The announcement by the Leeds Building Society that it would no longer lend to second homeowners exceeds their role as a lender according to property firm. DJ Alexander Ltd, part of the Lomond Group, the largest lettings and estate agency in Scotland.

The firm says that lenders intervening directly in the operation of the housing market for social, moral, or societal reasons was not their remit, and they should be extremely cautious about such interventions.

Their [Leeds B.S) stated reason that second homes are one of the causes of housing shortages in the UK is, at best, disingenuous and, at worst, inaccurate, according to D.J. Alexander.

This year’s Westminster report – ‘Second homes and holiday lets in rural communities’ – found inconclusive evidence on the negative impact of second homes. It states that they may increase prices and reduce availability but there is also evidence that they increase the economic prosperity of rural areas and benefit other homeowners in the vicinity. A similar report commissioned by the Welsh Government came to the same conclusion.

David Alexander, the chief executive officer of DJ Alexander Scotland, said:

“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. 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.”

“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?

“Or should they not fund smokers and those with an unhealthy lifestyle who will ultimate produce greater strain on the NHS? These are not decisions for financial institutions and will make no difference to the market.”

“At the heart of this issue is supply and demand. Supply has not kept up with demand, so prices have risen, and affordability has become more difficult.

“Increase the supply of housing in popular areas and you will soon see prices level off and even reduce making more homes affordable to a wider range of people.

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