Majorer refuses to give mortgages lend on second homes amid crackdown

One of the country’s biggest building societies has stopped lending to second home owners amid a Government crackdown on additional properties.

Leeds Building Society is the first major lender to pull its mortgages for second homes which are not let out, stating it instead wanted to focus on helping more first-time buyers onto the property ladder.

The country’s fifth biggest building society will withdraw its six second home mortgages tonight, but continue to lend on buy-to-let properties and holiday homes.

It comes as the Government clamps down on second homes which are sat idle for much of the year.

Local authorities will soon be granted the power to double council tax bills on additional properties not in use or let out for at least 70 days per year in a bid to deter empty holiday homes in tourist hotspots.

Richard Fearon, chief executive of Leeds Building Society, said second homes were “not compatible” with getting more people on the property ladder.

He added: “Second homes reduce the number of properties available for people to live in at a time when housing supply in the UK is inadequate to meet demand and needs to be increased.

“Any home other than a main residence usually lies empty most of the time, which does not serve the local community or contribute to the local economy.”

There are almost half a million second homes in England, according to official data.

The pandemic triggered a surge in second home ownership, but friction with locals has become common.

Second home owners have been accused of driving up house prices for first-time buyers and leaving homes empty in small communities.

Regional powers are expected to be granted to local authorities to restrict people renting out their second homes for fewer than 90 days to tackle the issue.

Mr Fearon said the Government’s tax and policy clampdown had not influenced the lender’s decision to withdraw its second home mortgages.

“It was a successful part of the business for us and so stopping lending on second homes was a big decision. But ultimately it was not in keeping with our purpose as a building society to help first-time buyers,” he added.

A targeted crackdown has begun in second home hotspots such as Whitby and Brighton. Residents and councillors recently voted to ban people buying new-build properties as second homes in a bid to ease local housing crises.

A similar clampdown has been rolled out in Wales, where the maximum level at which local authorities can set council tax premiums on second homes and long-term empty properties will rise from 100pc to 300pc in April next year.

Council tax premiums were paid on an estimated 23,000 properties in the country this year, according to the government website.


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