Why don't people switch their mortgages?
Money savings rather than better service more likely to tempt those considering a change
Alex Johnson has been part of The Independent's online team since 2007. He has been writing about microarchitecture on his internationally-acclaimed Shedworking blog since 2006 and is the author of Shedworking: The Alternative Workplace Revolution. His latest book is Bookshelf, published by Thames & Hudson.
Wednesday 11 September 2013
A report from uSwitch.com looking at 2,000 consumers’ switching behaviour - 'Is switching a state of mind?' - says that "switching is still viewed by many with trepidation, uncertainty and anxiety".
Of those questioned, 80 per cent said they were aware of the possibility of changing mortgage providers, a much lower figure than for all other providers with a high of 95 per cent for energy suppliers.
The main reason given for not switching was a perception that mortgages and bank accounts are hard to change and potentially have the biggest impact if something goes wrong during the changeover. As a result, mortgages are among the services that people say they are least likely to switch - alongside digital TV and bank/current account - and the ones for which they would need to see the highest monetary reward in return for doing so.
A fifth said they were put off switching because they were happy with their current mortgage provider.
More than six out of ten mortgage customers said they assumed switching would be difficult, although three quarters in fact reported that they found the move easy.
Just over a third said they would need to have a 'very bad experience' with their current provider before they switched and on average would need to be offered at least a saving of £177.
Indeed, when asked what would be most likely to make them switch, 83 per cent said money compared to 17 per cent who opted for better service.
"What should be a simple solution to making bills cheaper has been placed off limits with many consumers unwilling or unable to get past the barriers they perceive to be in the way," said Ann Robinson, Director of Consumer Policy at uSwitch.com.
A second study by Gocompare.com reveals similar results, including the statistic that more people stayed loyal to their mortgage provider in the last year, than their employers or partners - 2 per cent switched their mortgage compared with 11 per cent who changed jobs and 3 per cent who changed their partners.
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