Leeds Building Society stops lending on holiday lets in some parts of country

Holiday home buyers in some parts of the country will not be able to borrow from Leeds Building Society as it begins a trial designed to support first time buyers.

The UK’s fifth largest building society said it will stop all new loans as part of a 12-month trial in North Norfolk and North Yorkshire following agreements with councils there. It follows a similar move in 2022 in which the society stopped lending on second homes.

Bosses say the move is intended to remove obstacles for first time buyers as they say holiday lets in some areas have a “stranglehold” on the pipeline of homes available and affordable for local people. The society says it has discussed with councils the balance between housing needs and the economic benefits of tourism.

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The announcement coincides with annual results for Leeds Building Society which show a 10% rise in members to 919,000, with more than half of its new mortgage lending now going to first time buyers. Operating profits were down on 2022’s record performance at £181.5m, but investors on the London Stock Exchange were told this was the society’s second highest in its history.

Gross mortgage lending fell from £5bn to £4.4bn. Meanwhile, acknowledging the “challenging” economic environment, mortgage repayment arrears increased marginally to 0.68%, from 0.58% in 2022.

Richard Fearon, chief executive officer at Leeds Building Society said: “As a building society established to help people save and buy their own home, I am incredibly proud of the progress we are making to deliver our purpose and of the support offered to first time buyers in 2023. We concentrated our support on the needs of aspiring homeowners and helped nearly 18,000 first time buyers to get on the housing ladder. We did this by launching innovative partnerships and products designed to help break down barriers which prevent home ownership, such as Experian Boost and Home Deposit Saver, and by continuing our market leading position in shared ownership mortgages.

“We also stood shoulder to shoulder with members already on the property ladder during a year which saw the Bank of England interest rate reach a 15-year high, helping when it really matters with support tailored to their individual circumstances. We were one of the first to sign up to the Mortgage Charter and the first lender to launch a simple, digital application process for those seeking help; we limited increases in our standard variable rate, and we did not charge arrears fees – and will not again during 2024.

“We’ve been helping people get on, and stay on, the housing ladder for nearly 150 years, but home ownership has rarely been as unaffordable, inaccessible, and unavailable as it is today. We want to change that and our decision to stop new loans on holiday let homes in North Norfolk and North Yorkshire for a 12 month trial is another example of the society acting in the interests of first time buyers.”

Original artice – https://business-live.co.uk/all-about/yorkshire-humber

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