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NatWest boss: 'It isn’t difficult to get on the property ladder'

NatWest chairman Sir Howard Davies sparked fury on social media last week after claiming it isn’t difficult to get on the property ladder.

Asked on BBC Radio 4’s Today programme about when he thought it would be easier to get on the property ladder, Sir Howard said it’s not that difficult at the moment.

He said: “You have to save, that’s the way it always used to be.”


Pressed further and asked about changes in the house price to earnings ratio, Sir Howard said: “What we saw in the financial cris was the risk of having people being able to borrow 100% to get on the property ladder and then suffering sever falls in the equity values of their houses and having to leave and having a bad credit record.

“There were dangers in very easy access to mortgage credit.

“I recognise there are people finding it difficult to start the process, they will have to save more but that is inherent to changes in the financial system as a result of mistakes made in the last global financial crisis and we have to accept we are  still dealing with that.”

His comments drew criticism on social media and from property professionals.

Stephen Perkins, managing director at Yellow Brick Mortgages, said: "It is tiring reading such comments from people who bought their first house for around £10,000 with a minimal deposit and a mortgage at 2-3 times their income and who are completely out of touch with the challenges first-time buyers face getting on the housing ladder.

"Without help from the Bank of Mum and Dad or inheritance, it is incredibly hard to save the £30,000 or so deposit often needed to be able to buy an average-priced house, especially if privately renting. There are many reasons the average age of a first-time buyer keeps increasing, and it is not because young people do not want to save money or are lazy or careless with their money. It's because the deck is heavily stacked against them without support.

"Sir Howard Davies should be ashamed of these comments, especially given NatWest needed support themselves and is still 38% government-owned."

Jonathan Rolande, spokesman for the National Association of Property Buyers, said: “These remarks will dismay millions of people looking to get on the property market. So many people, particularly those aged in their 20s and 30s, are struggling to afford to rent let alone buy a home.

“Sir Howard’s comments also fail to address a really important point. And that’s the fact that even those who are lucky enough to be able to afford to get a mortgage are increasingly now unable to find a property because of the chronic shortage in supply.

“This is not the fault of banks. But it does shine a light on the lack of awareness many have about the nature of the current property crisis. I only hope the politicians coming out and criticising Sir Howard now back up their soundbites with policies that actually help remedy the situation rather than seeking quick and cheap political gain

“The BBC interviewer was 100% right to raise income multiples which haven't been worse since the 1870s.

“Sir Howard clarified his remarks by mentioning that 100% lending wouldn't help - he's right, that would push up prices even further. 

“The lack of supply of property and poor wage growth for decades is the real culprit here.”

  • Rob Hailstone

    “You have to save, that’s the way it always used to be.”

    Yes, you have to save, but save for much longer and save much more.

    I have four kids, only one can afford to buy because she was left some money by a relative on her mother’s side of the family. Two of the other three lived with us for as long as was possible (rent free), but when their personal relationships developed, quite naturally, decided to move out. They are now renting (not cheap!) and saving less.

    Number four is still with us (he is 24) and saving as hard as he can. If he is lucky he might be able to buy a property later this year, but he had a setback recently when his much needed car cost him £1k to repair.

    Not everyone is in a position to let their kids live with them rent free (my goodness they eat a lot!) until they reach their mid-20s, let alone give them a substantial amount towards a deposit.

    Perhaps Sir Howard Davies could tell us were we are going wrong?

  • icon

    Sir Howard Davies will annoy many, but........there is a lot of money around now compared to his and mine younger days. The young person now will have a £1000 mobile with charges. Trainers at £150 a pop, Netflix, Sky, out for drinks and spend £40 -£60 plus an £40 Uber, will likely have 3 holidays a year by aeroplane. I remember going camping once a year and restricting to one beer and meals out were for special occasions only with tiny glasses of wine. Todays modern generation would never be able to cope with that level of low expenditure. It's the me me me generation now.


    I was in a gym last week and overheard a couple of young guys talking. They seemed to be discussing the cost of socialising and one said to the other that if he goes for a night out it'll set him back £300. Getting into a round often costs £150! Neither batted an eyelid as they talked about these figures and I find it astounding they have so much 'disposable income'.


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