A building society will no longer lend for the purchase of second homes, saying they reduce the stock available for first time and other buyers.
The Leeds Building Society will still offer buy to let mortgages and loans on holiday homes available to let for over 24 weeks a year but - with immediate effect - is refusing loans for other additional properties.
Instead it says it will focus on other sectors, such as affordable housing and help for first-time buyers, to help fulfil its purpose to put home ownership within reach of more people.
Chief executive Richard Fearon says: “We’ve taken this decision after a great deal of thought as we don’t believe support for second homes is compatible with our purpose to put home ownership within reach of more people.
“Second homes reduce the number of properties available for people to live in at a time when there’s a wide consensus that housing supply in the UK is inadequate to meet demand and needs to be increased."
The anti-second homes move came in a trading statement from the society, which saw its pre-tax profit more than double to £146.5m in the first six months of the year compared to a year ago.
The Leeds is the UK’s fifth-largest building society; it says nine of its 10 biggest lending days occurred in the first half of this year, leading to its highest number of completions in a six month period.
A leading spokesperson for Generation Rent rapidly took to Twitter to say the building society did not go far enough.
Dan Wilson Craw, deputy director of the activist group, said: "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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"The anti-second homes move came in a trading statement from the society, which saw its pre-tax profit more than double to £146.5m in the first six months of the year compared to a year ago."
Ha ha. Classic. Increasing profits but they want to makes homes more accessible.
Ok but not many people were buying for holiday let’s or AirBnB. I don’t know anyone, they had the Property already and made a decision to switch to survive after being continuously attacked by regulators and unfair expensive conditions including HMO licensing and Section 24 plus to imminent threat of removing Section 21.
Give me a break what’s this guy on about he says second homes reduce the number of properties available for people to live in, isn’t all Residential Property available for people to live in regardless of Tenure, so how could the number of properties available be any less for people to live in.
Perhaps they could target the new Flats bought by over seas investors and sitting idle, sometimes they tell us they are all taken, ask the local people that knows that were hoping their business would pick up like shops and restaurant etc.
The problem with anti-second home sentiment is that some coastal local authorities in England do not want large second homes turned into HMOs for the local young people because of the anti-social behaviour that results. Some councils will go out of their way to prevent HMOs being created. I am not talking about preventing overcrowding, but preventing occupation of each, often large, en-suite bedroom by one person when there is a sitting room and dining room, too.
Cutting off their nose to spite their face, thought their business was to lend money, there are countless others that will be very happy to lend
To be fair in tourist areas such as Cornwall it is an issue, but I would think most of those properties are or were cash purchases anyway, and there will be plenty of other lenders. It's just a publicity stunt from a lender pretending to have a social conscience.
Just white noise, as stated by others, the bulk of this problem comes from the switching from residential to holiday or Airbnb, and we all know why landlords are making that move. This problem could be solved by 2 actions…. 1. Build millions of truly affordable homes for sale and rent…2. Stop targeting landlords as if we are the devil in carnet, then we may stay in the residential market and not sell up.
"Build millions of truly affordable homes for sale and rent"
Yup, nail on the head. Provide more homes for those on benefits who cannot afford market rentals as well as homes that are affordable to first time buyers. This needs not just promises by government, it needs money invested in the real world to make it happen. Of course, this will never happen in my lifetime unless a miracle happens and the government puts its money where its mouth is.
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