The chairman of NatWest has been invited to “spend a week in the real world” after making “out of touch” remarks suggesting it is currently not too difficult for people to get on the housing ladder in Britain.
Property experts have reacted to comments made by Sir Howard Davies during an interview on BBC Radio 4’s Today programme on Friday.
Asked when he thinks it will become easier for people to get on the property ladder, Sir Howard said: “I don’t think it is that difficult at the moment. You have to save, and that is the way it always used to be.”
Sir Howard then went on to explain that first-time buyers have to save more for a deposit on a home, to avoid the dangers of taking out higher-risk mortgages – which was more common before the 2008 financial crisis.
In a statement following the interview, Sir Howard said his comments were meant to reflect the fact that “access to mortgages is less difficult than it has been”, and he insisted he “did not intend to underplay the serious challenges” people face when buying a home.
Critics have stressed many people are unable to save enough for a deposit because of higher living costs and soaring house prices.
Riz Malik, director of R3 Mortgages, said: “The previous year proved to be exceptionally tough for getting on the property ladder, a fact underscored by the lower number of mortgage approvals.
“We all appreciate that increasing savings and deposits is the answer, but with rents at an all-time high and the cost-of-living crisis, that is easier said than done.”
Lewis Shaw, owner of Shaw Financial Services, said: “Perhaps Sir Howard would like to come and spend a week in the real world where tenants are pushed to breaking point by soaring rents and unable to save for a deposit.”
Jack Tutton, director of SJ Mortgages, said the remarks will come across as “extremely out of touch to the majority of first-time buyers that we speak to”, when saving for a deposit can be a “real challenge”, especially for renters.
Meanwhile, Propertymark, a professional body representing nearly 18,000 members across the industry, said higher savings rates should “spur some first-time buyers” to get on the housing ladder.
Chief executive Nathan Emerson said: “Saving for a home can be a real struggle for many first-time buyers and can make purchasing a home feel like an impossibility.
“Whilst higher interest rates are normally an indication that inflation is still too high, they can however benefit savers tremendously by encouraging them to save more, which should spur some first-time buyers to get their feet on to the housing ladder.”
But he added “more needs to be done to help first-time buyers”.
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