Leeds Building Society said its gross mortgage lending fell 12% to £4.4bn last year, as the home loan market contracted in 2023.
The mutual added that its net mortgage loans fell 25% to £1.5bn, in its annual results statement, although its market share lifted by 4 basis points to 2%.
The fall outperforms wider market forecasts. UK gross mortgage lending is predicted to come in 28% lower at £226bn last year, compared to the previous 12 months, as higher interest rates dulled the appetite of homemovers, according to UK Finance data in December.
The society lent to 17,700 first-time buyers, representing more than one in two new mortgages in 2023, up from one in three a year ago.
Its mortgage asset balance stood at a record of £21.8bn, up 7.4% from the previous year. Profit before tax fell 17.7% to £181.5m over the period.
Separately, the business says it has set up a 12-month trial with North Norfolk District Council and North Yorkshire Council, which will see it stop new loans for holiday lets in tourist hot spots.
The firm says: “Each authority has identified where housing pressures are most serious and holiday let lending will be restricted in those areas from the end of March.”
Selected 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.
There are more than 73,000 holiday homes in the UK, with the latest figures showing an annual increase of 7,000, according to Generation Rent.
North Yorkshire was one of seven areas where the growth in holiday homes effectively cut the supply of new homes by half.
North Yorkshire Council executive member for culture, arts and housing councillor Simon Myers says: “We welcome the fact that it is being specifically targeted at those locations where there are high concentrations of holiday lets.
“At the same time, we feel it strikes a fair balance between the housing needs of local people and the importance of the wider tourism economy of North Yorkshire.”
Leeds Building Society chief executive Richard Fearon says: “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 the 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.”
In 2022, Leeds Building Society pulled out of funding the purchases of second residential homes to focus on FTBs.
