Hunt ‘didn’t understand’ NatWest chief comments on buying a home
The major retail bank chairman was forced to clarify his remarks, with the comments prompting a major backlash.
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Your support makes all the difference.Jeremy Hunt has said he “didn’t understand” recent comments by NatWest Group chairman Sir Howard Davies, who suggested it was not “that difficult” to get on the property ladder.
The major retail bank chairman was last week forced to clarify his remarks, with the comments prompting a major backlash.
The Chancellor on Tuesday joined criticism of Sir Howard, telling ITV’s The Martin Lewis Money Show Live: “I just don’t really understand how he could have said that.
“When I am looking at the pain that families are going through because they’ve seen interest rates go up to five and a quarter per cent, mortgage rates go up by considerably more than that if they have to change it.
“So, I think people are finding it very difficult and we are seeing that in the volume of house transactions that are happening.”
Sir Howard insisted he “did not intend to underplay the serious challenges” people face buying homes, hours after the original interview on BBC Radio 4’s Today programme sparked widespread criticism.
Sir Howard had been asked by the programme when it would be easier for people in the UK to get on the property ladder. He replied: “I don’t think it is that difficult at the moment.”
Pressed about this claim, he added: “You have to save and that is the way it always used to be.”
He pointed to safeguards introduced after the 2008 financial crisis which prevented people from being able to borrow 100% mortgages, adding: “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.”
Figures from the Office for National Statistics (ONS) show that full-time employees in England could expect to spend around 8.3 times their annual earnings buying a home in 2022, according the ONS.
A decade earlier the figure was 6.8, while 25 years ago, in 1997, it was 3.5.
The trend is similar in Wales, though the affordability gap is not quite as large, standing at 6.2 times annual earnings in 2022, up from 5.6 in 2012 and 3.0 in 1997.
Across England and Wales, while average earnings doubled between 1997 and 2022, average house prices increased by four-and-a-half times.