Ignore the NatWest chairman. It’s the toughest time to buy a home

Winding up his interview with the chairman of NatWest, Sir Howard Davies, on BBC Radio 4’s Today programme this morning, host Amol Rajan asked a simple question.

“When do you think it’s going to be easier for people to get on the property ladder in this country?”

Sir Howard fumbled it.

“Well, I don’t think it’s that difficult at the moment,” he said, prompting listeners under the age of 40 to wonder whether they’d heard him correctly and Amol to splutter, “To buy a house? In this country? Are we living in the same country or are you reporting from overseas?”

Or perhaps another planet, he could have added.

To which Sir Howard replied, “You have to save.”

Ah. Of course. That fundamental part of the house-buying process that millennials and Gen Z just don’t seem to get.

According to this tired and inaccurate thinking, the only reason people under 40 struggle to clamber on to the first rung of the housing ladder is because of their aversion to putting cash aside and their penchant for splashing it on avocado-on-toast and Netflix subscriptions instead, as opposed to the fact that house prices now stand at more than nine times the average salary – in London, 12 times – and the last time would-be buyers faced such hurdles to own a home was in Victorian times. Oh, and they are paying record-high rents that deplete their saving potential.

The difficulty of amassing the vast deposit to secure a starter home is the reason it is so hard for would-be firsttime buyers. What is missing from this discourse is that renters are usually

‘The vast deposit to secure a starter home is the reason it is so hard for would-be first-time buyers’

paying more each month than the equivalent mortgage payment for the property would be – yes, even now with high borrowing rates.

It is galling to realise you have more than enough income to cover a mortgage but can’t get one because you don’t have the mammoth deposit required, in part because you are spending so much on rent in the first place. It’s a vicious circle.

I know this as someone lucky enough to have bought a flat in London last summer. This was only possible thanks to money my grandfather left me and a vast withdrawal from the generous Bank of Mum and Dad. I provided a paltry £7,000 for the deposit and the mortgage payments for my two-bedroom flat each month are £200 less than the rent I was paying on my studio in Zone 2.

Dismayed by just how little I was able to put towards the deposit, I asked my broker, Kat Hatton, at Kingsway Mortgages, who has helped hundreds of first-time buyers in London, how many of her clients provided the entire downpayment themselves.

She could recall only one, a couple, who had saved their £45,000 deposit without the help of an inheritance or their parents.

Sir Howard can bang on about savings as much as he likes – and yes, I wish I had saved more – but even if I had assiduously put aside 20pc of my earnings, it wouldn’t have touched the sides of the six-figure deposit I needed to buy my flat. A flat that I discovered had more than quintupled in value since the previous owner purchased it in 1999. Someone has to pay for those kinds of returns on investment and it’s the first-time home buyers.

I’m used to hearing members of the older generation, who are sitting pretty in mortgage-free homes that have earnt them more than their careers have, opine on why silly millennials cannot get their act together and clamber on to the housing ladder. And I’ve learnt to zone them out. But it is worrying – and let’s face it, irritating – to realise that the head of an important financial institution is clearly clueless about the real economic issues preventing young people from getting their foot on the property ladder.