Jeremy Hunt has said buying a first home in Britain today is a “real struggle” after the boss of NatWest claimed it was “not that difficult”.
Sir Howard Davies, 72, said that people would “have to save more”, but suggested the system had simply reverted to how it “used” to be.
Housing campaigners criticised his claim while shadow chancellor Rachel Reeves branded Sir Howard “out of touch”.
Asked about the comment, Mr Hunt pointed to much higher mortgage rates compared to 18 months ago.
“We know that makes it a real struggle for people trying to buy their first home,” he said.
He insisted the way to deal with the problem was to continue to focus on cutting inflation.
Defending his comments, Sir Howard said: “You have to save and that is the way it always used to be.”
But he later sought to clarify his remarks, saying his claim was meant to reflect easier mortgage access.
He said: “Given recent rate movements by lenders there are some early green shoots in mortgage pricing and while funding remains strong, my comment was meant to reflect that in this context access to mortgages is less difficult than it has been.
“I fully realise it did not come across in that way for listeners and as I said on the programme, I do recognise how difficult it is for people buying a home and I did not intend to underplay the serious challenges they face.”
Mr Hunt made his comments in an interview on the BBC’s Today programme designed to highlight his National Insurance cut, announced in the Autumn Statement, which comes into effect today.
He also again hinted at cutting taxes in the Budget, if the economic picture allows.
Asked about his comment that inheritance tax is “pernicious” he said: “I think lots of taxes are pernicious.”
And he urged the public “don’t bet against the British economy – we have actually done far better than everyone said”.
Despite the struggles of recent years “we can now look forward to things getting better”, he added.
The chancellor also said he “profoundly” disagrees with Chris Skidmore after the former net zero tsar announced he was quitting the Conservatives and Parliament over the Government’s stance on oil and gas.
Mr Hunt said: “It is very sad to lose a respected colleague like Chris Skidmore, so I should start by saying that – I worked closely with him when I became Chancellor on climate change issues.
“But I do profoundly disagree with the reasons that he gave for resigning.
“The independent panel for climate change (the Climate Change Committee) that we have in this country are very clear that even when we reach net zero in 2050, we will still get a significant proportion of our energy from fossil fuels. And domestic oil and gas is four times cleaner than imported oil and gas.”
Asked whether he viewed Mr Skidmore as a “rat leaving a sinking ship”, Mr Hunt said: “No, I think he is just wrong on that issue. He feels very passionate about that... But the point is, I think he is wrong on North Sea oil and gas.
“When you have the problems in the Red Sea (with international cargo ships being attacked by Iran-backed Houthi rebels), it is very important for energy security that we have domestic sources of that kind of energy as we go into transition.”
