NatWest Chairman Sir Howard Davies has sparked controversy with his remarks about the housing market’s accessibility for first-time buyers.
Davies stated on BBC that acquiring a mortgage isn’t as challenging as perceived, advocating the necessity of saving for a deposit. He said that “you have to save, and that’s the way it always used to be” – acknowledging the tightened mortgage system post-crisis but maintaining his stance on the feasibility of homeownership.
These comments have drawn backlash from various quarters. Shadow Chancellor Rachel Reeves characterised Davies’ perspective as detached from the actual hardships people face. Sir Simon Clarke and Sir Brandon Lewis, both with significant roles in housing policy, criticised the remarks as not reflective of the stark reality of housing affordability. The HomeOwners Alliance and Rachel Maclean, a former housing minister, echoed these sentiments, emphasising the growing reliance on family support for home purchases.
Davies’ comments come amidst data revealing the steep climb in housing prices and the consequent struggles for first-time buyers, with Nationwide reporting an average house price of £218,500 last year, significantly higher than past decades. Despite a slight revival in the property market, as noted by Halifax, the daunting financial burden on young families and individuals persists.
House prices rose 1.1% in December – the third consecutive monthly increase, according to the recent House Price Index. The average house now costs £287,105, up £4,800 in a year.
The criticisms compound existing challenges for Sir Howard, following a scandal involving Coutts, a NatWest subsidiary, and the subsequent resignation of NatWest’s chief executive, Dame Alison Rose.
Concluding with a note of acknowledgment, Sir Howard through NatWest stated the recognition of the formidable barriers first-time buyers encounter, marking a slight shift from his earlier comments. His tenure, marked by significant roles in the financial sector, continues to stir debate as he approaches his retirement, leaving behind a trail of contentious viewpoints and an unsettled public discourse on the realities of the housing market.
