Building Societies in the United Kingdom

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

Products and services are provided by British building societies to residents of the United Kingdom only.

Mortgages

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

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.

Other Products

Several building societies can also offer current accounts and credit cards (for example, Nationwide Building Society) and a range of insurance products.

Customer Service

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.

Interest Rates

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.

List of Building Societies in the United Kingdom

The list of building societies currently operating in the United Kingdom is shown below.

RankNameNumber of MembersTotal AssetsMortgages
31Bath Investment and Building Society9985.00 311.71 242.48
40Beverley Building Society13582.00 185.65 148.68
38Buckinghamshire Building Society10708.00 240.58 189.08
13Cambridge Building Society122824.00 1230.77 1060.50
2Coventry Building Society1857641.00 42572.50 35930.90
10Cumberland Building Society161702.00 2522.77 2027.12
21Darlington Building Society85549.00 585.77 481.91
27Dudley Building Society33357.00 397.39 315.22
43Earl Shilton Building Society12616.00 137.13 103.21
42Ecology Building Society9417.00 178.66 114.41
18Furness Building Society104195.00 898.75 763.68
26Hanley Economic Building Society18753.00 403.59 302.76
30Harpenden Building Society21827.00 314.70 197.95
19Hinkley and Rugby Building Society48500.00 740.46 618.55
41Holmesdale Building Society7826.00 183.51 144.66
20Ipswich Building Society70303.00 646.30 520.61
5Leeds Building Society806567.00 18484.00 15223.00
15Leek United Building Society90184.00 1039.42 795.89
34Loughborough Building Society25420.00 296.08 223.81
32Manchester Building Society15643.00 304.19 250.82
24Market Harborough Building Society34903.00 423.79 389.81
22Marsden Building Society42228.00 472.84 384.35
23Melton Mowbray Building Society42637.00 451.86 358.67
14Monmouthshire Building Society78474.00 1059.05 842.17
11National Counties Building Society58045.00 2021.78 1565.26
1Nationwide Building Society15500000.00 229098.00 177154.00
17Newbury Building Society67945.00 1008.66 843.40
9Newcastle Building Society344188.00 3762.10 2707.30
8Nottingham Building Society206178.00 3900.40 3368.80
44Penrith Building Society6756.00 107.45 80.73
6Principality Building Society538961.00 9262.60 7864.10
12Progressive Building Society109387.00 1787.92 1462.91
16Saffron Building Society117692.00 1019.91 842.49
25Scottish Building Society33095.00 420.18 318.44
4Skipton Building Society919060.00 21023.60 16666.20
35Swansea Building Society14912.00 275.38 201.34
36Teachers' Building Society12291.00 274.14 231.66
39The Chorley and District Building Society27323.00 233.12 178.28
28The Mansfield Building Society23048.00 368.09 290.50
37The Stafford Railway Building Society18287.00 263.14 170.60
29Tipton and Coseley Building Society33277.00 363.90 285.73
33Vernon Building Society34345.00 296.58 225.45
7West Bromwich Building Society432533.00 5781.50 4805.40
3Yorkshire Building Society2852000.00 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:

NameClosed On
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
 

See Also

External Links

  1. Building Societies Association