Leeds Building Society to restrict holiday let lending in parts of UK to reduce âstrangleholdâ on local residents
Leeds Building Society will restrict mortgage lending on holiday lets in a number of popular tourist destinations in England, in a new trial.
The building societyâs chief executive said, in some hotspots, holiday lets have a âstrangleholdâ on the pipeline of properties available for local residents.
Working with North Norfolk District Council and North Yorkshire Council in 12-month trial, the building society will stop offering new loans for holiday let homes in specified areas.
Lending will be restricted from the end of March and new mortgages for short-term lets will be included.
Leyburn, a market town near Bolton Castle in North Yorkshire, is among the locations affected
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The building society pulled out of funding purchases for second residential homes in 2022, so it could increase its focus on first-time buyers.
The new policy will affect the whole of North Norfolk District Council, including locations such as Cromer, Wells-next-to-the-Sea and Sheringham.
Parts of North Yorkshire will also be affected â in Scarborough, Whitby, Filey, Saltburn, Leyburn and Richmond.
The building society said the two local authorities identified where housing pressures are at their most serious.
Existing holiday let borrowers will be unaffected, itâs understood.
Leeds Building Society says it will add postcode locations to its systems to prevent holiday let mortgage applications received there from being approved.
Leeds Building Society chief executive Richard Fearon said: âIn some areas, holiday lets have grown to have a significant stranglehold on the pipeline of homes available for local people to live in and we want to play our part in removing it.â
He added: âWe will learn through the trial how effective this measure can be in increasing supply of residential homes and gain greater insight on steps that can make a positive difference.â
Councillor Wendy Fredericks, portfolio holder for housing and people services at North Norfolk District Council, said: âIn North Norfolk we have a really severe shortage of homes that people on local wages can afford.
âIncreasing numbers of holiday lets reduce the number of rental homes available for year-round use by local people.
âSo I welcome the move by Leeds Building Society to stop new lending on holiday lets in key areas.â
Councillor Simon Myers, executive member for culture, arts and housing at North Yorkshire Council, said: âWe are pleased to support this initiative by Leeds Building Society.
Leeds Building Society will restrict mortgage lending on holiday lets in Whitby, North Yorkshire, during the trial
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âWe welcome the fact that it is being specifically targeted at those locations where there are high concentrations of holiday lets.
âAt the same time, we feel it strikes a fair balance between the housing needs of local people and the importance of the wider tourism economy of North Yorkshire.â
Ben Twomey, chief executive of Generation Rent, said: âGeneration Rent is pleased that Leeds Building Society is acting on this issue and prioritising the necessity of homes over the luxury of holidays.
âThis trial to restrict mortgage lending on holiday lets is a forward-thinking step that will hopefully help to improve the situation for renters in North Norfolk and North Yorkshire.â
The Secretary of State for Levelling Up, Housing and Communities Michael Gove outlined proposals to require planning permission for short-term lets earlier this week, in a bid to prevent a âhollowing outâ of communities.
It would mean people letting out their property as a short-term holiday home would need to seek permission from their local authority under a new âuseâ category.
The new law wouldnât apply to people renting out their main home for 90 days or less within one year.
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