Sir Howard Davis' comments drew widespread criticism. Photo: Jason Alden/Bloomberg
The chairman of NatWest has been accused of staying out of the picture after he said it wasn't “that difficult” for first-time homebuyers to get on the housing ladder.
Sir Howard Davis, a city grandee who earned £764,000 last year, announced changes to the mortgage system after the global financial crisis meant first-time buyers were rightly forced to save longer to raise a deposit.
< br />“I don't think it's that difficult at the moment. You have to save and always have,” he told the BBC.
“There were dangers in having very, very easy access to a mortgage.
“I'm fully aware that there are people who find it very difficult to start the process, they will have to postpone more.
“But this is embedded in the changing financial system as a result of the mistakes that were made during the last global financial crisis.”
The comments sparked a storm of criticism from politicians and campaigners, who argued that the 72-year-old chairman “is not “true.” Rachel Reeves, the shadow chancellor, told GB News: “I know that many, many people will find these remarks completely out of touch with the situation they and their families face.”
Sir Simon Clarke, the former housing secretary, told The Telegraph: “Sir Howard's comments are clearly untrue.
” Schroders calculated that house prices are now at their highest relative to income since 1876, and the market rental at the same time is a disaster.”
Sir Brandon Lewis, former housing secretary and patron of the Adam Smith Free Market Institute, said: “People are actually finding it much harder to get on the housing ladder than when I bought my first home.”
According to Nationwide The average house price for first-time buyers was £218,500 last year, around five times the average salary, up from 2.7 times in 1983. Savers also have to save money for an average of 13 years to save up for a 20 percent deposit in London.
Separate data released by Halifax on Friday showed house prices rose 1.1 per cent in December for the third month in a row as lower mortgage rates revived the property market.
A typical home now costs £287 £105, up more than £3,000. compared to the previous month.
Consumer groups attacked Sir Howard for ignoring the concerns of young renters and their parents.
Paula Higgins, chief executive of the Landlords' Alliance, told Sir Howard was “totally out of touch with reality”.
“He didn't think about the people who couldn't keep up on their wages and couldn't raise that deposit.
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“People cannot follow in the footsteps of their parents. Parents feel guilty that they cannot help their children.”
According to Savills, parents have maintained a stable level of new buyers over the past few years as deposits have increased.
The Bank of Mum and Dad has committed £8.8bn to help children buy their first home in 2022, up from £4bn in 2019.
Rachel Maclean, who served as housing secretary under Rishi Sunak until she left the government in November, added: “His comments do not reflect the reality for most young people today. We know that the age at which people can buy their first home is rising, and people are increasingly relying on family to help them pay a deposit, which is clearly wrong for society.”
Sir Howard subsequently released a statement via NatWest, which admitted it was “difficult for first-time buyers.”
He said: “I recognize how difficult it is for people to buy a home and I did not mean to downplay the significant challenges they face “
Sir Howard has come under fire in recent months since Coutts. , owned by NatWest, has been accused of siphoning off the bank accounts of former BP Party leader and MEP Nigel Farage.
The scandal led to the resignation of Ms Alison Rose as chief executive, which took place just hours after Sir Howard and the Board backed her.
She quit after it emerged she had disclosed controversial information about Mr Farage's account at NatWest subsidiary Coutts to a journalist.
Sir Howard is leaving his role in April, having previously planned to leave in July.
Asked how he felt about Ms Alison's resignation, Sir Howard later said: “I have no feelings.”
Mr Farage told GB News on Friday : “This man is the head of a bank with 19 million customers – he could not be further from the center of gravity of public opinion and could not be further from his clients. The fact that he is still chairman is incredible.”
Sir Howard was previously director of the London School of Economics, but was forced to resign in 2011 after admitting his reputation The university was “suffered” by accepting a grant in sterling. A $1.5 million donation from Saif al-Islam, son of Colonel Gaddafi.
The city grandee held a number of prominent positions, including two years as deputy governor of the Bank of England and chairman of the Financial Services Authority. .
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