2 November 2015, updated 29 May 2019
Building societies play an important role in housing finance by providing an alternative to bank housing finance and savings products. According to The Building Societies Association, the British building societies have about 20% of these market segments (mortgage loans, savings accounts). Currently there are more than 40 building societies operating in the United Kingdom with about 25 million members and total assets exceeding 390 billion GBP. The largest building society is Nationwide Building Society having 15 million members (around 60% of total building societies members); the second- and the third-largest building societies are Yorkshire Building Society and Coventry Building Society, each having about 10% of total building societies members.
Building societies are mutual financial institutions, owned and run by their members for the benefits of their members. A customer of a building society usually becomes a member when he/she borrows money from the building society or starts saving with the society. A member can vote in the election of directors and on resolutions, attend Annual General Meetings (AGM), receive certain information from the building society, support an election candidate or a resolution.
All building societies have their headquarters outside of the city of London, and are deeply involved in the local economies where they are based. Building societies are committed to their local involvement, playing an important role in their local economies in terms of employment, investment and charity.
Products and services are provided by British building societies to residents of the United Kingdom only.
Mortgage lending is core business of the building societies, that is why building societies offer a wide variety of products in this area:
Interest rates on mortgages can be fixed for the whole mortgage period or variable. "Variable" means the rate can go up or down at any time. However, sometimes variable rate mortgages may be subject to a "floor" (below which the rate can never fall), or a "ceiling" (which the rate cannot go beyond). The rate is varied either at the discretion of the lender or in line with movements of an external rate (such as the Bank of England Base Rate). Most lenders have "standard" variable rates, which are varied at their discretion.
Savings products is the main way of fundings for building societies and building societies provides a variety of savings products to their members:
Savings accounts made with building societies in the United Kingdom are covered by British deposit guarantee scheme up to £85,000 per depositor.
Several building societies can also offer current accounts and credit cards (for example, Nationwide Building Society) and a range of insurance products.
Building societies consistently outscore banks on various measures of customer service: the customers of building societies think more highly of their provider than the customers of banks in terms of trustworthiness, fairness and possibility of recommending their provider to new perspective customers.
Building societies have been successfully operating in low interest rate environment prevailing from 2009. They have been able to attract new borrowing members by offering mortgage products with more competitive fixed and variable mortgage interest rates. Average savings rates offered by building societies on savings accounts have been comparable to the average from other providers.
The list of building societies currently operating in the United Kingdom is shown below.
|Rank||Name||Number of Members||Total Assets||Mortgages|
|31||Bath Investment and Building Society||9985.00||311.71||242.48|
|40||Beverley Building Society||13582.00||185.65||148.68|
|38||Buckinghamshire Building Society||10708.00||240.58||189.08|
|13||Cambridge Building Society||122824.00||1230.77||1060.50|
|2||Coventry Building Society||1857641.00||42572.50||35930.90|
|10||Cumberland Building Society||161702.00||2522.77||2027.12|
|21||Darlington Building Society||85549.00||585.77||481.91|
|27||Dudley Building Society||33357.00||397.39||315.22|
|43||Earl Shilton Building Society||12616.00||137.13||103.21|
|42||Ecology Building Society||9417.00||178.66||114.41|
|18||Furness Building Society||104195.00||898.75||763.68|
|26||Hanley Economic Building Society||18753.00||403.59||302.76|
|30||Harpenden Building Society||21827.00||314.70||197.95|
|19||Hinkley and Rugby Building Society||48500.00||740.46||618.55|
|41||Holmesdale Building Society||7826.00||183.51||144.66|
|20||Ipswich Building Society||70303.00||646.30||520.61|
|5||Leeds Building Society||806567.00||18484.00||15223.00|
|15||Leek United Building Society||90184.00||1039.42||795.89|
|34||Loughborough Building Society||25420.00||296.08||223.81|
|32||Manchester Building Society||15643.00||304.19||250.82|
|24||Market Harborough Building Society||34903.00||423.79||389.81|
|22||Marsden Building Society||42228.00||472.84||384.35|
|23||Melton Mowbray Building Society||42637.00||451.86||358.67|
|14||Monmouthshire Building Society||78474.00||1059.05||842.17|
|11||National Counties Building Society||58045.00||2021.78||1565.26|
|1||Nationwide Building Society||15500000.00||229098.00||177154.00|
|17||Newbury Building Society||67945.00||1008.66||843.40|
|9||Newcastle Building Society||344188.00||3762.10||2707.30|
|8||Nottingham Building Society||206178.00||3900.40||3368.80|
|44||Penrith Building Society||6756.00||107.45||80.73|
|6||Principality Building Society||538961.00||9262.60||7864.10|
|12||Progressive Building Society||109387.00||1787.92||1462.91|
|16||Saffron Building Society||117692.00||1019.91||842.49|
|25||Scottish Building Society||33095.00||420.18||318.44|
|4||Skipton Building Society||919060.00||21023.60||16666.20|
|35||Swansea Building Society||14912.00||275.38||201.34|
|36||Teachers' Building Society||12291.00||274.14||231.66|
|39||The Chorley and District Building Society||27323.00||233.12||178.28|
|28||The Mansfield Building Society||23048.00||368.09||290.50|
|37||The Stafford Railway Building Society||18287.00||263.14||170.60|
|29||Tipton and Coseley Building Society||33277.00||363.90||285.73|
|33||Vernon Building Society||34345.00||296.58||225.45|
|7||West Bromwich Building Society||432533.00||5781.50||4805.40|
|3||Yorkshire Building Society||2852000.00||42047.20||35061.20|
All the data are for 2018. Total assets and mortgages are provided in million GBP.
During 2013-2017 8 building societies were closed down:
|Barnsley Building Society (closed)||2013|
|Britannia Building Society (closed)||2013|
|Century Building Society (closed)||2013|
|City of Derry Building Society (closed)||2014|
|Derbyshire Building Society (closed)||2013|
|Dunfermline Building Society (closed)||2014|
|Kent Reliance Building Society (closed)||2013|
|Shepshed Building Society (closed)||2014|