Sir Howard Davies said people just need to save money if they want to buy a house (Picture: Getty Images)
The chairman of NatWest has told first time buyers it is ‘not that difficult’ to get onto the property ladder and all they should do is save money.
Sir Howard Davies said: ‘I don’t think it is that difficult at the moment’, when he was quizzed about the issue on BBC Radio 4’s Today Programme.
Pressed about the claim, he said: ‘You have to save and that is the way it always used to be.’
The typical price for a house in the UK in December 2023 was £287,105, up from £282,305 in the same month a year earlier.
Sir Howard continued: ‘What we saw in the financial crisis was the risk of having people being able to borrow 100% 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.
‘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.’
Nigel Farage hit out at Sir Howard’s remarks and said: ‘It is all but impossible for young people to get on the property ladder, and what that has done is it has destroyed the culture of thrift.
‘Howard said save, but I have spoken to young people who have said that there is no point saving because we are never going to save enough to even get the deposit that is now required.’
Sir Howard spoke to BBC Radio 4’s Today Programme (Picture: Getty Images)
Campaign group Generation Rent is also critical of Sir Howard’s remarks and Ben Twomey, its chief executive, said: ‘What planet does he live on? This is astounding to hear from a senior banker.
‘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.’
Sir Howard also faced questions about when luxury bank Coutts planned to close up Mr Farage’s bank.
Mr Farage claimed it was for political reasons but the BBC reported it was closed for commercial reasons.
The bank’s former chief executive Dame Alison Rose resigned after admitting she spoke to a journalist about Mr Farage’s relationship with Coutts.
Sir Howard said: ‘I continue to say that the judgment that we made at the time was a reasonable one.
‘At the time what we also said was that we wanted an independent legal review, which we commissioned, to be able to satisfy ourselves what was said and what was not, because it was not remotely clear at the time.’
He was also pressed on whether the review carried out should have interviewed Mr Farage.
Sir Howard responded: ‘That was a matter for them as to what they thought they needed to understand about the decision-making processes within the bank, and I think it was a very thorough report, it was an independent report, and I have no reason to question the conclusion that they reached.’
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‘What planet does he live on?’