bsoc:building-societies

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bsoc:building-societies [2025/11/07 03:03] – katjabsoc:building-societies [2025/11/12 17:24] (current) – katja
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---- +# Building societies 
-title: "Building societies" + 
-date: 2017-06-18 +![Leeds Building Society](https://lowimpactorg.onyx-sites.io//wp-content/uploads/Leeds-building-society.jpg)
-categories:  +
-  - "building-societies" +
-  - "shelter" +
-tags:  +
-  - "co-operatives" +
-  - "cohousing" +
-  - "community-land-trusts" +
-  - "credit-unions" +
-  - "housing-co-operatives" +
-  - "money" +
-  - "rotating-savings-credit-associations-roscas" +
-coverImage: "Leeds-building-society.jpg" +
----+
  
 > "A mutual is owned by, and run for the benefit of, its members - it has no external shareholders to pay in the form of dividends, and as such does not usually seek to maximize and make large profits or capital gains." - Wikipedia > "A mutual is owned by, and run for the benefit of, its members - it has no external shareholders to pay in the form of dividends, and as such does not usually seek to maximize and make large profits or capital gains." - Wikipedia
  
-### What are building societies?+ 
 +## What are building societies?
  
 Building societies are mutual institutions offering savings accounts and mortgages, and occasionally current accounts. This is all they provide. They are simple beasts compared to banks, and their mutual nature means that they are owned by their members, and are not listed on stock exchanges and owned by shareholders. Building societies are mutual institutions offering savings accounts and mortgages, and occasionally current accounts. This is all they provide. They are simple beasts compared to banks, and their mutual nature means that they are owned by their members, and are not listed on stock exchanges and owned by shareholders.
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 </figure> </figure>
  
-#### History+### History
  
 The [first building society](https://www.thefreelibrary.com/Brum's+building+society+origins-a0188990857) was formed in 1775, by Richard Ketley, proprietor of a pub called the Golden Cross, in Snow Hill, Birmingham. At the time, publicans encouraged meetings of working men in their pubs in order to sell more beer! Lots of trades unions and friendly societies were formed in pubs. This society was quickly followed by others in Birmingham, then Dudley, Rowley Regis and other places in the Midlands, North and Scotland. Members of early societies like this paid money into a pot, and when there was enough, one member’s name was drawn by lot and the money was used to build them a house. This house was used as security for attracting more loans until everyone in the group was housed, after which the society had served its purpose and was disbanded. These early societies were consequently called ‘terminating’ societies. The [first building society](https://www.thefreelibrary.com/Brum's+building+society+origins-a0188990857) was formed in 1775, by Richard Ketley, proprietor of a pub called the Golden Cross, in Snow Hill, Birmingham. At the time, publicans encouraged meetings of working men in their pubs in order to sell more beer! Lots of trades unions and friendly societies were formed in pubs. This society was quickly followed by others in Birmingham, then Dudley, Rowley Regis and other places in the Midlands, North and Scotland. Members of early societies like this paid money into a pot, and when there was enough, one member’s name was drawn by lot and the money was used to build them a house. This house was used as security for attracting more loans until everyone in the group was housed, after which the society had served its purpose and was disbanded. These early societies were consequently called ‘terminating’ societies.
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 _The Newcastle Building Society opened a branch inside Yarm library, North Yorkshire, to prevent its closure._ _The Newcastle Building Society opened a branch inside Yarm library, North Yorkshire, to prevent its closure._
  
-#### Demutualisation+### Demutualisation
  
 Many building societies were ‘demutualised’, starting in the 1980s, after deregulation that allowed mutual societies to become banks with shareholders, or to be merged with existing banks. Incentives were offered to members in the form of cash payments or shares. The first mutual society to be demutualised was Abbey National, followed by famous names such as Alliance and Leicester, Northern Rock and Bradford and Bingley. They have all since failed. Many building societies were ‘demutualised’, starting in the 1980s, after deregulation that allowed mutual societies to become banks with shareholders, or to be merged with existing banks. Incentives were offered to members in the form of cash payments or shares. The first mutual society to be demutualised was Abbey National, followed by famous names such as Alliance and Leicester, Northern Rock and Bradford and Bingley. They have all since failed.
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 Vince Cable called the demutualisation of building societies ‘one of the greatest acts of economic vandalism in modern times’. It has resulted in the loss of hundreds of small building societies, converted or swallowed up by the corporate sector. This is the opposite direction to the one we should be moving in if we don’t want banks and financial institutions that are ‘too big to fail’, although of course the motivation behind deregulation was ideological rather than economic. Vince Cable called the demutualisation of building societies ‘one of the greatest acts of economic vandalism in modern times’. It has resulted in the loss of hundreds of small building societies, converted or swallowed up by the corporate sector. This is the opposite direction to the one we should be moving in if we don’t want banks and financial institutions that are ‘too big to fail’, although of course the motivation behind deregulation was ideological rather than economic.
  
-\[caption id="attachment\_61154" align="aligncenter" width="391"\]![nationwide-penrith](https://lowimpactorg.onyx-sites.io/wp-content/uploads/nationwide-penrith.jpg) The largest and smallest building societies in the UK.\[/caption\]+<figure> 
 +![nationwide-penrith](https://lowimpactorg.onyx-sites.io/wp-content/uploads/nationwide-penrith.jpg)  
 +<caption> 
 +_The largest and smallest building societies in the UK._ 
 +</caption> 
 +</figure>
  
 In 1986, the Building Societies Act liberalised the sector, allowing building societies to enter new areas, such as insurance, estate agency and unit trusts. They needed to raise capital quickly to be able to do this, and many decided to demutualise and to float on the stock market to raise the capital. This wasn’t done lightly, and there were huge battles between members. When those battles were won by demutualisers, with the help of financial incentives to members, they soon found that being a middle player in the cut-throat banking sector was much more of a struggle than being a mutual in a more patient, stable sector. Not one of the demutualised building societies exists as an independent entity today. In 1986, the Building Societies Act liberalised the sector, allowing building societies to enter new areas, such as insurance, estate agency and unit trusts. They needed to raise capital quickly to be able to do this, and many decided to demutualise and to float on the stock market to raise the capital. This wasn’t done lightly, and there were huge battles between members. When those battles were won by demutualisers, with the help of financial incentives to members, they soon found that being a middle player in the cut-throat banking sector was much more of a struggle than being a mutual in a more patient, stable sector. Not one of the demutualised building societies exists as an independent entity today.
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 1980 saw the birth of the newest building society - the [Ecology Building Society](https://www.ecology.co.uk/), with a unique focus on the environment. 1980 saw the birth of the newest building society - the [Ecology Building Society](https://www.ecology.co.uk/), with a unique focus on the environment.
  
-\[caption id="attachment\_61153" align="aligncenter" width="500"\]![sign-penrith](https://lowimpactorg.onyx-sites.io/wp-content/uploads/sign-penrith.jpg) The sign on the Penrith Building Society says it all: ‘Every man his own landlord’ (well, all apart from the fact that they left out half the population).\[/caption\]+<figure> 
 +![sign-penrith](https://lowimpactorg.onyx-sites.io/wp-content/uploads/sign-penrith.jpg)  
 +<caption> 
 +_The sign on the Penrith Building Society says it all: ‘Every man his own landlord’ (well, all apart from the fact that they left out half the population)._ 
 +</caption> 
 +</figure>
  
-### What are the benefits of building societies?+## What are the benefits of building societies?
  
 Profits are only distributed to staff and to members of the society, they are not creamed off for shareholders. For this reason, they are often able to offer competitive rates for savings accounts and mortgages. Profits are only distributed to staff and to members of the society, they are not creamed off for shareholders. For this reason, they are often able to offer competitive rates for savings accounts and mortgages.
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 They are ethical places to put your money. From Positive Money: ‘building societies are prohibited by law from engaging in commodities or foreign exchange trading. So if you give your money to Nationwide or Coventry Building Society, they won’t use it to push up the price of food to the point where people in developing countries starve. That’s a nice thought!’ They are ethical places to put your money. From Positive Money: ‘building societies are prohibited by law from engaging in commodities or foreign exchange trading. So if you give your money to Nationwide or Coventry Building Society, they won’t use it to push up the price of food to the point where people in developing countries starve. That’s a nice thought!’
  
-\[caption id="attachment\_61152" align="aligncenter" width="500"\]![bradford-bingley](https://lowimpactorg.onyx-sites.io/wp-content/uploads/bradford-bingley.jpeg) Many ex-building societies were swallowed by the corporate sector or became plcs themselves after demutualisation, such as the Halifax, Abbey National, Alliance & Leicester, Bradford & Bingley etc. (and the Co-operative Bank is no longer a co-op). Check the [BSA’s list](https://www.bsa.org.uk/about-us/members-of-the-bsa) before switching.\[/caption\]+<figure> 
 +![bradford-bingley](https://lowimpactorg.onyx-sites.io/wp-content/uploads/bradford-bingley.jpeg) 
 +<caption> 
 +_Many ex-building societies were swallowed by the corporate sector or became plcs themselves after demutualisation, such as the Halifax, Abbey National, Alliance & Leicester, Bradford & Bingley etc. (and the Co-operative Bank is no longer a co-op). Check the [BSA’s list](https://www.bsa.org.uk/about-us/members-of-the-bsa) before switching._ 
 +</caption> 
 +</figure>
  
 At least 75% of their investments, by law, must go to mortgages on residential property, so none of the toxic investments that cause economic crashes. This isn’t an imposition on building societies, by the way – it’s what they want. At least 75% of their investments, by law, must go to mortgages on residential property, so none of the toxic investments that cause economic crashes. This isn’t an imposition on building societies, by the way – it’s what they want.
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 _George Bailey again, this time explaining the nature of mutualism and avoiding a run on his mutual savings and loans bank._ _George Bailey again, this time explaining the nature of mutualism and avoiding a run on his mutual savings and loans bank._
  
-### What can I do?+## What can I do?
  
 Switch your savings, mortgage and (with some societies) current account to a building society. Lots of people organise their mortgages through a broker, and if that’s the case, you can stipulate that you’d like to use a building society. If they don’t understand your ethical reasons for doing so, you’ll then have the opportunity to educate them. Switch your savings, mortgage and (with some societies) current account to a building society. Lots of people organise their mortgages through a broker, and if that’s the case, you can stipulate that you’d like to use a building society. If they don’t understand your ethical reasons for doing so, you’ll then have the opportunity to educate them.
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 Current accounts are expensive for financial institutions to operate, but for current accounts, you have two options – the [Nationwide](https://www.bsa.org.uk/information/consumer-factsheets), or if you live in Cumbria, the [Cumberland](https://www.cumberland.co.uk/). Current accounts are expensive for financial institutions to operate, but for current accounts, you have two options – the [Nationwide](https://www.bsa.org.uk/information/consumer-factsheets), or if you live in Cumbria, the [Cumberland](https://www.cumberland.co.uk/).
  
-\[caption id="attachment\_61151" align="aligncenter" width="500"\]![](https://lowimpactorg.onyx-sites.io/wp-content/uploads/nationwide-glastonbury.jpg) Nationwide were invited into glastonbury by locals after Lloyds closed the last bank branch in town.\[/caption\]+<figure> 
 +![](https://lowimpactorg.onyx-sites.io/wp-content/uploads/nationwide-glastonbury.jpg)  
 +<caption> 
 +_Nationwide were invited into glastonbury by locals after Lloyds closed the last bank branch in town._ 
 +</caption> 
 +</figure>
  
 If you go to the website of the Building Societies Association, the trade body for building societies, you’ll find [a list of all the building societies in the UK](https://www.bsa.org.uk/about-us/members-of-the-bsa), with contact details. You’ll be able to choose one in or close to your town if you want to support your local society. You could possibly have a Nationwide current account as well as savings / mortgage with your local society. If you go to the website of the Building Societies Association, the trade body for building societies, you’ll find [a list of all the building societies in the UK](https://www.bsa.org.uk/about-us/members-of-the-bsa), with contact details. You’ll be able to choose one in or close to your town if you want to support your local society. You could possibly have a Nationwide current account as well as savings / mortgage with your local society.
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 Just pop into your local branch or call them, and they’ll explain what to do to switch. With current accounts, they’ll be able to switch all your standing orders and direct debits painlessly too. And if you really want to talk to a real human, you’ll be glad you decided to go with a building society. Just pop into your local branch or call them, and they’ll explain what to do to switch. With current accounts, they’ll be able to switch all your standing orders and direct debits painlessly too. And if you really want to talk to a real human, you’ll be glad you decided to go with a building society.
  
-\[caption id="attachment\_61150" align="aligncenter" width="475"\]![One of the newest building societies is the Ecology Building Society](https://lowimpactorg.onyx-sites.io/wp-content/uploads/ecology-building-society.jpg) The newest building society – the Ecology, founded in 1980.\[/caption\]+<figure> 
 +![One of the newest building societies is the Ecology Building Society](https://lowimpactorg.onyx-sites.io/wp-content/uploads/ecology-building-society.jpg)  
 +<caption> 
 +_The newest building society – the Ecology, founded in 1980._ 
 +</caption> 
 +</figure>
  
 Once you’re a member of a building society, you become a part-owner, and so you have the right to become involved in the running of the society (although of course you don’t have to if you don’t want to). You’ll have the right to nominate and vote for directors, or to stand for election yourself (as long as you get enough support from other members), and to attend the AGM. Once you’re a member of a building society, you become a part-owner, and so you have the right to become involved in the running of the society (although of course you don’t have to if you don’t want to). You’ll have the right to nominate and vote for directors, or to stand for election yourself (as long as you get enough support from other members), and to attend the AGM.
  
-### Specialist(s)+## Specialist(s)
  
 **Thanks to Hilary McVitty of the [Building Societies Association](https://www.bsa.org.uk) for information.** **Thanks to Hilary McVitty of the [Building Societies Association](https://www.bsa.org.uk) for information.**
  
  • bsoc/building-societies.1762484587.txt.gz
  • Last modified: 2025/11/07 03:03
  • by katja