Leeds Building Society is set to restrict mortgage lending on holiday lets in two popular tourist destinations to help aspiring homeowners buy in these areas.
From the end of March, the 12-month trial, in conjunction with North Norfolk District Council and North Yorkshire Council, will see holiday let lending restricted in areas where housing pressures are most serious.
The society has liaised with both councils to achieve a balance of local housing needs and the economic benefits of tourism.
The chosen postcode locations will be added to the building society’s systems to prevent any holiday let mortgage applications received in those areas from being approved.
The society confirmed that existing holiday let borrowers will be unaffected.
“This is another example of how we’re putting homeownership within reach of more people generation after generation,” said Richard Fearon, chief executive at Leeds Building Society.
“In 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.
“There have been a range of measures introduced by government over recent years to give local areas additional powers to restrict holiday lets.
“This adds to their arsenal of options and does so in a way which leaves power in the hands of local communities.
“We 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.”
Councillor Wendy Fredericks, portfolio holder for housing and people services at North Norfolk District Council, added: “In North Norfolk, we have a really severe shortage of homes that people on local wages can afford.
“Increasing numbers of holiday lets reduce the number of rental homes available for year-round use by local people.
“So, I welcome the move by Leeds Building Society to stop new lending on holiday lets in key areas.”
Councillor Simon Myers, executive member for culture, arts and housing at North Yorkshire Council, commented: “We welcome the fact that [this initative] is being specifically targeted at those locations where there are high concentrations of holiday lets.
“At 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.”
