Building society to restrict holiday let lending in North Norfolk
Locations like Cromer, Wells-next-the-Sea and Sheringham will be affected
A building society will restrict mortgage lending on holiday lets in some tourist hotspots in England, including North Norfolk.
The chief executive of Leeds Building Society, which is making the restrictions, said holiday lets have a "stranglehold" on the pipeline of homes available for local people in some locations.
The society has worked with North Norfolk District Council and North Yorkshire Council to set up a 12-month trial, during which it will stop new loans for holiday let homes.
Lending will be restricted from the end of March.
New mortgages for short-term lets, such as properties on Airbnb, would be included, as the society classes them as holiday lets under its criteria.
It follows a decision by the society in 2022 to pull out of funding purchases of second residential homes, allowing it to focus more on first-time buyers.
The society said the two local authorities have identified where housing pressures are most serious.
It will add postcode locations to its systems to prevent holiday let mortgage applications received in those areas from being approved.
Existing holiday let borrowers will be unaffected.
The whole of the North Norfolk District Council area will be included. This includes locations such as Cromer, Wells-next-the-Sea and Sheringham.
Selected areas in North Yorkshire will also be affected. They are Scarborough, Whitby, Filey, Saltburn, Leyburn and Richmond.
"Holiday lets have grown to have a significant stranglehold"
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."
He added: "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, 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."
"A forward-thinking step"
Ben Twomey, chief executive of Generation Rent, said: "Generation Rent is pleased that Leeds Building Society is acting on this issue and prioritising the necessity of homes over the luxury of holidays.
"This trial to restrict mortgage lending on holiday lets is a forward-thinking step that will hopefully help to improve the situation for renters in North Norfolk and North Yorkshire."
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 under a new "use" category.
The rules would not apply to people renting out their main home for 90 days or less in a year.
A mandatory national register would be set up providing councils with information on short-term lets in their area.