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Graeme

London Property brick and trowel

What the heck is wrong with the property market?

By | Opinion

Brexit, the London Property Market & What Can Be Done

An unprecedented environmental change will inevitably lead to unprecedented events within the property sector.

Brexit’s effects on the property market so far have been just that, unprecedented.

As the possible deadline of March 29th draws closer and for that matter any extension therein, the compounding effects upon the London property market become more evident.

And the uncertainty in the market is growing undoubtedly more exposed.

UBS analysts have noted that in previous cycles of property downturn, a London downturn had preceded a decline in the broader UK market.

However, this time this appears not to be the case. The London market downturn is happening while regions of the UK continue to grow.

What are the possible reasons for this?

A Royal Institute of Chartered Surveyors (RICS) market survey uncovered three significant points regarding the London Property Market;

1. Compared to regionally, London respondents report the most significant fall in house prices (RICS September 2018)

2. Negative price trends across London with price softening being led by London (RICS January 2019)

3. Buyers are now more cautious, and new buyer enquires gauge fell to -21% in November 2018 (RICS November 2018)

These three key points demonstrate how the uncertainty generated by Brexit has spilt over into the property market in the capital. However, as previously mentioned this remains isolated to London.

The same report indicates that regions in the North and Midlands of the UK are on the rise. It poses the question of what is different in the UK market, or more importantly why?

What is driving sales and prices up in these other areas of the UK?

Considering the RICS report, we can extrapolate that the UK buyer mindset is currently tending more towards caution. Coupling this with the naturally high prices of the London property market could explain the drop in interest.

However, the same report states that the rental market is currently booming. A point reinforced through Gov.UK figures which show London private rental increasing 1.6% compared the rest of England.

Demonstrating there is still an opportunity to be had in the London market. However, the wrong market could be being targeted.

To compound the problem of wrong markets being targeted are the London mortgage lending patterns. Gov.UK state a major issue in new buyers in the capital is the loan to income ratio.

The Bank of England will only permit 15% of lenders new mortgages of a ratio which exceeds 4.5. With the average first-time buyer having a ratio of 4.04 (movers 4.01) and as this is on an upward trend the issue is certain to persist for private buyers.

Essentially this means if intending buyers can’t borrow. Also, they can’t buy, which opens up a pipeline for developers and estate agents alike.

Will synergy help?

Is synergy possible with mortgage brokers? Or could a second option explored of an extended London market rent to buy scheme?

However, this again suggests a shift of the targeted market for the purchasing of London property.

Multiple developers in the capital are seeing uptakes in business. For example, Derwent London has raised its dividend as it starts to make the most of the commercial property market.

Further external investors have started to quietly enter the market for London properties. In particular, German real estate giant Grand City Properties SA. They have recently undergone a property buying spree. One of which was a purchase of 117 apartments in 159-uni Hill House. Their current investment alone is present at 800 properties as of February 2019 (Independent 2019).

There are opportunities within the London market

There are demonstrable signs that there is development opportunity in London.  And further that there are still parties that are more than interested in London properties. However, a perspective change may have to take place.

Secondly, what you need to consider are developers activities when they conduct on the ground post-purchase.

UK developers should take note and monitor these signs. In particular, market leading FTSE 100 giants are currently tanking more than 20%. Persimmon has seen a rise in sales. However, this is predicated in the help to buy scheme. Fears surrounding the continuation of this has again recognised the giants share price fall.

This proposes interesting questions. What is it that these developers plan on doing, or are doing? And which is being missed by the significant host of national developers?

One theory is the commercial property. However, a more realistic thought is that they may be turning properties of a different ilk to residential properties.  To meet the differentiation of supply and demand in the capital.

So what effect will this have on the post-Brexit landscape in London?

Uncertainty could also mean opportunity

Naturally this uncertainty and seeming negative environmental pressures are causing problems for business operating in the market. However, within uncertainty opportunities are very much available. Provided it is backedup with the correct industry knowledge.

All firms associated with the market, be they estate agents, mortgage brokers, developers etc. need to recognise that although the market appears is on a downward trend. The correct application of industry and competitor knowledge could catapult them into market dominance.

This is because with industry knowledge business can start to identify consumer pain points associated with the property market.  Then allow them to start to plan actionable plans to address these and re-stimulate growth.

To gain this insight, however, will take expertise.

Be Powered by Intelligence

Utilising Intelligence services can leverage key industry consumer and macro environmental insights to construct an exceptional value proposition for customers.  And thus, a sustained competitive advantage in a market which is currently stagnating and falling.

So, do you what more answers to the questions you need to ask? Get in touch here or follow us on Twitter

boy next to a wall What is Competitive Intelligence?

Good to great questions

By | Intelligence

Great questions are the best way to create great intelligence.

However, it’s not just a case thinking up a smart question to catch all about a competitor or market.

You have to guide the decision maker to take action.

What do I mean? Well, rather than asking:

What are competitor X’s main strengths?

Ask it like this:

What can we do about competitor X’s strengths?

Arguably, given time and a greater situational understanding, you will be able to come up with an even better question.

But you will see how a subtle change in the question transforms a concerning situation to proactive decision focused intelligence environment.

And that’s the power of Intelligence.

We have a saying at Octopus “Intelligence is just knowing” so, we offer a daily short and sharp intelligence based thought with an aim to help your day to day work. Feel free to sign up here:

 

www.octopusintelligence.com

 

So, do you what more answers to the questions you need to ask? Get in touch here or follow us on Twitter

Boy in green

Can early warning systems help you?

By | Intelligence

Can early warning systems really help you? Well, if you are going to get a kick in the groin it is always because to see it coming.  So you can get out of the way.

Everyone should have an early warning system. Because it is an excellent way to understand situations you may be facing in the future that can affect you. And then be in a strong position to do something about it – As we know from experience surprises are rarely pleasurable.

So, the first thing to do is map out your competitive environment, think about who you want to keep an eye on and who could be future competitors.

As you can’t monitor everything take each competitor in turn. Conduct an assessment of the impact they have on you and your current/future performance. — The more significant the potential situation, the higher the priority.

Detect Changes

Then take a look at how you could quickly detect and define any changes with each target. Find people in your team who are best placed to find the information quickly.  Have an understanding of the clearly defined signs.

Collate the data you find into a single source (CI software or just a spreadsheet). You will be surprised how much useful information is out there – and how many new questions need answering!

Critically, once you have looked at what they are up to you turn the data into usable intelligence using analysis. Techniques such as Competing Hypothesis or Scenario Analysis are great tools for this.

What can you do about it?

For each piece of insight, you need to decide what you are going to do about it.

For instance, if company X purchases X product, please let us know straight away.  Have a handful of predefined associated actions, one of which could be of course to do nothing.

These actions should take into account the situation you find yourself in and the capabilities and resources you have to hand. For any actions taken it is important to understand how your competitor will respond. Again, making you even more prepared and perhaps unbeatable.

Pretty soon you will be in a position to be able to predict your rivals next move.

That’s why we say “Intelligence is just knowing…

www.octopusintelligence.com

So, do you what more answers to the questions you need to ask? Get in touch here or follow us on Twitter

Intelligence briefings

By | Opinion

When developing a senior management intelligence briefing, the writer must understand what interests them. Sounds obvious, but I have seen real examples of reports from the military in the field which were not read by anyone. 6 months and many millions of pounds spent before anyone noticed the information was no longer required. Also, you need to understand how much detail the reader wants to see.

Otherwise, the reader will gain no value from it. Do they want specific information? Alternatively, do they prefer a “high altitude” strategic level briefing with an ability to ask more detailed questions? The intelligence brief should not be a regurgitation of media reports with associated hyperlinks. The brief requires thought not just media monitoring software. Leaders should ensure that the first thing they do each day/week is to study their intelligence briefing. It should form what they are doing and deciding that day/week.

However, there are still companies who don’t use intelligence and rely on instinct and experience. Riding a bike blindfolded carrying a box of fresh eggs is easy to do until they hit a pothole in the road or have to turn a corner: bumps, bruises and egg on their face.

So, do you what more answers to the questions you need to ask? Get in touch here or follow us on Twitter

Are products circling to the bottom?

By | Opinion

Are products circling to the bottom? Have you noticed that a company comes out with a great new product or a musician has a smash hit album, and their customers love it?

Then their competitors start the race to copy what they have done? This copying may explain the number of Ed Sheeran clones around at the moment and why Apple is between a rock and a hard place.

The trouble is with this plagiarism becomes the industry standard very quickly, and the reduced impact on the then delighted customer. They shrug their shoulders and get on with it.

So then, the company with the original idea has a set of customers with even higher expectations and thus have to innovate to keep up.

Intelligence helps companies like this to jump three steps ahead of the competition, isolate weaknesses in current offerings and predict what is going to happen in the future.

So, do you what more answers to the questions you need to ask? Get in touch here or follow us on Twitter

Change is risky

By | Opinion

Great ideas take time to establish themselves. According to Seth Godin in this excellent new book, ‘This is Marketing’, it is because the best ideas require significant change. They fly in the face of the status quo and inertia is very powerful.

Great ideas create a lot of noise and distrust. He says “Change is risky and that’s why some companies want others to go first to test the water.”

Smart companies use intelligence to reduce uncertainty and the consequences of risk allowing you to have a clear head to make better decisions. Intelligence can also determine how successful your great idea could be before committing millions and risking brand and reputation. Intelligence tells it how it is and provides a bedrock of certainty upon which to build decision making and future proofing strategies.

So, do you what more answers to the questions you need to ask? Get in touch here or follow us on Twitter

boy next to a wall What is Competitive Intelligence?

What is Competitive Intelligence?

By | Intelligence

What is Competitive Intelligence?

It’s knowledge about your competitors, your market and your customers which is not readily available. And, it’s the information you need to dig a little deeper to find, often in places people where don’t want to share. It’s asking the questions to get the answers you really want to know. Also, it helps you make decisions and take action relying on more certainty, rather than guesswork and dated assumptions.

So, do you what more answers to the questions you need to ask? Get in touch here or follow us on Twitter

Cyber security mega-breaches on the horizon?

By | Opinion

Security breaches typically with vast cost to a company. Even a mid-size organisation can rack up multiple millions to rectify damage from just one breach.

Data breaches are even more expensive, triggering sudden lack of trust in customers, which can take years to regain. Depending on location, fines can add to the cost. In the UK, for example, the ICO (Information Commissioner’s Office) is sharpening its claws, preparing to fine offending companies, punishing them while swelling the Treasury coffers.

Smaller, but significant, breaches may not even hit the headlines

In 2019 we will see more mega-breaches. It is likely that this will, ironically, mean that smaller, but significant, breaches may not even hit the headlines, to some extent “normalising” the event.

With all the cyber security available there is one weakness that cannot be managed by automation: people. People will continue to make mistakes and people will continue to be repetitive and lazy in the way they do things.

The biggest threat, however, is not the individuals that form a user or customer base – it is the apathetic approach of many business leaders, the belief that “it” won’t happen to us”, because they have the latest cyber security system. Cyber security systems are all very well, but is naïve to over-rely on them.

They only have to be lucky once

Hackers will always be one step ahead. They know what they are going to do and how they intend to break in. As with terrorists, hackers just need to be lucky once, whilst the authorities need to be lucky every time.

Yes, businesses should have software with the best bells and whistles, but their security professionals will next year need to actively go on the attack, and be more vigilant than ever in analysing the latest hacking trends.

An Intelligence led approach to Cyber Security is required for 2019.

Ask questions like:

So what?
How are they going to hack into your system?
Why they would want to steal your information?
Who will want to hack into the system?
What do we do to stop them?

Artificial intelligence, mighty machines and powerful robots

By | Artificial Intelligence
We read many articles and watch adverts proclaiming the virtues and threats of Artificial Intelligence.
I have a number of thoughts on this subject.
To start, the term Artificial Intelligence “AI”.   is not even named correctly.
Also, if you think about it, a ‘computer’ is a pretty terrible name too.

AI isn’t Artificial or actually Intelligent

Our point is that AI isn’t Artificial or actually Intelligent.
It’s a vastly expanded and sophisticated version of the same digital processes that apparently powered astronauts to the moon in the ’60s. Conspiracy theorists would suggest this logic applied to all things digital would mean that we would have an opportunity to live in moon based cities by now.  And yet we have not been back since… Interesting, I wonder why?
We are already enshrined in algorithmic predetermination.
For example, the number of people who will see this article is subject to an algorithm that assumes and prepositions everyone’s exposure to everyone else.

Who decides what news is anyway?

The algorithmic influence of who sees what is not within the purview of the actual reader.
In past times we decided what to read through personal choice (or at least the perception of such) as to what they listened to or watched on radio, TV and what newspaper they read.
Oh, those heady days before anyone started to ask questions such as ‘Who decides what news is anyway?’
So little wonder we remain unsure, removed and confused (look at almost any aspect economic, political, social, spiritual, sociological existence).
Technology has done wondrous things, good and bad.  Are we sure we understand it all yet?
Also, we don’t yet have the track record to safely programme something that will not make the errors of judgement that humans make.

Humanlike traits

Humans are subjective, and machines are objective.
AI is merely an extension of data processing. It’s a series of ‘1’s and ‘0’s that work tirelessly without rest.
Without any humanlike traits, they will become the exponential total of the base programming instigated at the outset.
Implementing AI should be in a manner that is truly pure, truly sacrosanct and untouched by any self-interest, politics, profit motive or short-term gain.
So assuming such a means could be found.
Moreover, which it almost certainly can’t or won’t, could it also be free to serve humankind in such a way that it can just as easily be accessed by everyone.
People in underdeveloped economies as well as global companies, by states, by anyone, anywhere anytime.
If so, what would such a resource look like? What would it be able to do and how would we even get that far?
Moreover, where would the investment come from without the interest to investors being enshrined?
Is what we paint as progress such, as students embark on university courses, happy to sign up to substantial financial indebtedness to find that upon qualification, their subject matter has moved on and their qualification is already outmoded or soon will be.

Change and progress

Many people think that change and progress are the same things.
Are we endlessly questing for change and calling it progress?
Essentially, it is people who make the mistakes; machines only do what their program commands.
In a world of people and machines, humans are advantaged by many things; machines will augment us and machines will advantage us.
However, until we have mastered our capabilities dare we allow machines to self-learn and make immensely faster judgements and determinations based upon perceptive judgements.
It could rapidly become vastly alien to those of humankind?
We are already so reliant upon technology that cognitive reasoning, decision making and free choice are becoming perishable skillsets.
And inundated with information while knowledge is getting scarcer by the microsecond.
We are so far away yet from mastering our potential, why should we distract ourselves from what we are each truly capable of by defaulting to endless technological alternatives that are decades if not centuries away from aspiring to be a fraction of what a human being can be.
Also, we ought to use our organic computing systems, we each have one to think this through, and we don’t need artificial intelligence when we have intelligence.

‘John Connor Defeats Skynet’

By Darrell West
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Military Intelligence

Military intelligence lessons

By | Intelligence

Before reading this article, written for the SCIP magazine, you may be expecting many useful Military Intelligence tools and tips. But films and TV don’t offer an accurate reflection of military intelligence.

The reality may seem so much more mundane because the best tools used are your mind, your attitude and simple common sense.

That said, there are many skills involved in the Military Intelligence field which are relevant to life within the commercial world.

The Military teaches us that when the chips are down, instead of panicking, have a cup of tea.

Strap on your pack, pick up your rifle, give your teammates some banter and get on with it.

It may be a British thing, but if you are struggling to find information, have a laugh at yourself. Call yourself a name and get back to it.

Choose the right team with the right skills

The first military lesson is to ensure that you have the most suitable and highly trained team possible to match the situation being faced.

In the military, you would not have an SAS Troop tasked to feed five hundred people.

You wouldn’t give the job of breaking an embassy siege to the Women’s Royal Balloon Corps just because they were around the corner and had just finished another project.

It may sound funny, but this sort of mismatch is seen all too frequently in the corporate world.

Marketing assistants may be asked to look for competitor information or to help find someone to do competitive intelligence for them.

A quick google search may be undertaken with the assumption that this will give enough intelligence.

Quality intelligence, where the right questions are asked. Where the best tools are used, which goes deep and turns over every stone, is the result of many years of training and experience.

The 7 Ps

The military has a saying “Prior Preparation and Planning Prevents “Particularly” Poor Performance.”

This teaches us that real leadership is to ensure you have a well thought out plan which includes a “don’t give up” attitude.

Nevertheless, the military also teaches us that sometimes you have to change your plan when situations on the ground demand it.

If you are unable to do this, sticking rigidly to what you were told to do, then you will soon lose the respect of your team, or worse.

So, if you are trying to collect information and it is becoming impossible, change the way you are doing the research. Approach the mountain of information from a different angle.

Accuracy

Accuracy is a crucial demand within both Military and Competitive Intelligence. Especially if there is a good chance that what you create could be used in the field. In the military, intelligence has to be accurate, or it risks lives. Lives of people and their families you will never meet.

Walking hand in hand with accuracy is common sense and the ability to think quickly and calmly.

You can only do this if you are confident in your ability, are well trained and experienced. The same applies in the commercial world.

Presenting tools

In the military, there is no better example of how important it is to get your message across. To people who need to decide what to and those who are tasked to do it.

Imagine the eve of a battle and the general stands up to address his men.

Armed with Intelligence and a plan, he outlines how he is going to defeat the enemy.

He realises that his troops and commanders will have difficulty in understanding the environment they will be fighting in.

But not to worry, he is prepared. And he reveals a fantastic PowerPoint presentation and a SWOT diagram! Teams have to get into breakout groups. They discuss the plan and isolate what the intelligence means to them.

As you can perhaps understand, this is going to worry the troops, who like to know which way to go and what to shoot at.

As discussed already, the military uses orders, Standard Operating Procedures and they are highly trained.

To keep it simple, the general delivers a succinct, inspiring message. A message everyone understands and replaces the SWOT diagram with something called a Map.

Map are simple to understand and, when in the battlefield, maps can be drawn in the sand with features recreated with pebbles and bits of stick. A 3D map called a model.

From these maps, commanders in the field build models of specific areas and buildings they need to focus on.

The military teaches us all to keep things simple, work as a team and prepare well.  And, in order to ensure we know what to do and where to go, use a map.

Continued.

The full article can be found here and was written for the SCIP Magazine by Graeme Dixon and Darrell West of Octopus Intelligence. www.octopusintelligence.com