Announcing the news, Richard Fearon, chief executive officer of the building society said that second homes reduce the number of properties available to live in and highlighted that the bank wants to direct more of its efforts to other sectors, especially first time buyers.

Leeds Building Society is the UK’s fifth-largest building society, with £19.7 billion of loans on its books. The lender is reported to be the first big mortgage lender to fully ban second home owners.

Richard Fearon said: “We don’t believe support for second homes is compatible with our purpose to put home ownership within reach of more people.”
Property firm DJ Alexander Ltd, has said that the decision by the building society “exceeds their role as a lender”.

David Alexander, chief executive officer of DJ Alexander Scotland, commented: “The Leeds Building Society have made a bold statement by refusing to lend to second home buyers, but you would have to question whether it is their role to intervene in the housing market in this way.

“The notion that not lending to second homeowners will allow more people to join the housing market does not really make sense unless they hope that prices will fall as a result of their intervention.”

He added: “This is extremely unlikely as the popular tourist destinations where this is a major issue are unlikely to be impacted by this change in policy. They will remain popular as long as people want to live there, and they will find other companies willing to lend to facilitate this. St. Ives, which has a restriction on second homeowners, has seen prices increase by 26% since the policy was introduced in 2016. Indeed, both the Westminster and Welsh reports found that interventions rarely produced a tangible difference.”