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Aspiring homeowners helped by targeted holiday let lending restrictions

To put home ownership in reach of more people, we will stop holiday let lending in North Norfolk and certain areas of North Yorkshire, as part of a 12-month trial.

We’ve worked with North Norfolk District Council and North Yorkshire Council to stop new loans on holiday let homes, beginning at the end of March 2024.

After liaising with the councils over the restrictions, we’ve sought to balance local housing needs with the economic benefits tourism can provide.

Each authority has identified postcode areas where housing pressures are most serious and where they agree with holiday let lending being restricted.

Those postcode locations will now be added to our systems to prevent any mortgage applications received in those areas from being approved. The restricted postcode areas are at the bottom of this article.

The changes will come into effect from Thursday 28 March 2024. We’ll provide our broker partners with more information closer to this time. Existing holiday let borrowers are unaffected.

Challenges facing first time buyers are clear

It follows a similar decision in 2022 when we became the first national lender to pull out of funding purchases of second residential homes, allowing us to instead increase lending to people getting on the property ladder.

Research we commissioned last year made the steep challenges facing first time buyers clear: the house price to earnings ratio has doubled over the past 40 years to almost five times’ earnings, and it would take them an average of 12 years to save for a deposit.1

The scale of the impact of holiday lets is also acute. According to Generation Rent there are more than 73,000 holiday homes in Great Britain, with the latest figures showing an annual increase of 7,000. North Yorkshire was one of seven areas where the growth in holiday homes effectively cut new supply by half.2

‘Putting home ownership in reach of more people’

Our Chief Executive Officer, Richard Fearon, said: “This is another example of how we’re putting homeownership within reach of more people generation after generation. 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.”

‘Fair balance’

Councillor Wendy Fredericks, Portfolio Holder for Housing and People Services at North Norfolk District Council, said: “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, North Yorkshire Council executive member for culture, arts and housing, said: “We are pleased to support this initiative by Leeds Building Society. We welcome the fact that it 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.”

‘Forward-thinking step’

Ben Twomey, Chief Executive of Generation Rent, said: “The massive increase in short-term holiday lets has seen renters turfed out of our homes and priced out of our communities. Generation Rent is pleased that Leeds Building Society is acting on this issue and prioritising the necessity of homes over the luxury of holidays.”

If you would like further information, or have a question or comment, please contact your dedicated BDM.

Please note:  Our Affordability Calculator doesn’t ask you to input a postcode, so any postcode that’s restricted as part of the trial won’t be declined at DIP stage. We’ll update our website with more information soon.



North Yorkshire: BD23 1, BD23 2, BD23 3, BD23 4, BD23 5, BD23 6, BD23 9, BD24 0, BD24 9, DL8 3, DL8 4, DL8 5, DL11 6, DL11* 7, LA2 7, LA2 8A, LA2 8B, LA2 8D, LA2 8E, LA2 8H, LA6 3, YO11 1, YO11 2, YO13 0, YO14 9, YO21 1, YO21 2, YO21 3, YO22 4, YO22 5, TS13* 5

*Not all postcodes in these sectors fall in the North Yorkshire boundary

North Norfolk: NR11 8, NR12 0, NR12 9, NR21 8, NR25 6, NR25 7, NR26 8, NR27 0, NR27 9, NR28 9.

Postcode sectors which overlap with other authorities: NR24 2, NR28 0, NR20 5, NR29 4, NR13 6, PE32 2, NR10 5, NR29 5, NR12 7, PE31 6, NR12 8, PE31 8, NR23 1, NR21 7, NR21 9, NR22 6, NR11 6, NR21 0, NR11 7, NR29 3.




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