NatWest chairman says it’s not ‘that difficult’ to get on property ladder and says ‘Britons have to save’
The banking group's chairman has been slammed online for being 'out of touch'
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The chairman of NatWest is being slammed as “out of touch” following his comments referring to it being not “that difficult” to buy a home in the UK.
Sir Howard Davies appeared on BBC Radio 4’s Today programme and was asked when it would become easier for Britons to get on the property ladder.
The chair of one of the country’s biggest banking groups said: “I don’t think it is that difficult at the moment.”
After being probed by the interviewer, NatWest’s chair suggested people “have to save” as that is how it “always used to be”.
Households have been forced to deal with rising mortgage repayments and being priced out the housing market
GETTYSir Howard added: “What we saw in the financial crisis was the risk of having people being able to borrow 100 per cent in order to get onto the property ladder, and then suffering severe falls in the equity value of their houses, and having to leave and having a bad credit record.
“So, there were dangers in very easy access to mortgage credit.
“So, I totally recognise that there are people who are finding it very difficult to start the process, they will have to save more, but that is, I think, inherent in the change in the financial system as a result of the mistakes that were made in the last global financial crisis.”
These comments provoked outrage on social media with many calling Sir Howard “out of touch” which every day people.
On Twitter, Dr Mark Shannan said: “Average deposit for a first time buyer in London in London is about £140,000.
“Elsewhere in the South of England it's £70-100,000. Average salary is around £35,000. What planet is Howard Davies on?”
Prof. Helen Goodman added: “Radio 4 Today has Howard Davies from NatWest saying it's not hard to buy a house. How out of touch can you be?”
Homeowners and potential homebuyers have been saddled with high mortgage rates over the past year following the cost of living crisis.
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His comments come as property values were reported to have risen by 1.7 per cent on average across last year. According to the Halifax house price index, the average home is valued £4,800 higher than at the end of 2022.
Home prices jumped by 1.1 per cent month-on-month in December on average, representing the third monthly hike in a row. For last month, the typical house price in the UK came to £287,105 which is up from £282,305 in the same month a year earlier.
Howard Davies clarified his comments: “Given recent rate movements by lenders there are some early green shoots in mortgage pricing and while funding remains strong, my comment was meant to reflect that in this context access to mortgages is less difficult than it has been.
"I fully realise it did not come across in that way for listeners and as I said on the programme, I do recognise how difficult it is for people buying a home and I did not intend to underplay the serious challenges they face. People have to save much more than they did in the past and that is very tough for first time buyers. The role for banks in today’s environment is to lend responsibly and support customers to build a savings habit and move towards home ownership.”