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The Generation Rent group has thrown its weight behind a ban on mortgages for holiday homes buyers – and its chief has described holidays as “luxury”.

The statement follows news that the Leeds Building Society is banning mortgages for buyers of holiday lets in two popular parts of the country for a 12 month pilot period. This will affect the North Norfolk and North Yorkshire council areas: the ban is to come in from the end of next month.

The society says it wants more emphasis placed on increasing the supply of homes, and a statement explains: “The chosen postcode locations will be added to the building society’s systems to prevent any holiday let mortgage applications received in those areas from being approved. Existing holiday let borrowers are unaffected.”

According to Generation Rent, there are more than 73,000 holiday homes in Great Britain, with latest figures showing an annual increase of 7,000.

Ben Twomey, chief executive of Generation Rent, says: “The massive increase in short-term holiday lets has seen renters turfed out of our homes and priced out of our communities. 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. 

“While the government must do more to stop the haemorrhaging of homes into the holiday let sector, Generation Rent are encouraged that lenders have identified the problem too. The more that can be done to stop rents rising and help tenants to stay in our communities, the better chance we will have to be in position to buy our own homes one day too.” 

The building society’s chief executive, Richard Fearon, says: “This is another example of how we’re putting homeownership within reach of more people generation after generation. 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. 

“There have been a range of measures introduced by Government over recent years to give local areas additional powers to restrict holiday lets. This adds to their arsenal of options and does so in a way which leaves power in the hands of local communities. 

“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.” 

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