement and in that was a large payment towards affordable housing. In principle, I have no issues with that so long as it doesn't undermine the viability of my scheme. But what was, and what did really frustrate me was that in that section one agreement, the council tried to get me to agree that if in a certain amount of time, I think it may have been five or 10 years, they didn't.

[00:24:16] Andy Graham: Apply the amount that I was going to pay on that section 106 to social housing. They could use it for whatever they wanted. They could just be thrown on the bonfire. And of course, I said not in a million years am I could have agreed to that.

[00:24:29] Russell Quirk: Yes, completely wrong.

[00:24:30] Andy Graham: I think that this is the sort of the approach that on a local level is being taken.

[00:24:34] Andy Graham: Clearly there's not enough accountability to take some of the resources that we do have. Turn it into what we actually need. I see that there's a real breakdown at that kind of fundamental level as well, which is obviously well below the, where the governmental decisions are being made. 

[00:24:51] Russell Quirk: But I'm afraid you've got a lot of council officers and civil servants that aren't in any way accountable.

[00:24:55] Russell Quirk: They're hidden, they're not elected. It doesn't matter what happens, they're not gonna lose their jobs. I mean, I don't think council officers, civil servants ever get sacked anymore because everyone's too scared of what they might do. Litigiously, I'll tell you a very, very quick story. When I was a. Lemme tread carefully here.

[00:25:10] Russell Quirk: I am aware of a local authority in Essex that some years ago I asked that local authority a question with regard to some odd stuff in that authorities' accounts, and it related to 600,000 pounds worth of section 106 money that had been sitting in the bank for quite some time. Or rather, it was on the accounts as sitting in the bank, but it wasn't in the bank.

[00:25:32] Russell Quirk: So I asked that chief executive at the time, where's the money? And their answer was, we are not sure. Wow. So I said, okay, well first of all, we need to go public with this because this is effectively taxpayer money, right? It's designed to assist the taxpayer with whatever it was gonna be for play area, social housing, part of the school, whatever.

[00:25:52] Russell Quirk: And there was huge resistance by that administration to go public and to make themselves look culpable, even though they were culpable, or certainly that council, maybe a previous administration was, that got covered up that was never made public, that that money had gone missing. And I further asked a question.

[00:26:08] Russell Quirk: As I understand it, section 106, money has to be ring-fenced and used for its purpose, except if they can coerce an agreement like you've just outlined. And I said to the chief exec, is there a possibility that it's been used for the wrong thing IE for paying salaries or for paying for something other than the purpose for which it was intended?

[00:26:29] Russell Quirk: And that chief executive said to me, yes, that is very possible. So now multiply that across. Then there's 440 councils across Britain, including county councils. Now try and calculate envisage how much Section 106, money that is supposed to be there for good intentions has actually been lost, forgotten, or wasted, or misspend.

[00:26:53] Andy Graham: I mean, it's a pretty scary thought. But I think we can conclude that it's probably substantial and it's certainly not helping.

[00:27:02] Russell Quirk: Brilliant. I think that the civil service, frankly, needs to be turned upside down and shaken and there, there has to be a sway of change within the civil service because. They're not accountable.

[00:27:14] Russell Quirk: I'm not saying everyone, but generally as a generic, they're not serving the taxpayer well. It's very, you're probably too young to remember this, but yes, minister, very, yes. Minister. Those that are watching this and listening that, know what I mean by yes Minister and yes, prime Minister will hopefully now be, uh, smiling at the thought of the fact that the reality is government and local government are run exactly as that sitcom back in the seventies, portrays.

[00:27:40] Andy Graham: Well, this is an interesting conversation because I guess more to my point, I do wonder whether or not these issues that are so deep rooted can be fixed. And with my investor cap on, I'm always looking for ways to make my business operate as best as it possibly can be as profitable as it can be, provide the best services for our customer.

[00:28:00] Andy Graham: Our tenants and listening to you talk about this stuff, I think underlines a lot of what many of us and our listeners are thinking and are concerned about. I've got a specific question about HMOs Russell, and we've talked obviously quite openly about the opinion towards housing, towards landlords. But specifically focusing on HMOs for a moment, what is your thoughts on the broad opinion on HMOs in the housing market at the minute?

[00:28:29] Andy Graham: Is it, obviously, I think there is a narrative that draws into the immigration crisis to an extent, uh, certainly in some areas, but also I think that there is perhaps a, a broad misunderstanding about what HMOs are from the lay individual. What are you seeing?

[00:28:46] Russell Quirk: So I think HMOs need a bit of a PR rebrand. I don't quite know how you do that given the, how many people make cut the HMO sets, or, I dunno, half a million people, HMOs. I think had, and I say had rather than a, have a bit of a grubby reputation for being a kind of hastily, concocted, partitioned, 1930s, three bed semi somewhere that now sleeps nine people kind of thing.

[00:29:13] Russell Quirk: I think it's the old, again, I'm gonna use seventies analogy, sorry, but I'm that old. A rising damp type analogy where regulation is ignored and it's all about packing as many people in as possible. So. I see through my endeavors and my traveling around and media and so on, and also some of the software providers like Coho for instance, that I've been quite close to.

[00:29:35] Russell Quirk: So Van there, and it seems to me that there is now a developing HMO kind of product that is potentially much more up market. It's much more polished, it's much more professional, dare I say. I think the HMO sector as a kind of headline, as a brand does need a revamp so that like it is in the US single family occupancy.

[00:30:02] Russell Quirk: As such, it can be seen as not only something that doesn't have a stigma attached to it. But also something that's incredibly investible. Now your viewers and listeners to this will be saying, yeah, we know it's investible. It's great because we get a much, much better return in terms of yield and an HMO than if it was a buy to let.

[00:30:21] Russell Quirk: Not withstanding there's extra agro, extra kind of operational kind of friction that goes with it. But I think if HMO status can be elevated and polished a little bit in Britain, it becomes evermore. Investible, it becomes on more people's radars in terms of that yield. And I think that's good.

[00:30:38] Russell Quirk: Particularly if you get, and again, this might not be popular, some institutional landlords coming in, so they're already in build to rent. We hear that they're already buying up sways of properties as, um, buy to let, maybe to an extent if an LNG or a BlackRock or an Aviva, or, I dunno, a Grainger decided to get into kind of very.

[00:31:00] Russell Quirk: Ordinary in HMOs across the country, but professionalize. So there's a standard, right? They've all got en suites or whatever it might be. They've all got a certain level of standard and quality. I think that would do the HMO sector, the world of good. So yeah, I think the only way are, I think is what I'm saying.

[00:31:17] Andy Graham: That's certainly good to hear and I think I can imagine a lot of our listeners are probably sitting thinking, well, from their perspective, the HMO market is all high-end. That's what we see on Instagram. It's what we see on Facebook, it's what we share inside our community. But it is worth reminding everybody that we represent.

[00:31:36] Andy Graham: We, our community, our listeners, the people doing the sort of stuff that we are doing, we still do represent a very small fraction of the housing market. And actually more specifically still the HMO housing market. There are still a lot of landlords that have inherited properties in locations, large portfolio landlords that have never really reinvested in that sort of stock and has caused a lot of problems.

[00:32:00] Andy Graham: I've seen it firsthand on the ground in local authorities that I've been operating in. That is ironically where 85% of the council's attention goes to, but ultimately it's the other 85% of good landlords that end up having to pay the consequences of that through more administrative costs, which trickles through as licensing fees that they're able to justify more enforcement notices, additional local regulation above mandatory standards and things like that.

[00:32:27] Andy Graham: But I completely agree and I implore all of our listeners and community members to just keep doing what they can, showing off their work and developing good relationships with their tenants. I think a big part of this actually is now. Almost a generational thing. I think if tenants who would typically of a certain age come and experience a good living environment and a good sort of landlord tenant experience, they will take that on.

[00:32:53] Andy Graham: And actually that will help over a number of years, and it might take quite some years, but that will steadily help change the opinion as well. And I think that that is one of the really important solutions to this problem, as well as some of the other ideas that we've talked about. I don't wanna get into the detail of the Renter's Rights Act today.

[00:33:11] Andy Graham: We've done it on the show before. I'm sure you are already bored to death of talking about it, but now that the dust has settled, now that we know that it is happening, what do you think the tangible, unintended consequences that has been overlooked at government level will actually be for the housing market?

[00:33:29] Andy Graham: I'm talking about for property values, for tenants, for landlords, for housing supply, all of that stuff.

[00:33:36] Russell Quirk: So the biggest effect, I actually think the effect in terms of landlords exiting, I think we've probably seen that in anticipation of what looked like a very, very scary bill, particularly when labor kind of dialed it up after taking the bat from the conservatives, you know, we got worse.

[00:33:52] Russell Quirk: I don't think now you're gonna see an exodus of landlords leaving because I think, although it's a bit onerous, and as I said earlier on, the government has unnecessarily kind of poked. A stick at landlords. I think the consequence probably is that you are not gonna see tenants leaving willy-nilly. You are not going to have an issue in terms of tenants and pets and tenants on housing benefit that otherwise you might not have wanted to pre and so on.

[00:34:21] Russell Quirk: And so I don't think we are gonna see. A huge reaction by landlords that's negative to the sector, but there is one consequence, which the government has definitely overlooked. So it, it's a great question and one that probably is overlooked by many, many, many people, particularly in government. And that is the effect on the court system.

[00:34:38] Andy Graham: Mm.

[00:34:39] Russell Quirk: The nonsense in that act, which states that you can't be made to pay over the advertised rent of that property, and that there has to be on an annual basis. The rent can go up, but it can't go up by more than market. Well, who's going to really regulate that? What happens when there's a dispute? In fact, I'll tell you exactly what's gonna happen.

[00:35:01] Russell Quirk: Landlord seeks to put up rent by 3%. That's about right. 4%. Whatever tenant disagrees, decides to go to tribunal. Multiply that by, I dunno, conservatively a third of all tenancy. The change hands every year. So I think there's about 3 million tenancy transactions a year. So you might end up with a million extra cases going through the housing courts, the tribunals where.

[00:35:25] Russell Quirk: Not only is that gonna clog up that process, that legal process, but how on earth is a judge or a tribunal of magistrates gonna settle on what is a fair market rent, particularly for something that perhaps doesn't have any comparables. So that whole court thing is going to, I mean, the court system is gonna break.

[00:35:45] Russell Quirk: I mean it's, it's under huge pressure in general now in terms of our justice system. But the property side is gonna absolutely break. In about a year's time, we're gonna start hearing from government from David Lammy. If he's stood in place as Justice Secretary, we understand there's a problem now. Well, yes, it's one that you should have foreseen.

[00:36:04] Russell Quirk: This is what we're gonna do about it. And I dunno what they're gonna think the answer's gonna be, but I'll tell you one thing, it won't be sensible and it won't be adequate. So what you end up with is landlords in two or three years time that have tried to honestly, and with good intention and legitimacy, put the rent up.

[00:36:22] Russell Quirk: Mildly for that tenant as is their right. And you have a lot of landlords that are stuck in that court process system at great cost. That's gonna be an issue. So I don't think the Renter's Rights Act, per se, an EPCC and all the other stuff that's happened in the past Section 25, I don't think they're the issue necessarily.

[00:36:40] Russell Quirk: No AST terms anymore being made to take basically any tenant that kind of faces up to you, the court system is gonna be the bit that is played. So tenants will play the system and gets clogged up. I don't quite know what the answer to that then is in terms of what landlords will do. What I hope doesn't happen and kind of in deference to what I just said five minutes ago, is that landlords then don't say, okay, now I'm taking it back.

[00:37:06] Russell Quirk: I'm now going to evict the tenant, which I'm allowed to do if I either want to live in that property or I want to sell it, and maybe, maybe that is the straw that breaks the camels back in two or three years time. Because landlords will feel completely helpless in terms of tenants clogging up the system and not paying an additional rent.

[00:37:23] Russell Quirk: The same applies by the way to rent arrears. If there's rent arrears at the same time as all that's going on, then you're gonna see a horrendous choking, a bottleneck of those arrear cases being seen and heard by courts as well. So we call it unintended consequences. This should be foreseen by a government.

[00:37:44] Russell Quirk: That is a government of two or 3000 people, spas, civil servants, and so on. You think there'd be a brain cell between. Those people wouldn't you? But clearly not

[00:37:54] Andy Graham: Well. Precisely. And I often find myself pondering just how poorly thought that this has been. Or is there something I'm missing completely that they're fully aware of?

[00:38:07] Andy Graham: And uh, is it the very fact that they are quite happy for that? Straw to break the camel's back and actually there will be some magical alternative solution to the private landlord. I mean, I genuinely don't know, and I agree with you entirely on the pressure that that will be placed on the court system.

[00:38:23] Andy Graham: I've got left from my desk here about a particular tenant in case, and there it is at 16,000 pounds and it's taken. I think, uh, so somewhere up to maybe nine months just to get this far. And I know that we are gonna get awarded that and costs, but this particular tenant just won't have the means to pay for it now because it's been left to go on for so and so. At the end of the day, whilst we will win in court, we haven't won at all.

[00:38:45] Russell Quirk: Yeah. Which to that Renter's Rights Act, and they should have been a bad tenant list included as a provision where you can have a list that obviously with evidence and merit, you can add like a credit report on bad payers. You can have a bad.

[00:38:59] Russell Quirk: Tenancy report. So if that tenant has misbehaved, antisocial behavior or hasn't paid, there should be a separate register of poor tenants so that as a landlord you can search that register and say, ah, right. Okay. Well, Mr. And Mrs. Jones are terrible tenants, it seems well. I won't accept them then. I mean, what, what's wrong with that? If we can do it with people that don't pay their car finance or their bank loans, I mean, why can't we do it with crappy tenants?

[00:39:24] Andy Graham: Well, and there is gonna be one for landlords. Landlords are gonna be on a new register. And also, well, I mean, there's just so many different facets to this and so many different problems I think are gonna find their way of washing out in all of this in reality.

[00:39:37] Russell Quirk: But, but you know, the good thing, Andy, the good thing is this government, and again, I'm being purely political here, and I think my view here is shared by about 80% of the country. This government in 2029 or maybe before, depending if there's an economic collapse, they will not get reelected. Whether it's Andy by Angela Rain or West Street or Ki Star's, uh, leader of the Labor Party.

[00:39:56] Russell Quirk: There will be a new show in town and I suspect whoever that is and I hope it's reform, whoever that is, will see a lot of changes. To specifically landlords amongst a million other things. But if I had my way, believe me, one of the first things we'll do is to roll back some of this ridiculous legislation.

[00:40:15] Andy Graham: Mm-hmm.

[00:40:15] Russell Quirk: Start again, but do it in proper consultation with landlords, people like you

[00:40:20] Andy Graham: mm-hmm.

[00:40:21] Russell Quirk: And Ben Beadle and so on. And actually do something that is foresighted sensible and that actually meets the benefits and needs of both landlord and tenant on a proper balance. So this is temporary, I think is what I'm saying.

[00:40:35] Andy Graham: I think that that will. Whilst it doesn't necessarily solve the problems that we are dealing with right now, give a lot of our listeners a lot of reassurance. One of my questions today for you was, what do you think the future looks like? And I think you've probably answered it in roundabout way there, Russell, which is, this is transient.

[00:40:51] Andy Graham: And then it almost certainly will get better. And I think I agree with you because. It has to, it can't not get better because there has to be a solution to the private rental sector. It's not something that we as landlords just decided to make. And it's not just the case despite the, the narrative in the public domain that.

[00:41:11] Andy Graham: If all the landlords disappeared, the housing would suddenly be cheaper and everybody could afford to buy their own house. That's clearly not actually the solution to more people getting on the housing ladder. We have to build more homes, but it is reassuring, at least to hear that this is more likely to be temporary than anything else and that this stuff, a lot of this could be changed in the future.

[00:41:34] Andy Graham: I think this has been a really fascinating conversation. Russell, and I'm sure for a lot of our investors who listen, the landlords that listen to the show who are thinking about the future, there's plenty of food for thought here. I mean, in fact, I know another question I want to ask you, but before I do, before I move on, just from the Renter's Rights Act yet, and on the point of unintended consequences, can we just on the tenant specifically for a moment.

[00:41:58] Andy Graham: Is the tenant, the ultimate payer here, Russell, because as I, I look at this as a landlord and I look across my business and I, and I think, well, there's more risk here now, and I'm paying more for that and I'm paying, and I'm getting less back into the account after I've paid all my tax on that. That's gotta come from somewhere.

[00:42:13] Andy Graham: Well, the only place that it can really come from is the customer that we operate with. And that's the rent going up. Yes, there are gonna be some controls on that, but is this obvious or is it not obvious?

[00:42:23] Russell Quirk: Look, there's a definitely an element of this being counterproductive on the basis that landlords, whether they're small, medium size, or institutional, need a return both on CapEx and on yield, right?

[00:42:34] Russell Quirk: So if that return is too small to counter the risk of being in that. Space in the first place, then yeah, people are gonna exit. Or indeed, yes, they're gonna have to increase rents, which means that the tenant ultimately pays more. So yeah, the, the tenant's bound to be the ultimate payer, right? So if all those landlords are in a place where they're disadvantaged, then they're gonna squeeze the tenant, and the tenant is gonna be the one that's disadvantaged.

[00:42:57] Russell Quirk: And it's a captive market, isn't it? So don't forget that. There is always this debate about whether people should be a tenant or an owner. And some people choose, right? So some people choose. I mean, at the moment, although I own a property that I rent out, I'm currently renting myself, I'm actually a tenant.

[00:43:12] Russell Quirk: But because I choose to, because I decided that I didn't wanna pay a hundred grand for the stamp duty on a house a couple of years ago, that I'd wait for the market to settle, which was the right decision. But my point is I'm making a choice to be a tenant. Not everybody's in that position. So a lot of people that rent, as we know, arguably, particularly in HMOs, are in a position where they have to, so.

[00:43:30] Russell Quirk: If rent prices went up across the board by, as we saw kind of during and post COVID by 8 to 10% per annum, those tenants have got no choice but to pay that money, right? Or to move a hundred miles further out where perhaps the local economy and the, the kind of property market dynamic is different. So, yeah, of course the tenants the ultimate payer and, but somehow we gotta get away from this notion through the media and politicians that the landlord is squeezing the tenant either a.

[00:44:00] Russell Quirk: To be vindictive. I mean, that doesn't happen or they're doing it to make huge profits. Now, I've long been an advocate of this phrase, which is profit's not a dirty word, right? Nothing wrong with profit. Profit makes the world go round. Capitalism to me is not just a wonderful thing, but it's bloody essential.

[00:44:17] Russell Quirk: Otherwise, look, we would still be, I guess, in Mud Huts and using. Horses to plow fields for our food. So capitalism should be embraced. But there's a misconception, of course, that a landlord that's seen a 3% rise in their property value every year for the last three or four years, and maybe a three or 4% yield after costs, and god knows where else that they're fat cats.

[00:44:38] Russell Quirk: And that's what needs to change. Quite how we do that. I don't know. But look, again, I'd come back to the employing a good PR agency, which would be me, by the way. Look, there's my plug. Yeah.

[00:44:49] Andy Graham: Well, Russell, I mean, before we wrap up, I'm gonna employ you to leave us with some inspirational words, some words of motivation and encouragement during these challenging times for our listeners who are building their portfolios, who are passionate about this like I am, and who wanna do things in the right way.

[00:45:06] Andy Graham: What advice would you share right now? What should they be doing? What should they be thinking about? How should they be approaching their businesses?

[00:45:13] Russell Quirk: Okay, so look, I think firstly just be patient because as you said, as we've said, things will change, right? And if we end up with a more entrepreneurial government, then I think landlords get the benefit of that significantly.

[00:45:25] Russell Quirk: I guess the other thing is, despite all we've said, and that there is a lot of doom and gloom around the PRS and HMO investment, because of that repeated. Clubbing of the landlord by successive governments when you actually analyze property as an investment versus a lot of other things. So whether it be precious metals or the FSE or mixed funds or whatever.

[00:45:50] Russell Quirk: Even what I called alternative investments in front, if I did a video on this recently, looking at things that were a bit out there in terms of investments, so things like classic cards, number plates, Birkin bags, wine, whiskey, and so on. Seriously, all of those things provide you a decent CapEx return. But obviously none of them provide a yield really.

[00:46:11] Russell Quirk: And obviously stock market investing does. So you get a rise in share price and a dividend. When you strip everything else away, despite the pressure on landlords, despite increased cash collection by governments and despite increased regulation, pressure, investing in property is still a very, very good thing to do.

[00:46:31] Russell Quirk: So it might not be brilliant like it was, uh, we said at the beginning of this conversation, Andy, 20 years ago, right? Where it was the wild West to do what you want and it was all great. It's gone from being brilliant to good in my opinion. And here's another quick analogy. I did a thing at the Property Investor Show, which I'm very involved in now, back in October I think it was, and I hosted a, a panel that was about the buy to let market, and there was a guy in the audience right at the front.

[00:46:56] Russell Quirk: He got there early. He obviously wanted to have a bit of a go. And I dunno why he wants to have a go at me because I'm a massive landlord supporter. But anyway, he said, look, I'm done. I don't wanna do this anymore. I'm a landlord. I've got seven properties. I'm being squeezed. I'm just, he said, excuse me if I swear I'm pissed off with this, I'm gonna sell the lot.

[00:47:13] Russell Quirk: And I said, wow. Okay. That's quite a big move. This was a few months ago, obviously before the Rent's Rights Act actually came to pass, but there was a lot of noise around it and a lot of negativity. We kind of debated for a couple of minutes about the rights and wrongs of investing in property, whether the sector was dead or not.

[00:47:28] Russell Quirk: But here's where I got him, right? And here's the logic. I said, okay, so you've got seven properties. How long have you owned them? And he said, oh, well, since the nineties, most of them. He said, I picked them up over the last 20 or 30 years. I said, okay. And you are working out yield and future CapEx based, presumably on the value of those properties today.

[00:47:47] Russell Quirk: What would happen if you went back and actually worked out your CapEx increase? And your yield now based on what you actually paid for those properties, whether they got a mortgage or not, took off the interest and so on. I said, firstly, I suspect your return on a property you bought 20 years ago that's now worth 300 grand and was worth a hundred grand, then you are now making a yield.

[00:48:10] Russell Quirk: Based on that a hundred grand, which is three times better or thereabouts than the yields you think you're making because you are basing your yield on today's value. Right? So that's an amazing return that you probably haven't really thought about. I said. But also, let's say you sell your seven properties.

[00:48:26] Russell Quirk: Let's say they're worth 300 grand each. You're gonna end up after fees with 2 million quid in the bank. Unencumbered, great. Where you put in the money. I said A, you gotta pay CGT. Secondly, you're probably gonna pay tax on the way into any other investment. If you put the money with Harley's land down, they're gonna charge you 3% to manage the money.

[00:48:41] Russell Quirk: They're gonna do that again after year one. Again, after year two. If you put it into most things, you are then on the exit gonna pay CGT again. So you're gonna pay CGT of 40 odd percent twice. Now. Do you wanna still change your uh, sell your portfolio? 'cause we said when. Okay, I'm gonna think again. So in a very longwinded way, added that is a lesson to people that have owned property for a long time that are moaning about terrible governments over the last 6, 7, 8 years, where landlords are concerned But put it into context and perspective, it ain't that bad.

[00:49:13] Andy Graham: You know what? I think that that is a perfect way to end the show. You can be a testament to this. I didn't ask you about anything in advance of recording this. I didn't try and influence any of your answers to any of these questions, and I think you've summarized that perfectly and exactly how I feel about Russell.

[00:49:29] Andy Graham: You've gotta have a long enough time horizon, opinion and view on investing in property. If you don't have that, it's not the right investment model, in my opinion. Look for some returns that you can maybe crystallize in a shorter timeframe, but. Look at historic performance. Look ahead. Everything has changed.

[00:49:46] Andy Graham: Nothing is quite as good as it was a few years ago. You only need to go into the local shop and pick up a cream egg to see that looks. It feels a bit smaller in your hand than it costs more. Nothing is quite as good as it used to be in property. Sure is one of those, but what else are you gonna do? Okay.

[00:50:02] Andy Graham: And it's still asset backed. It's still secure it. We're still an island. We still need housing people still. Need to live in a good quality accommodation actually, despite all of the noise, um, good tenants do value good quality accommodation, and I think there's still a really important role and a really rewarding role for people like us to deliver that in the private rental sector.

[00:50:24] Andy Graham: Russell, it's been an absolute pleasure having you on the show today. For anyone who wants to find out a little bit more about you, maybe come and keep an eye on what you're doing, follow you, come and listen to you in other places, maybe even hire your PR services. Where are they best to go to?

[00:50:36] Russell Quirk: So I'm probably most contacted on LinkedIn, so to search my name on LinkedIn, I'm on there a lot. If you want to get involved in a more political stance, then that's X Twitter, where I tend to have a few bun fights on a daily basis with people of political persuasion. So yeah, contact me and if you wanna get in contact, direct DM me through LinkedIn is probably easiest.

[00:50:56] Andy Graham: Thank you very much, Russell.

[00:50:57] Russell Quirk: Thanks, mate. Thanks for having me.

[00:51:05] Andy Graham: That's it for today's episode, guys. Thank you for tuning in. I hope you've enjoyed that conversation with Russell and I. I think there's a lot there from today's discussion for. Landlords for investors to think about, especially with the Renters Rights Act coming in and the market continuing to change.

[00:51:18] Andy Graham: For anyone listening, if today's episode has been useful, if you've enjoyed it, please make sure you are subscribed. That way you won't miss any of the future conversations like this. Please also leave a quick view of the show. Let us know what you think. Are we worthy. That beautiful five star review, but seriously, it helps us more than you could possibly know, and it helps us get the podcast in front of more people, which helps spread the message about all the great work that you guys out there in our community are doing for the industry.

[00:51:43] Andy Graham: And finally, if you are thinking I could do with more clarity, better systems, or the right support around me to build and run my HMO business, then that is exactly why I built the HMO roadmap. Just head to the HMOroadmap.co.uk. Now, you can join instantly and you can find. All of the details that you need in the show notes below, trust me, it'll change the game.

[00:52:03] Andy Graham: If you wanna level things up, if you wanna scale your property business up, that is where you need to start. Russell, thanks again and thank you to everybody for tuning in today. Don't forget that I'll be right back here in the very same place next week. So please join me then for another installment of the HMO Podcast.