Leeds Building Society pulls out of second home mortgage market

Leeds Building Society has announced it is withdrawing from lending on second homes to focus more of its efforts on helping people get onto the property ladder.

By pulling out of this market the society aims to provide more affordable housing mortgages and additional support for first-time buyers to put home ownership within reach of more people. It defines second homes as additional residential properties which are not let out. 

Richard Fearon, Leeds Building Society's Chief Executive Officer, said: "Second homes reduce the number of properties available for people to live in, at a time when there's a wide consensus that 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."

Do most mortgage lenders offer second home mortgages?

Trinity Financial's brokers increasingly arrange second home mortgages for separating couples and those relocating for work. Over the years, they have arranged pied-a-terre mortgages for clients keen to have a home in the country or by the sea.

Aaron Strutt, product director at Trinity Financial, says: "It is unusual for a lender to pull out of a part of the market stating the previous policy was making life harder for many borrowers. Lenders typically withdraw their criteria and do not give much of an explanation. 

"Most of the big lenders provide second home mortgages, although some of the smaller providers restrict lending — lenders like Barclays, Halifax, Santander will consider lending on a second home. Virgin Money is another lender offering second home mortgages,  providing borrowers have a 25% deposit and the applicant(s) can afford all their credit commitments, including credit cards and loans, plus any other mortgages."

 

Coventry for Intermediaries accepts second home mortgages but typically when a relationship breaks down or someone wants to avoid a long commute to work. 

 

Santander for Intermediaries can also consider applications where the current residential mortgage is going to remain on completion. However, this property must be noted as a retained property and full running costs will be considered contrary to any court orders/agreements. Applicants will need a 20% deposit to qualify for one of their second home mortgages.