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Leading estate agent slams building society over second homes decision

Leeds Building Society's decision to stop lending on second homes properties is 'wrong' say David Alexander.

Nigel Lewis

david alexander estate agent building society

A leading figure in the estate agency world has slammed the Leeds Building Society for its decision to cease lending to second homes buyers.

David Alexander, who heads up DJ Alexander – which was recently acquired by the Lomond Group – says lenders intervening directly in the operation of the housing market for social, moral, or societal reasons is “not their remit, and they should be extremely cautious about such interventions,” he says.

“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.”

“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.

Alexander claims that St. Ives, which has a restriction on second homeowners, has seen prices increase by 26% since the policy was introduced in 2016.

“But you have to ask where does this end? Will banks refuse to lend for car purchases or holidays because of the impact of these purchases on the climate?

“Intervening in the market always has unforeseen consequences and should not be the function of lenders but left to policymakers.”

Read more about the building society’s plans.

August 2, 2022

One comment

  1. ‘But you have to ask where does this end? Will banks refuse to lend for car purchases or holidays because of the impact of these purchases on the climate?’ Has Mr Alexander never heard of ESG?I am afraid the banks are, very actively, starting to take a good look at the underlying assets ESG credentials – the world is changing and arguably for good reason. The St Ives example is needs to be looked at in relation to the wider market rises so is out of context and probably a poor example in such a hot market.

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