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It is not “that difficult” for people to get on to the housing ladder, the chairman of the NatWest Group has said.
Speaking on the Today programme on Radio 4, Sir Howard Davies said that while people have to save to buy a property “that’s the way it always used to be”.
Pressed by presenter Amol Rajan on when it might get easier for people to buy a home in the UK, Sir Howard said: “I don’t think it’s that difficult at the moment.”
It comes as property values were reported to have increased by 1.7 per cent on average across 2023, with the average home valued £4,800 higher than at the end of 2022, according to the Halifax house price index.
Average house prices rose by 1.1 per cent month-on-month in December, the third monthly rise in a row, according to the new data out today.
Those who buy a home usually need a deposit to get cheaper interest rates on their mortgage.
The NatWest chairman said that the 2008 financial crisis had led to safeguarding against “dangers in very easy access to mortgage credit”.
He was pressed by the presenter on the fact that houses now cost multiple times the average salary and said listeners under 40 would be asking: “have you tried buying a house”?
Sir Howard added: “What we saw in the financial crisis is the risk of people being able to borrow 100 per cent in order to get onto the property ladder, and then suffering severe falls in the equity values of their houses, and having to leave and having a bad credit record.
“I totally recognise that people are finding it very difficult to start the process and will have to save more but is that is I think inherent in the change in the financial system as a result of the mistakes that were made in the last financial crisis and we have to accept we’re still living with that.”
