A building society that last summer scrapped all lending on some holiday homes has now come up with another unusual policy - not charging fees to borrowers who fall into arrears.
In August the Leeds Building Society decided that it would continue with buy to let loans and mortgages for holiday homes available to let for over 24 weeks a year but - with immediate effect - began refusing loans for other additional properties.
This did not stop the company enjoying its best ever pre-tax profit in its full-year results.
The society reported a profit before tax of £220.5m from the year ending December 31 2022, up from £163.7m in 2021.
Richard Fearon, society chief executive, told members in a trading statement: "Our continued support for the housing market enabled us to surpass all previous lending records. We really delivered on helping to put home ownership within reach of more people with total mortgage lending of £5 billion.
"We continued to offer strong support for customers less well served by the wider market despite the extremely volatile conditions we were operating in. Approximately one in three of all our mortgages went to first time buyers – helped by our decision to withdraw from lending on second homes to bolster our support for those yet to get on the property ladder.”
He has also made the unexpected move on arrears.
"We are again backing our values with actions by extending our suspension of all mortgage arrears fees until at least the beginning of 2024. Our mutual status, which makes us ultimately answerable to our customers, enables us to go further in supporting our members when they need it most.”
“… The past couple of years have been challenging for everyone and we face into what could be prolonged economic headwinds. It is now the hardest time to afford a home since our founding year in 1875, a sad reflection of decades of inaction to tackle the UK's housing crisis. But we will continue to find ways we can help and put homeownership within reach of more people, just as we have for almost 150 years."
Perhaps inevitably, when the Leeds made its announcement last summer about not lending on second homes, there was criticism from a prominent activist in the Generation Rent campaign.
At the time Dan Wilson Craw, deputy director of the activist group, said on Twitter: "Good to see LeedsBS refusing second home buyers' business in the interests of affordability - but if their concern is home ownership specifically, they should stop lending to landlords too."
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Well done Leeds, building society for not charging fees on arrears. We landlords have been doing it ever since the fee ban came into effect. I wonder why Building societies and lenders were exempted from the fee ban?
Jim Haliburton
The HMODADDY
Given the money they are raking in on mortgages & the extra interest earned on arrears I don't think they need to charge a fee as well! I don't think this is as generous as the headline makes out!
If they are being generous, it's with their members' money.
Another case of the responsible majority being made to pay more to subsidise the rest.
The arrears fees could be deferred instead of being written off at the expense of others.
Please vote for the opportunity to debate for tax relief in the parliament:
We can not post the link directly due to restrictions, it is -
petition.parliament.uk/petitions/627785?reveal_response=yes
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