Sir Howard Davies: Not that difficult to buy a home, says NatWest chair

NatWest’s chair has said he believes it is not currently “that difficult” for people to get on the housing ladder.

Sir Howard Davies said people have always had to save for a deposit but admitted you had to save more today.

He told the BBC he recognised people were “finding it difficult to start the process”, but warned of “dangers” in “very easy access to mortgage credit”.

His comments come as mortgage interest rates have started to fall, but overall remain higher than in recent years.

The average price of a property in the UK is currently £287,105, according to figures released on Friday by Halifax, the UK’s biggest mortgage lender.

Typically, borrowers need a deposit worth at least 10% of a property’s value to get a mortgage. With the gap between house prices and average earnings widening over decades, saving enough money to put down initially is the biggest hurdle for many hoping to buy a home.

It is also one factor in why the average age of a first-time buyer has risen to 32.

Asked when he thought it would be easier for people to get on to the property ladder in the UK, Sir Howard said: “Well, I don’t think it’s that difficult at the moment. You have to save, and that’s the way it always used to be.”

Pressed further on his reasoning, the NatWest chair admitted people had to save more, but said it was also due to fundamental changes in the housing market seen in the wake of the financial crisis.

“What we saw in the financial crisis was the risk of having people being able to borrow 100% 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, very easy access to mortgage credit,” Sir Howard added.

While people have to save more cash for a deposit, the rising cost of living has hindered many people’s ability to set money aside with energy bills and food costs soaring in recent years.