Holtby is on-loan at Fulham from Tottenham.
Lambert admitted, ahead of Holtby facing Villa with Fulham today, the German international was out of Villa's financial reach.
"The level was too high for us on that side of it," he said.
"He's a good player. I remember him when he was at Schalke. Obviously Tottenham are his parent club and they'll have a big say in what happens to him. It's probably his strongest position as a number 10."
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