Leeds Building Society: Holiday let loans to be restricted in trial

Whitby is a popular spot for holiday lets and second homes

A building society is to stop mortgage lending on holiday lets in some tourist hotspots in England.

Leeds Building Society has set up a 12-month trial with North Norfolk District Council and North Yorkshire Council to limit lending for short-term lets.

The company's chief executive said these properties have a "significant stranglehold" on the availability of homes for local residents.

Lending will be restricted from the end of March and include Airbnb properties.

Councillor Simon Myers, executive member for culture, arts and housing at North Yorkshire Council, said the move "strikes a fair balance between the housing needs of local people and the importance of the wider tourism economy".

Both local authorities had identified the areas where housing pressures were most serious, a Leeds Building Society spokesperson said.

In North Yorkshire, they include Scarborough, Whitby, Filey, Leyburn and Richmond.

A move to double the amount of council tax paid by second home owners from April 2025 was approved by North Yorkshire Council earlier this week.

The whole of the North Norfolk District Council area, which includes Cromer, Wells-next-the-Sea and Sheringham, will be included in the trial.

Cromer is one of several areas in North Norfolk included in the trial

Councillor Wendy Fredericks, North Norfolk District Council's portfolio holder for housing and people services, said there was "a really severe shortage of homes that people on local wages can afford" in the area.

Existing holiday let borrowers will be unaffected.

'Forward thinking'

Leeds Building Society chief executive Richard Fearon said: "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."

"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," he added.

Ben Twomey, chief executive of Generation Rent, said the trial was "a forward-thinking step".

Earlier this week, Secretary of State for Levelling Up, Housing and Communities Michael Gove outlined proposals to require planning permission for short-term lets to prevent a "hollowing out" of communities.

The new law would require people letting out their property as a short-term holiday home to seek permission from the local authority.

The rules would not apply to people renting out their main home for 90 days or fewer in a year.