NatWest chief Howard Davies says 'not that difficult' to afford homes

The chairman of NatWest sparked fury today as he insisted it not 'that difficult' for Brits to get on the property ladder.

Sir Howard Davies made the controversial comment as he argued that prospective buyers needed to save up - adding that 'is the way it always used to be'.

But the £750,000-a-year banker's claim, during an interview on BBC Radio 4's Today programme, was greeted with incredulity. 

Nigel Farage - who previously clashed Sir Howard over the debanking furore - branded him a 'member of the entitled elite with no idea about NatWest’s customers or the real world'.

Although prices have slowed since the pandemic, official figures show that between 1998 and 2022 the average house cost in England rose from 3.5 times earnings to nearly 8.3 times. 

New data show property values increased by 1.7 per cent on average across 2023, with the average home valued £4,800 higher than at the end of 2022.

Average house prices rose by 1.1 per cent month-on-month in December, the third monthly rise in a row, according to the Halifax house price index.

The typical UK house price in December 2023 was £287,105, up from £282,305 in the same month a year earlier.

Asked by BBC Radio 4's Today programme when it will be easier for people in the UK to get on the property ladder, Sir Howard said: 'I don't think it is that difficult at the moment.'

When surprised interviewer Amol Rajan asked if they were 'living in the same country', Sir Howard replied: 'You have to save and that is the way it always used to be.'

Sir Howard continued: 'What we saw in the financial crisis was the risk of having people being able to borrow 100 per cent 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.'

Mr Farage criticised Sir Howard's remarks, telling GB News: '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.'

Campaign group Generation Rent were also critical of the comments.

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 the fallout of the debanking saga, in which former Ukip leader Nigel Farage revealed Coutts, a luxury bank owned by NatWest, was planning to close his account.

Mr Farage claimed it was due to his political opinions, but a BBC article appeared soon afterwards claiming the account was closed for commercial reasons.

The bank's former chief executive Dame Alison Rose resigned after she admitted she had spoken to a journalist about Mr Farage's relationship with Coutts.

Asked whether it was reasonable for the banking giant's board to say they had full confidence in Dame Alison after the reports emerged, 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 by lawyers on behalf of the bank should have interviewed Mr Farage.

Law firm Travers Smith found failures in how the bank treated confidential information and how it communicated with 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.'