Propertymark sits on the fence over first time buyer controversy

Propertymark has stepped into the row over a bank chief’s comments on first time buyers.

Sir Howard Davies, chairman of NatWest, responded to a question on BBC Radio about whether he thought it was easy for first-time buyers to step onto the property ladder.

The question was prompted by recent findings that home ownership in Britain fell from 71 per cent in 2004 to 65 per cent in 2021.  

Sir Howard commented: "Well, I don't think it's that difficult at the moment... You have to save and that is the way it always used to be.

"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, 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."

The comments have been criticised by some but over the weekend a statement released by Propertymark appeared to sit on the fence.

Chief economist Nathan Emerson was quoted as saying: “Saving for a home can be a real struggle for many first-time buyers and can make purchasing a home feel like an impossibility. 

“Whilst higher interest rates are normally an indication that inflation is still too high, they can however, benefit savers tremendously by encouraging them to save more, which should spur some first-time buyers to get their feet onto the housing ladder.

“House prices have started to drop from the spike seen on the back of the pandemic, so for some, this should be seen as a golden opportunity. 

“Of course, more needs to be done to help first-time buyers, and that is why Propertymark continues to encourage the UK Government to implement measures that can help them.”