The Leeds Building Society1 in the United Kingdom has announced it will no longer provide mortgages for second homes. This story is worth reporting because it might be a big deal and because it might not.
On the plus side, the Leeds Building Society is a large organization. When large organizations change course, people in the sector pay attention. Other lenders might decide to follow suit.
As well, the Leeds Building Society says it wants to shift its focus to helping people who are currently excluded from the market. It plans to divert funds to young people who want to buy their first home. This shift in focus could open the door to ownership for some young renters who thought they would never own their home.
And why this might not be a big deal?
As Daniel Wilson Craw points out, the Leeds Housing Society has made no announcement about the money it lends to landlords. Wilson Craw is part of Generation Rent, which represents people who are renting homes from private landlords. He says that by continuing to lend to private landlords, the Leeds Building Society isn’t helping people who are are paying high rents and have no prospect of saving enough to ever buy a home.
As well, officials at the Leeds Housing Society announced it is not planning to provide mortgage funding for second homes going forward. The article doesn’t say how many second home mortgages the Society holds now or and whether it will continue with those mortgages when they come up for renewal.
Perhaps it’s best to hold off buying the balloons and streamers until more is known about the Leeds Building Society’s plans. For more, check out this article in The Big Issue: Major building society says it will stop offering mortgages on second homes
