ISER says impact of interest rate rises limited

chucky

Graham_Devon wrote: »

Oh I see, you have missed the point.

The CML quote I pointed to USES the shelter data. It's good enough for the CML. That was my point. Whereas it's total tripe if you read the comments on here.

i think you'll find they're not the same thing

the CML report says people don't know which rate people are on and the Shelter reports says that 60 out of 2000 people are struggling with their mortgage.

linking the two is stretching it. feel free to think they're the same thing.

Graham_Devon

chucky wrote: »

i think you'll find they're not the same thing

the CML report says people don't know which rate people are on and the Shelter reports says that 60 out of 2000 people are struggling with their mortgage.

linking the two is stretching it. feel free to think they're the same thing.

Yawn.

http://www.creditchoices.co.uk/unaware-homeowners-at-risk-of-losing-homes-100311.html

I didn't think I'd need to provide the whole link...but seems I do.

Homeless charity Shelter fears this lack of awareness could push some 2.8 million homeowners, many of whom already find it difficult to keep a roof over their head, into arrears as they are not prepared for any potential interest rate rises.

julieq

The Shelter data is what it is. The conclusions you can draw depend very largely on what questions were asked and the methods used to extrapolate conclusions. Shelter were extremely selective, and the questioning is suspect.

Ask someone if it's a struggle to pay their mortgage or their rent. There's a fair chance that people will tell you it is, because "struggle" is not a defined term. It just tells you they'd rather pay less, which is obvious. Ask them if they are in arrears and for how long and you have a proper unemotional quantity which can be verified from other sources.

Actually the same data was used by Shelter to draw different conclusions the preceding month, when they did some very dodgy extrapolation on the number of people with mortages in the data set to conclude just over 3 million people with mortgages were "struggling". They did that by multiplying the proportion of people in the set "struggling" with mortgages by the total adult population. That's faking a large number because it doesn't refer to the actual number of mortgages in the country and correcting to the sample, and it ignores joint mortgages (double counting). They then drew the conclusion the following month that just over 3 million were struggling with mortgages or rent, same sample (identical number of people), different set of assumptions. The interpretation is hugely suspect, and the conclusions we're being asked to draw are essentially a form of fraud being used to support Shelter.

Many - probably most - people just about cover expenses in a month. And this is true when they get a pay rise, or if they have a few takeaways or go out for a few nights a month. It's because spending expands to use available cash more or less. That doesn't mean that increasing housing costs necessarily becomes the straw that breaks the camel's back because there is spending that can be prioritised lower for pretty much everyone. The evidence is that people were not having problems at rates prior to 2008, and there's no reason to believe that there will be mass defaults if rates get back up there. But they're not going there any time soon in any case.

julieq

Graham_Devon wrote: »

Yawn.

http://www.creditchoices.co.uk/unaware-homeowners-at-risk-of-losing-homes-100311.html

I didn't think I'd need to provide the whole link...but seems I do.

That's a different survey. The previous one was done around August 2010 and had just over 2200 respondents.

chucky

Graham_Devon wrote: »

Yawn.

http://www.creditchoices.co.uk/unaware-homeowners-at-risk-of-losing-homes-100311.html

I didn't think I'd need to provide the whole link...but seems I do.

jeeeeeezus Devon - you really are slow

the Shelter survey was 2,000 people. 3% said they were at risk if rates went up - that's 60 people. if you think that's representative of the UK go for it. it wouldn't surprise me.

from the CML

Out of the 1,500 homeowners surveyed, a massive 25% believed current interest rates were either higher or the same as they have been in the past, or they were completely unaware of what interest rates were doing.

that doesn't mean they will lose their home. it means they don't know what mortgage product and rate they have and that rates are that low.

trying to link the two is just desperate. trying to say that 1,500 people equals 2,800,000 people losing their home is for stupid people to believe. i qualify you and the usual suspects on here in that.

try again

julieq

And here is a link to the press release which includes the actual assumptions:

http://media.shelter.org.uk/Press-releases/RATE-RISE-COULD-TAKE-ONE-IN-FOUR-HOMEOWNERS-BY-SURPRISE-SHELTER-WARNS-384.aspx

Helpfully it lists some of the assumptions made in the "mortgage" survey, as ridiculous as they are. Note in particular that they use the total number of mortgages in point 4 to draw conclusions from one survey, but this number isn't consistent with 3.1M adults being a total of 17.8% of outstanding mortgages in point 5. In short, this representation is flawed, simplistic, and they are using emotive questioning in the first place. I'm sorry Graham, but Shelter are playing fast and loose with the data.

Graham_Devon

julieq wrote: »

And here is a link to the press release which includes the actual assumptions:

http://media.shelter.org.uk/Press-releases/RATE-RISE-COULD-TAKE-ONE-IN-FOUR-HOMEOWNERS-BY-SURPRISE-SHELTER-WARNS-384.aspx

Helpfully it lists some of the assumptions made in the "mortgage" survey, as ridiculous as they are. Note in particular that they use the total number of mortgages in point 4 to draw conclusions from one survey, but this number isn't consistent with 3.1M adults being a total of 17.8% of outstanding mortgages in point 5. In short, this representation is flawed, simplistic, and they are using emotive questioning in the first place. I'm sorry Graham, but Shelter are playing fast and loose with the data.

Look, it doesnt really bother me either way. I'm just saying this new survey is extremely different to any others we have seen.

What data is this survey in this thread made up of?

We simply don't know.

julieq

The interesting thing is that this is all about generating a headline suggesting that 1 in 4 homeowners could be taken by surprise by a rate rise. That is true on the data, but the implication is that the surprise would be an unpleasant one. They don't really even say that in the text, but obviously what happened next is that the headline was picked up and relayed (simplistically) by the media, people like Graham picked up on it, and all of a sudden they've created a widespread belief that 1 in 4 people are on the edge of financial catastrophe. It's textbook spin and manipulation.

And when someone has bought into the idea, confirmation bias cuts in. They'll fight like cornered rats to hold onto what they believe to be true and basically ignore what the data actually says, or reject reports like the one that is the subject of this thread.

Which in the interests of fairness I had probably better go and have a look at too.

julieq

Graham_Devon wrote: »

Look, it doesnt really bother me either way. I'm just saying this new survey is extremely different to any others we have seen.
.

No it isn't. It's just like the other Shelter press releases, an extremely twisted representation of the data designed to mislead you.

And it worked.

julieq

this is a good one for the bears incidentally

http://www.iser.essex.ac.uk/publications/journal/1180