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New Years Resolution 2011.1 – watch no broadcast TV

Posted by Mark Harrison on January 3, 2011

Yes, I know it’s the third of January, but various things have come together recently to make me resolve to watch no further “direct to air” TV in 2011.

Do I want to watch a show like this?

Over Christmas, we caught up with some old friends who we see once or twice a year. One of them told us about a friend of his, who has now added a second world record.

He was (and I hope I’ve got these the right way round) previously the holder of the “deepest dive by a blind SCUBA-diver” record. He is now, additionally the “fastest blind waterskier towed by a blind speedboat driver.”

He applied to a TV show in a which a “Celebrity Survival Expert” was to take people with disabilities on a trek somewhere remote. He was turned down because he was deemed too able, and apparently disabled people FAILING TO COPE would make better TV.

Do I want to watch the X-Factor?

Chris Dillow makes the case that I should care about the X-Factor, albeit because it exemplifies so many things that are sadly true.

So, am I no longer watching anything?

Video (by which I mean TV, film, DVD, downloads, irrespective of channel) is a classic example of how specialisation in the West Economy over the last few hundred years gives some stunning results. Take any recent blockbuster film – hundreds of people spending tens of thousands of man-years and tens-hundreds of millions of VC money…

… to give me something that I can have for a fiver.

There is truly great stuff out there. Personally, as someone who hid behind the sofa in the 1970s, I think that the re-birth of the Dr. Who Franchise is great, (and my children love the Sarah Jane Adventures spinoff, to the extent that the Season 3 DVD was the only thing my 6 year old actually asked for as a Christmas Present). Watching the “Christmas Carol 2011 special” was a great use of an hour!

But, it was the iPlayer version I watched, last night, rather than whenever the channel actually decided to broadcast it.

This is the point – I was able to choose to watch that programme AFTER it had been broadcast, and, more importantly, after I’d had enough feedback about it to decide it would be worth watching.

I have a complex mesh of getting recommendations about things – Amazon’s customer reviews are mixed enough to make me believe that they are authentic, not puffed up pieces by PR companies… and of course, the blogs to which I subscribe, and the people I know and meet in “real life” (That phrase needs quoting – it’s as if, somehow, only fake people talk on the Internet?)

But, the resolution – no broadcast TV in 2011 – is the first I’m publishing this year. Feel free to track my progress.


Posted in Investor Psychology, Personal Development, Productivity | Leave a Comment »

Top Gadgets 2010

Posted by Mark Harrison on January 2, 2011

Every couple of years, I post about what bits of technology I actually use. The last one was Top Gadgets 2008.

I’ll come back to the 2008 list (and even the 2006 one) in a moment, but first, the top things I started using in the last two years.

The 2010 list

1: The iPhone. I held off against SmartPhones for a long time (read my rant in the 2008 post!), but finally got an iPhone 3GS late in 2009. It has, as you’d expect, the Mac-like qualities of “Look, the thing just works”, and “Joy to use.” I got a long (2 year) contract, since I don’t change handsets often. Maybe come the end of 2011, I’ll change it. Maybe I’ll see whether there’s a deal I can get on my monthly charges to stay with it, though I am vaguely keeping an eye on the way that Android is developing, and maybe that will be the best option. Ask me again in a year’s time. The app I most use is the built-in web browser, and it’s that “always connected to the Internet” that has made a difference, but see below as well.

2: GoogleMail. We’ve run our own mail server for at least 8 years. We used a variety of front end software (Outlook Express, Thunderbird.) A while back, however, I registered a GoogleMail account, mainly  because I intermittently needed something that I could access from client sites which blocked access to my own mail server. Over time, Googlemail’s front end has matured, to the extent that I now find it better than any desktop mail software I’ve used. So, we each registered GoogleMail accounts, and our trusty server stopped storing all the mail, but got set up just to forward any mail we got to the right Google account. When we got the iPhones (see above), this also meant that we immediately had access to our mail from them.

3: Evernote. Yes, that’s right – two of the top 3 positions are taken not by hardware gadgets, but by web-based software. The old model of “Software” being something that you install on a particular computer, and can then only use on that computer is gradually fading, at least as far as my life is concerned, with the “Software As A Service” (SaaS) model taking over. If the only “installation” required is going to a web browser and typing a URI, then great! Evernote is a “big bucket” into which I’m putting things – photos I snap on the way, articles I write that are works in progress, chapters for my next book, things I see that I need to remember. Yes, there is software that installs on my Mac for the odd thing, but mostly I use the EverNote iPhone app. (There is also an Android app.)

4: Bookcases. There is a quote, which I believe is originally from Brain Tracy, that reads “Poor people have big TVs, rich people have big libraries.” The Mark Harrison quote, which I now have my children saying, is “There’s always room for another bookcase.” In the process of writing this blog post, I’ve run round the house, counting, and made it 50, (which does include custom-bookcases made for specific places, but does not include shelves mounted to the wall, or a window-sill full of books.) The majority are IKEA Billy, representing a lot of bookcase for the money, but we’re gradually moving to custom-made to fit particular spaces. At some point I will write a longer post on the subject, explaining why I’m resisting the move to ebooks. The antilibrary (Google is your friend, but again, another post for another day) is also growing nicely.

The 2008 list (where are we now?)

1: The Mac Mini. It was only going back to this list that made me realise how long I’d had it. It’s the computer I’m typing this on, and I’m still glad I got it.

2: The Drobo. The Drobo is still in use, and storing everything I need. It’s been joined by a DroboShare, that means it connects directly to the network rather than onto a computer (and shared by that.) This we have found great.

3: The ASUS EEE Pc. I’ve not used this for a year. I have found that most of the things I needed it for on the road can be done with the iPhone… and for those that can’t, there’s always a computer witha  full sized keyboard somewhere (client office, friend’s house, airport club lounge…)

4: The DVD Duplicator. Still works every time.

5: A normal, non-smart Nokia handset… see iPhone above.

The 2006 list (long term update)

1: The (2006 model) iPod has found a new lease of life in a docking station in the kitchen (we mainly eat in there as well.)

2: The Dell laptop is still in use. As I reported back in 2008,  the battery has long since failed, so it’s now in use as if it were a spare desktop PC.

3: The Domia Lite / Bye Bye Standby system. Still working well, still in everyday use.

4: The “Skype headset”. In 2008, I reported that I’d lost it, and now used Skype for text chats, rather than voice calls. This is still true.

5: Desktop software choices… Firefox, yes… OpenOffice, yes…

6: The aircon is an interesting one. We decided to make a concious effort to reduce our carbon footprint back in 2009, and planted up the south wall of the house with a bunch of climbing plants that would cast shade on the front windows during the summer (when the sun is high in the sky), but allow direct sunlight through in winter (when the sun is lower in the sky, and therefore comes in under the level of the plants.) This has worked remarkably well, and while we used the aircon in 2009, it was less than in 2008. In the summer of 2010 (which, to be fair, wasn’t that hot), we didn’t need to turn on the aircon at all! (We’ve taken it a step further over the winter of 2010/2011 and put masses more insulation in the loft, which has had a noticeable effect keeping the place warmer in winter, and hopefully will keep the upstairs cooler next summer as well.)

7: Yet another year with paper diaries – I do use iPhone reminders a bit now, but still paper diaries are that little bit faster when it comes to trying to arrange a meeting and need to scan a bunch of possible dates.

8: Really Useful Company 35 litre crates on custom shelving in the garage. Still there, still holding stuff that either we have a legal obligation to retain for years, or like Christmas decorations that is needed once a year or so.

9: The Satnav. For various reasons, we’re using them less. I think because we work far more virtually now, and don’t visit unfamiliar sites as much.

10:  The cars. The LPG  Volvo Estate is still a useful thing for carrying around stuff. In December 2009, however, it disgraced itself when the lock broke, and it took 10 days to get the replacement part (from Germany, for some reason.) We took the opportunity to buy another Morgan to replace the one that some fool crashed into in 2007. So, we are back to a three car family – the Volvo, the new 4-seater Morgan, and the 30-year-old Morgan Plus 8 that still runs stunningly, and puts a smile on the face of everyone who sees it.)

Posted in Technology | 7 Comments »

Social Housing – the outline announcement in the CBR

Posted by Mark Harrison on October 20, 2010

The Chancellor has outlined the top-level plan for social housing, following yesterday’s reports.

He made the point that, a decade ago, only 1 in 10 households living in social accommodation had someone working. But, as of last year, the figure had risen to 1 in 3. A tripling of the number of council house occupiers who have jobs… and this in a time when there are huge waiting lists.

He has said that existing council tenants won’t have any changes…

… but that new council tenants would be assessed, and potentially have to pay about 80% of market rent.


There are, at the risk of oversimplifying, two reasons for his doing this:

  1. Bluntly, the need to save money. The more council tenants pay in rent, the less that councils have to raise in council tax to pay for commitments.
  2. The logic is that, if benefits are “too good”, then people tend to stay on benefits rather than try to find work. If benefits aren’t seen as an easy option, more people will try harder.

Of course, as an entrepreneur, I still have some problems with the idea that we should “find work”, as if jobs working for other people were the only way to make a living. Personally, I’d rather see a focus on “creating value”, whether that’s finding an employer who lets you maximise and leverage your talents, or by setting up a venture on your own.

So, now we know the outline. It might be a good time to start talking to your local councillor about what the private landlord can do to help the situation!

Posted in Property Investment | Tagged: , | Leave a Comment »

Social Housing Budgets slashed – what would that mean for landlords

Posted by Mark Harrison on October 19, 2010

According to an article on the BBC, the Government are likely to announce major cuts, possibly as high as 50%, in the Comprehensive Spending Review tomorrow. The article also floats the idea that “council housing for life” may be cut, with council tenants re-assessed every five years, to see whether they still need help from the public sector.

Wordle: UK Government Spending review - social housing

OK, before we dive into the analysis, a few points to remember.

Firstly, this is just a story on the BBC. The CSR tomorrow may confirm it, but a common politicians trick over the last 10 years has been to leak an “extreme” version of a proposal, and then announce a reduced-scope version, which looks good in comparison. (I can’t complain, because the technique, when applied to negotiations, is called “framing the negotiation”.)

Secondly, even if it does go into the CSR in this form, there will still be political deals to be done. While it may appeal to the Tory faithful, there are a lot of Lib Dems who, while supportive of the need to reduce public sector spending,  would be very unhappy at the size of the cuts.

Thirdly, you can safely assume that Labour is in “new opposition, new leader mode” – at this stage in the electoral cycle they don’t actually need workable policies – they just need to criticise government policies to make people unhappy with the coalition. They can reveal actual policies of their own nearer an election. So, expect to hear criticism-heavy, workable-alternative-light speeches.

Fourthly, doing nothing is not an option. We are not in a situation where we can carry on as we were. Something needs to give – and if not social housing, then health care, education, or higher taxes, all of which have their own problems. Whatever is done, many people are going to be worse off than they were – because lots of debts that were hidden have been revealed, and need paying.

OK, so what would a 50% cut in Social Housing Budgets actually mean.

There are two separate questions we need to bear in mind.

Firstly, to what extent should a government subsidise services like housing. Secondly, to what extent should a government be in the business of direct provision of such services. (I’m going to side-step the question of whether I’m talking about local or national government, by the way, since to me the question of “which part of the public sector” is secondary to the question “public or private.”)

The first question – for the last 100 years, Western Europe has moved towards statism. Statism is when a government gets more and more involved in more and more things. The Conservatives argue that Britain has gone too far in this direction, and the government need to intervene less. Margaret Thatcher took things a very long way in the direction of non-intervention, to the extent that most people realised that there are things in which the government needs to get involved in order to have a working society. Labour, on the other hand, favoured central control and government regulation / intervention in more areas. (Except, bizarrely, high finance, which was left relatively unfettered!) Most votes in the UK, and in a democracy, it is voters’ views that matter most, agree that the government need to provide some sort of safety net, however the last election could be read as that many, many people think that the safety net is much too wide. As such, of all the things that might be cut, it’s maybe an OK target in the view of the majority.

So, it’s clear that social housing spend is an obvious place to be cut.

What about the second question – should the government provide things like housing directly. The generally accepted answer is that governments need to do two things. One, provide a framework of “rule of law” and “secure rights” in which the private sector can operate. Two, get involved in things that the private sector cannot or will not deliver.

These “things that the private sector cannot or will not deliver” broadly mean either things that have to be done in a consolidated way at a government level (for example, the army – we don’t want private companies having their own regiments!), or things for which it is so hard to divvy up the cost workably, that it’s sensible that they are just provided through general taxation. (With a few exceptions like the M6 toll section, and the London Congestion zone, think roads!)

Notice that I said divvy up the cost “workably”, not “fairly”. Social Housing is an area where, in practice, the tenants can’t afford to pay market rent. That, at least, is the theory.

There are, doubtless, many people for whom this is true. And it’s entirely right that the government need to be supporting these people.

However, there are, doubtless, many people for whom this is not true, but who have worked out how to “game the system”, and get a subsidy they don’t actually need. Maybe not as many such people as some papers make out,  but doubtless some. When I have a friend who works in a benefits office telling me that some of her clients make more money in benefits than she earns for working full-time, AND they have low-cost housing, something is clearly out of kilter.

Whether this means a 50% cut is sensible is another question, of course, but the general thrust that council tenancies should be reviewed every five years does strike me as fair. Likewise, it doesn’t feel right that a council tenant can bequeath their tenancy to their adult children! Surely, the government should be assessing the next generation to see whether they need the subsidy that our taxes provide?

So, what does this mean for property investors?

In the short term, not much. Whatever the announcement tomorrow, it will take a while for the ripples to come through. It’s unlikely that anyone will actually be kicked out of their homes this year – most likely is that harder rules will come in for new council tenants, and that (whatever is claimed tomorrow), things will gradually percolate back up to existing ones over the next few years.

There’s an opportunity there, though – namely people still need housing, and if the government isn’t providing, the private sector will need to. So, there may be a new wave of private tenants coming onto the books. HMOs may prove to get a new lease of life.

Keep in touch with local letting agents – make sure that you understand the tenancy-demand mix in the areas in which you invest. Don’t assume that the mix will stay the same. Of course, you should be doing this anyway, but this is a particularly turbulent time, and one where fortunes will be made by understanding which bits of the market are in for a boom.

Posted in Uncategorized | Tagged: , | Leave a Comment »

Gazundering is back, so why don’t you do something easy to stop it…

Posted by Mark Harrison on October 18, 2010

If you’ve read my book, you’ll know that I don’t like gazumping or gazundering. This is because I believe that, once I’ve agreed a deal, I should stick by it.

In case you’re reading from outside the UK, these are two techniques that rely on the fact that it typically takes 6-8 weeks between verbally agreeing a property deal, and the lawyers coming up with contracts that can be signed, or, in the parlance “exchanged.”

  • Gazumping is where a seller agrees a price, waits 6-8 weeks while the buyer is incurring cost in the various legal / financial paperwork that has to happen, and then refuses to sign the contract unless the buyer pays, say, 5% more than originally agreed.
  • Gazundering is the opposite – where the buyer waits until the last moment, and then reduces his/her offer.

Now, many have said that the law should be changed to mean that deals are binding once agreed… but in practice, this just transfers the risk to the buyer, who then has to deal with all the legals/financials (which take time and money) before even making an offer.


However, if you are selling, there’s an easy thing you can do, up front. This assumes that you are selling through an estate agent.

Ask the agent a very simple question.

As far as you know, has this buyer attempted to gazunder anyone in the past?

Now, the agent may not tell the truth, or know … and it is, in practice, impossible to prove any liability against them even if they do lie… but the very act of asking will, sometimes, flush out something. Gazunderers only get good deals if people fall for their dirty tricks.

It’s a limited upside strategy, in that it seldom works… but it’s a zero downside strategy, in that I’ve never known it to backfire. Or, viewed another way, it’s a free bet that, if you win, makes you a few thousand quid.

Posted in Property Investment, Property Negotiation | 1 Comment »

Why are there so many Linux Distributions (Distros)?

Posted by Mark Harrison on July 5, 2010

This post started life as a comment to a question on lockergnome.

Given that Lockergnome’s audience is different from mine, I thought I’d better summarise a few points for a non-technical audience. The IT crowd will, I hope, forgive a hint of simplification in the interests of making this quick.

Microsoft Windows (in all its versions) is an example of an Operating System. It provides a common platform so that programmers can write programs – Word, Excel, Internet Explorer, Firefox, Chrome, or whatever. Windows is controlled by Microsoft who pay the programmers, and charge a licence fee to anyone who wants to run Windows. (Microsoft, by the way, also control Word and Excel on the same basis, and Internet Explorer, though they don’t charge a separate licence fee for that.)

Linux is a competitor to Windows, in that it is also an Operating System. However, that vast majority of Linux installations are run with a different model to the “charge a licence fee” model. In that, people are allowed to run Linux, and, unlike with Windows, given the “source code” that allows them to change the underlying bits of it. However, if they do so then they have to give anyone who uses those changes the source code so that those third people can make further changes (and explicitly give them the legal rights to do so, subject to the same “if you change and pass it on, you have to pass on the rights and responsibilities” clause.)

Because of this, Linux has established itself as the dominant operating system in many environments, and the majority of web servers run it in some flavour or another. Most (but not all) programs that run on Linux are licenced in the same way – no fee, but open source code with the obligation to share the rights and responsibilities if you change it.

At this point we re-join the original question….

We’ve got to be careful to understand what a Distro is.

To slightly simplify, a Distro is simply a version of Linux with a different set of installation pre-sets, and a different choice of software installed over the base system. The same occurs in the Windows world – while the underlying Windows XP / Vista / 7 is shipped, different PC manufacturers (OEMs) will pre-install a different set of software. In the Windows world, these pre-installed software choices are normally down to commercial pressures – which ISP will offer the most to have their logo as a “click here to set up XXX” on the desktop, which anti-virus software will offer the PC manufacturer the biggest kickback to have a 30-day trial of THEIR anti-virus pre-installed.

In the Linux world, the pressures are different. While SOME distros are based on commercial pressures, others are based on a wide variety of different models. Generally what happens is that a distro exists, and then some group of people want it to evolve a certain way… while another group want it to evolve in a different way. In the Windows world, there are hierarchical mechanisms, mostly within Microsoft, to decide which set of choices will dominate – in the Linux world, however, in most cases, the minority group of geeks can take the base they like, let’s call it MarksLinux 1.0, and see what happens – they can decide to make “DavesLinux 1.1” if it turns out that “MarksLinux1.1” doesn’t evolve in the way they’d hope. To a certain extent, comparing Linux to Windows is, if you’ll pardon the pun, comparing apples with oranges.

In some respects, the Linux world more closely resembles the ENTIRE I.T. ECONOMY, in that there isn’t one central control, but a whole bunch of different people / organisations releasing competing products. On that basis, asking “Why are there so many Distros” is like asking “Why are there so many operating systems?”

There are many Linux distros for the same reason that there is a choice between Microsoft, Apple, Linux and BSD… for the same reason that there is a choice between Lenovo, Dell, Compaq, and Packard Bell… for the same reason that there was a choice between Microsoft Office, Smart*Suite, WordPerfect Office, StarOffice,… and the last example is instructive because it demonstrates that many will fall by the wayside.

If the 20th Century taught us anything, it’s that markets generally provide a better solution than central planning. (For all that the last few years have shown the limitations of markets, it’s not at the stage that market-fundamentalists have to build walls and erect gun towers to shoot those who try to flee the market economy, in a way that centrally-planned economies had to.)

The beauty of the OpenSource model is that it allows multiple products to be brought out, and compete with each other, in a way that allows far more efficient leverage of the best bits of the losers, and a next generation of everything that incorporates the best of the best (where best means “best for the particular niche that the provider is targetting) rather than meaning “the best for anything.” Or, put another way, it’s a lot easier to build Ubuntu by looking at Debian than it would be for a startup with a few million to build a new Hybrid by looking at a Prius.

Posted in Open Source | 1 Comment »

5 steps to perfection in everything you do (er, maybe)

Posted by Mark Harrison on July 2, 2010

This post started as a comment on a post on, but I decided I’d expand it a bit onto my own blog.

On the original post, the writer basically wrote an opinion piece slamming the “it’s easy” mentality that many self-help authors adopt.

To a large extent, I agree, and I think there are at least three words in the title that would need changing:

Problem one: “Easy” steps rather than “Simple” steps. It’s possible to explain something simply, that doesn’t make it easy.

Problem two: “Perfection” rather than “world class” – one of the things about truly world-class people in many walks is that they don’t consider that they have reached perfection, and always see room for improvement.

Problem three: “Everything” rather than “Anything”. Most people can simply reach world class standards in anything they choose, but that’s different from reaching them in everything.

So, here we go:

Five steps to perfection in everything you do

Three simple steps to reach world-class standards in anything you do.

Step 1: Treat others as you’d like them to treat you.

Step 2: Decide what it is you want to be good at.

Step 3: Commit to learning how to do it (which requires a couple of notes).

Now, let’s expand that a little.

1: Treat others as you’d like them to treat you. Many self-help authors finish on this note. It’s a personal preference that I’d like to start there, but a preference born out of experience rather than idealism.

2: Decide what you want to be good at. This is harder than it sounds, not least because as we learn, we change. It’s easy to use platitudes about commitment, but actually, having a big enough reason to want to do something is a key step. You need to choose a niche that will not only support you financially, but either nurture you personally (Maslow was right!) or provide enough passive income that you can concentrate on what you enjoy. The problem, of course, is that because of point 3, it generally takes an awful lot of time to build the business to that level of passive income in the first place, so you may as well build a business doing what you enjoy 🙂

3: It generally takes about 10,000 hours practice to attain world-level mastery of something.

So, in your spare time, an hour a day, that will take 30 years. Up that to 20 hours a week, and you cut that to 10 years. Do it for 100 hours a week, and you have a 2 year deadline.

You’ll also need to work out the right balance between private research (books, Internet research, audio), group-based learning (courses, seminars), 1:1 training, and personal practice (experiments if you’re a science student, playing / singing if you’re a musician, writing if you’re an author, actually looking at markets and properties if you’re building a property portfolio).

Easy? Probably not.

Simple? Yes.

Posted in Personal Development | Tagged: , | 3 Comments »

pic2shop – an iPhone app that I have fallen in love with

Posted by Mark Harrison on March 23, 2010

Towards the end of last year, my former phone supplier decided that, as my contract had expired, they would respond by upping my monthly bill somewhat. Now, I had thought that the economics of mobile phones worked by having a HIGHER monthly bill during the initial contract, as a way of the network provider subsidising the cost of providing me with a handset.

I was happy with the handset I had, but unhappy with my provider, so thought I should change. One thing to consider, despite holding off smartphones for many years, was the iPhone. Despite the best attempts of the in-store staff to cross-sell me to a Blackberry (which was absolutely not what I wanted, and a surprising response given that I’d gone in looking to buy an iPhone), I was finally able to purchase it and (with one niggle, about the ringer volume being nothing like loud enough), I am delighted.

What I expect from an Apple product – more expensive than the competition, on a “feature count” basis, but a joy to use, with huge amounts of work in the design elements and ease of use.

Having got a smartphone, it then took me a few months to do anything other than use the built-in features. The web browsing in particular is something I’ve come to rely on, and the fact that more and more sites provide mobile skins optimised for mobile-device resolutions makes the mobile Internet experience a lot better than even a couple of years ago.

However, I now have my first app, and it’s great. It’s called pic2shop.

It uses a combination of the camera on the phone, and the always-on Internet connectivity to price-check something while you’re in a shop.

You start the app, point the camera at the bar-code on the product, and it locks on, and scans it… it then wanders off to the Internet, presumably to a server run by the pic2shop people,  and finds price comparisons from various websites.

For books, it works very, very well. In Tesco today, I saw the newest Heston Blumenthal book, with a list price on the back of £35, but a Tesco special sticker on the front telling me it was £25, saving me a tenner. One zap of pic2shop later, and I discovered that Amazon sold it for £22.50 or thereabouts, so it never made it from the hand to the trolley. (I have Amazon Prime, so pay a fixed annual fee for next-day delivery no matter how many books I buy.)

Less success of magazines – Country Life’s barcode read, but the application couldn’t find an on-line seller. To be honest, I’m not so surprised.

Clearly, it isn’t going to help with items that don’t have barcodes – the LCD TVs in Tesco, for example, nor with own-brand goods for which there aren’t alternative suppliers…

… but for a free application, it’s marvellous. In the grand scheme of things, a £2.50 saving isn’t huge, but the feeling of smugness I get out of making said saving is out of all proportion to the raw economic value – turns out I am a creature driven by emotions after all.

[Other applications that do the same as pic2shop exist – I’ve not compared them, since the pic2shop seems to work well, and the others I found were chargeable apps, rather than free. It may well be available for other handsets, but again, I neither know nor care, since I’m not going to change my iPhone for another 18ish months.]

Posted in Companies I Like | 6 Comments »

Where’s the Zopa?

Posted by Mark Harrison on November 5, 2009

Zopa is one of those terms from negotiation theory that you come across from time to time.

It means “Zone Of Possible Agreement” – basically, it’s the area between the lowest offer they’ll accept, and the highest price you’re prepared to pay. As a property investor, you end up making lots of offers, and hope that some of them end up in the ZOPA (though most don’t.)

For the last six months or so, however, I’ve been investing with a company called They have nothing to do with property negotiation, but use the term in a different area.

They are basically a forum where you can either register as a borrower (for loans up to a few thousand quid.) However, rather than lending their own money they match you up with lots of small lenders.

  • As a borrower, you give some information about yourself, and basically say what interest you’re prepared to pay.
  • As a lender, you transfer them some money, and basically say what interest rate you’re prepared to lend that money out at.

It’s a bit more complex than that – based on a borrower’s loan application, zopa allocate them into a risk group, and as a lender you can choose which risk group, or groups, you’re prepared to lend to, and set different interest rates for each. Zopa sort things out so that, rather than lending the whole amount to a single borrower, they break it up into small chunks, so you end up lending a tenner each to lots of borrowers (there are ways that you might lend more to one borrower, but the default is a tenner a pop.)

A little while ago, I thought I’d try my toe in the water, and just transferred in £250 to see how it worked. Since then, I’ve been earning 8-10% on the loans that have paid… which has been all of them!

I was expecting a few defaults -but  so far I’ve made 30 loans, each of a tenner (as the interest has come in, and capital’s been partially repaid, I’ve set up my account so Zopa will re-lend it automatically.)… and none have defaulted. Clearly, if you become a lender, you might get different results, but to my mind limiting my exposure to only £10 per loan, rather than making a single bigger loan fits my investment goals better.

Oh, and I chose mainly to lend to the youth market…. so it’s win/win. I get to lend to people who pay a better rate than I could earn with other short-term sources, young people get to borrow at a lower rate than a bank would charge them, get their fees… and the only “losers” are, I guess, the banks who otherwise might have sold a loan at 15-20% interest… I can live with them lending.

If you’re interested, as either a borrower or a lender, then

I’ll be updating my own experiences with them 3-4 times a year, but so far, it’s been excellent.



DECLARATION OF INTEREST: They run a “recommend a friend” scheme, so that if you take out a loan, or invest a reasonable sum, I will get a commission. This does not affect the interest rate you pay as a borrower, or that you receive as a lender.

Posted in Alternative Investment, Zopa | Tagged: , | 6 Comments »

HIPs – some updates to the law

Posted by Mark Harrison on March 12, 2009

In about three weeks time, some minor changes will apply to the way that Housing Information Packs (HIPs) work. If you are thinking of selling any property next month, then you should be aware of these changes now, since you may need to take action before the 6th April!

As I reported at the time, HIPs were introduced about 16 months ago, supposedly to make the process of selling a house easier. I think that the jury is still out on whether it has worked, but it has led to a nice little hidden extra tax, and it’s certainly been good for the association of housing pack providers 🙂
Anyway, the rules changed as of last week – the changes were announced back in December, and come into force on the 6th April.

Up till now, you could market a property, provided you had applied for a HIP. You then had a grace period of 28 days to get the HIP together (and with the exception of water companies, things pretty much worked.)

As of next month, however, the grace period disappears. You have to have a complete HIP before you start marketing the property. That means you have to apply for the HIP and get all the information back, before you can even put a ‘for sale’ piece of card in a window, or place a free ad in a newspaper… let alone instruct an estate agent.

There are some other changes, which to quote from the government press release, mean that extra information about the following is required:

[…] include flood risk information, gas and electricity safety, service charges, structural damage and parking arrangements […]

I’m broadly in favour of the “extra info” changes, but enforcing a wait for HIP providers to get all the information they need back? About the only possible reason to be pleased with that is if you want to see house prices decline further!

Of course, from a purely selfish perspective, because I intend to be a net buyer, I do want to see house prices carry on going down (and my reading of the economics tells me they will)… but extra legislation to suppress a market further in the middle of what is looking like the biggest recession since the 1929 one??? Please?

Posted in Property Investment | Tagged: , , | 4 Comments »