Can that Really Be True?
Posted on 22 January 2010 by
To promote lower rates from today on a third of its 2 year fixes (those with a maximum LTV of 80%) Santander has put out a press release headlined “Demand for tracker deals plummets as homeowners look to make fixed rate hay while the base rate shines.”
I take little notice of most surveys from product providers, whatever type of business they are in, because in most cases the main purpose of the survey is to help promote a particular product. Nothing wrong in that if the survey is robustly done but it is so easy to influence the answers to any survey by, for example, asking the key question in a particular way or by asking certain loaded questions before asking the key one. Therefore, unless exact details of questions asked in the survey are disclosed, and of course normally they are not, it is impossible to evaluate what value a survey has.
However I looked closely at this Santander survey because the headline caught my eye (and so full marks to the Santander PR team for attracting my attention with a good headline) because it was saying something which was the exact opposite to our experience. In fact so far in January the proportion of John Charcol clients choosing a tracker is even higher than the 81% who took trackers last month.
If a broker rather than a lender had conducted this survey, and assuming one accepted the results as being robust, the headline would probably have been something like “The don’t knows win by a huge margin.”
Only 36% of respondents said they would choose either a fixed or a tracker rate. Therefore, unless a significant number of people said they would choose a capped or discount rate, which seems unlikely, I conclude that nearly two thirds of respondents were don’t knows. It seems a reasonable assumption that most of these will seek advice. Therefore this survey is good news for brokers, and of course it was put out by Abbey for Intermediaries, although the press release made no reference to this good result for brokers.
The other figure in the press release which struck me is the suggestion that “Over 880,000 UK homeowners on tracker or fixed rate mortgages, could be looking to remortgage in the next six months.” With Skipton doing their bit to beef up the remortgage market the volume of remortgages is probably getting somewhere near its nadir, but in November there were only 31,000 remortgages, according to the CML. Annualizing this produces a figure of 372,000, or 186,000 in the next 6 months, and so a figure of 888,000 remortgages in the next 6 months seems a tad on the high side.
It could, of course, be that 888,000 people will look to remortgage in the next 6 months and over three quarters of them will be rejected, but perhaps the real answer is that the press release uses that magic word “could” and so while “over 888,000 homeowners could be looking to remortgage” equally “over 888,000 homeowners could not be looking to remortgage!”
Finally, the company carrying out the survey, Opinium Research LLP, doesn’t appear to be a member of The British Polling Council as I assume if it was it would say so on its web site. I always have more confidence in polling/survey results from members of the Council because they have to abide by certain minimum standards of transparency.
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