The chair of NatWest has claimed it is not “that difficult” to get on the property ladder, despite the number of first-time buyers with a mortgage falling to the lowest level in a decade.
“I don’t think it is that difficult at the moment,” Sir Howard Davies told the BBC. Pressed about this assertion, he added: “You have to save, and that is the way it always used to be.”
His comments to Radio 4’s Today programme follow a report published this week by Yorkshire Building Society, which found that the number of first-time buyers who bought a home with a mortgage fell to the lowest level in a decade in 2023.
A 20% deposit on a typical first-time buyer home equated to about 105% of the average annual gross income, according to the report, although this is down from a high of 116% in 2022.
Davies told Today: “I totally recognise that there are people who are finding it very difficult to start the process [of buying a house]. 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.”
On Friday, the lender Halifax recorded the third monthly rise in house prices in a row in December, with the typical home costing £287,105.
“Was there ever a more out-of-touch statement about homebuying?” said Marty Naan, a mortgage and protection adviser. “Telling first-time buyers it’s not that difficult to get on the ladder is quite simply a slap in the face to people struggling to make ends meet, never mind save for a deposit on a mortgage.”
The campaign group Generation Rent said Davies’s comments were “astounding to hear from a senior banker”.
Speaking to PA Media, its chief executive, Ben Twomey, said: “What planet does he live on? We are in a cost-of-renting crisis that is making it incredibly hard for people to buy a home as we hand a third of our wages every month over to our landlord.
“Interest rates have increased but house prices have yet to correct, meaning we still need to save for a huge deposit, but also would need a high income to afford monthly mortgage repayments.”
Davies later issued a statement saying his comments had been meant to reflect the fact it had become easier to access a mortgage recently.
“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,” he said.
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“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.”
It is not the first time that Davies, who is to stand down as chair of the banking group later this year, has faced a furore over ill-advised comments.
Last year, he weathered calls for his resignation after initially backing Alison Rose in the row over a media leak pertaining to the closure of the former Ukip leader Nigel Farage’s accounts with the NatWest subsidiary Coutts.
Rose was forced to resign as the NatWest chief executive, and the banking group scrapped almost £7.6m in potential payouts over the scandal.
In 2022, Davies made headlines when he told hundreds of staff at a private event that he “never felt so embarrassed internationally” as he did at the International Monetary Fund meeting after the UK’s disastrous mini-budget announced by the then chancellor, Kwasi Kwarteng.