The first building society to be established was Ketley's Building Society, founded by Richard Ketley, the landlord of the Golden Cross inn, in 1775.
By 1781 three more societies had been established in Birmingham, with a fourth in the nearby town of Dudley; and 19 more formed in Birmingham between 1782 and 1795.
By 1781 three more societies had been established in Birmingham, with a fourth in the nearby town of Dudley; and 19 more formed in Birmingham between 1782 and 1795.
The first outside the English Midlands was established in Leeds in 1785. Most of the original societies were fully terminating, where they would be dissolved when all members had a house: the last of them, First Salisbury and District Perfect Thrift Building Society, was wound up in March 1980.
By 1781 three more societies had been established in Birmingham, with a fourth in the nearby town of Dudley; and 19 more formed in Birmingham between 1782 and 1795.
In the 1830s and 1840s a new development took place with the permanent building society, where the society continued on a rolling basis, continually taking in new members as earlier ones completed purchases, such as Leek United Building Society.
In the 1830s and 1840s a new development took place with the permanent building society, where the society continued on a rolling basis, continually taking in new members as earlier ones completed purchases, such as Leek United Building Society.
The main legislative framework for the building society was the Building Societies Act 1874, with subsequent amending legislation in 1894, 1939 (see Coney Hall), and 1960. In their heyday, there were hundreds of building societies: just about every town in the country had a building society named after that town.
The main legislative framework for the building society was the Building Societies Act 1874, with subsequent amending legislation in 1894, 1939 (see Coney Hall), and 1960. In their heyday, there were hundreds of building societies: just about every town in the country had a building society named after that town.
The main legislative framework for the building society was the Building Societies Act 1874, with subsequent amending legislation in 1894, 1939 (see Coney Hall), and 1960. In their heyday, there were hundreds of building societies: just about every town in the country had a building society named after that town.
The main legislative framework for the building society was the Building Societies Act 1874, with subsequent amending legislation in 1894, 1939 (see Coney Hall), and 1960. In their heyday, there were hundreds of building societies: just about every town in the country had a building society named after that town.
Terminating loans were still available and used inside the permanent businesses by staff up until the 1980s because their existence was not widely known after the early 1960s.
The first outside the English Midlands was established in Leeds in 1785. Most of the original societies were fully terminating, where they would be dissolved when all members had a house: the last of them, First Salisbury and District Perfect Thrift Building Society, was wound up in March 1980.
With three further mergers in each of 2009 and 2010, and a demutualisation and a merger in 2011, as of 2020 there are now 44 building societies. ===Demutualisation=== In the 1980s, changes to British banking laws allowed building societies to offer banking services equivalent to normal banks.
Moreover, by no means are all mutual managers incompetent, and conversions allows the bank to expand more easily and to grant executive stock options that are valuable to skilled managers". Instead of deploying their margin advantage as a defence of mutuality, around 1980 building societies began setting mortgage rates with reference to market clearing levels.
Terminating loans were still available and used inside the permanent businesses by staff up until the 1980s because their existence was not widely known after the early 1960s.
Because of strict regulations on banks, building societies flourished until the deregulation of the Australian financial industry in the 1980s.
there was virtually no difference between banks and building society 'listed' interest rates for home finance mortgage lending between 1984 and 1997.
The management of a number of societies still felt that they were unable to compete with the banks, and a new Building Societies Act was passed in 1986 in response to their concerns.
The deregulating Building Societies Act 1986 contained an anti-carpetbagger provision in the form of a two-year rule.
Some listed on the London Stock Exchange, while others were acquired by larger financial groups. The process began with the demutualisation of the Abbey National Building Society in 1989.
But, before the 1989 Abbey National Building Society demutualisation, the courts found against the two-year rule after legal action brought by Abbey National itself to circumvent the intent of the legislators.
Of the first major conversion of the Abbey in 1989, Kay (1991) observed: In the end, after a number of large demutualisations, and pressure from carpetbaggers moving from one building society to another to cream off the windfalls, most of the societies whose management wished to keep them mutual modified their rules of membership in the late 1990s.
The Thatcher Conservative government declined to introduce amending legislation to make good the defect in the 'two-year rule'. ===1980s and 1990s=== Building societies, like mutual life insurers, arose as people clubbed together to address a common need interest; in the case of the building societies, this was housing and members were originally both savers and borrowers.
Of the first major conversion of the Abbey in 1989, Kay (1991) observed: In the end, after a number of large demutualisations, and pressure from carpetbaggers moving from one building society to another to cream off the windfalls, most of the societies whose management wished to keep them mutual modified their rules of membership in the late 1990s.
Then, from 1995 to late 1999, eight societies demutualised accounting for two-thirds of building societies assets as at 1994.
Then, from 1995 to late 1999, eight societies demutualised accounting for two-thirds of building societies assets as at 1994.
there was virtually no difference between banks and building society 'listed' interest rates for home finance mortgage lending between 1984 and 1997.
Bristol & West mortgages ceased trading on 10 January 2009. |- | Halifax || converted to plc || || 1997 || Became part of HBOS in 2001, which itself became part of Lloyds Banking Group in 2009.
Trading name still in use. |- | Northern Rock || converted to plc || Virgin MoneyNorthern Rock (Asset Management) || 1997 || Nationalised following near bankruptcy in February 2008, due to the financial crisis of 2007–2008.
Most of the business bought by Virgin Money UK in January 2012, with remaining riskier mortgage business retained by the government and renamed NRAM plc (now Landmark Mortgages Limited). |- | The Woolwich || converted to plc || Barclays || 1997 || Now part of Barclays plc.
Then, from 1995 to late 1999, eight societies demutualised accounting for two-thirds of building societies assets as at 1994.
Woolwich brand name now only used for mortgages from Barclays with the Woolwich branch network merging with that of Barclays in 2007. |- | Birmingham Midshires || taken over by || Halifax || 1999 || Now owned by Lloyds Banking Group.
The brand name is still retained, but running entirely by post and internet. |- | Bradford & Bingley || converted to plc || || 2000 || Nationalisation with sale of savings book to Abbey (now Santander). |} ====No longer exist==== The following is an incomplete list of building societies in the United Kingdom that no longer exist independently, since they either merged with or were taken over by other organisations.
Bristol & West mortgages ceased trading on 10 January 2009. |- | Halifax || converted to plc || || 1997 || Became part of HBOS in 2001, which itself became part of Lloyds Banking Group in 2009.
(Tayler 2003) Managements promoting demutualisation also thereby met managerial objectives because the end of mutuality brought joint stock company (plc) style remuneration committee pay standards and share options.
The number of societies in the UK fell by four during 2008 due to a series of mergers brought about, to a large extent, by the consequences of the financial crisis of 2007–2008.
Trading name still in use. |- | Northern Rock || converted to plc || Virgin MoneyNorthern Rock (Asset Management) || 1997 || Nationalised following near bankruptcy in February 2008, due to the financial crisis of 2007–2008.
Woolwich brand name now only used for mortgages from Barclays with the Woolwich branch network merging with that of Barclays in 2007. |- | Birmingham Midshires || taken over by || Halifax || 1999 || Now owned by Lloyds Banking Group.
At the start of 2008, there were 59 building societies in the UK, with total assets exceeding £360 billion.
The number of societies in the UK fell by four during 2008 due to a series of mergers brought about, to a large extent, by the consequences of the financial crisis of 2007–2008.
These powers have been used by the Britannia in 2009 and Kent Reliance in 2011 leading to their demutualisation. Prior to 31 December 2010, deposits with building societies of up to £50,000 per individual, per institution, were normally protected by the Financial Services Compensation Scheme (FSCS), but Nationwide and Yorkshire Building Societies negotiated a temporary change to the terms of the FSCS to protect members of the societies they acquired in late 2008/early 2009.
Trading name still in use. |- | Northern Rock || converted to plc || Virgin MoneyNorthern Rock (Asset Management) || 1997 || Nationalised following near bankruptcy in February 2008, due to the financial crisis of 2007–2008.
With three further mergers in each of 2009 and 2010, and a demutualisation and a merger in 2011, as of 2020 there are now 44 building societies. ===Demutualisation=== In the 1980s, changes to British banking laws allowed building societies to offer banking services equivalent to normal banks.
These powers have been used by the Britannia in 2009 and Kent Reliance in 2011 leading to their demutualisation. Prior to 31 December 2010, deposits with building societies of up to £50,000 per individual, per institution, were normally protected by the Financial Services Compensation Scheme (FSCS), but Nationwide and Yorkshire Building Societies negotiated a temporary change to the terms of the FSCS to protect members of the societies they acquired in late 2008/early 2009.
The amended terms allowed former members of multiple societies which merge into one to maintain multiple entitlements to FSCS protection until 30 September 2009 (later extended to 30 December 2010), so (for example) a member with £50,000 in each of Nationwide, Cheshire and Derbyshire at the time of the respective mergers would retain £150,000 of FSCS protection for their funds in the merged Nationwide.
Bristol & West mortgages ceased trading on 10 January 2009. |- | Halifax || converted to plc || || 1997 || Became part of HBOS in 2001, which itself became part of Lloyds Banking Group in 2009.
With three further mergers in each of 2009 and 2010, and a demutualisation and a merger in 2011, as of 2020 there are now 44 building societies. ===Demutualisation=== In the 1980s, changes to British banking laws allowed building societies to offer banking services equivalent to normal banks.
These powers have been used by the Britannia in 2009 and Kent Reliance in 2011 leading to their demutualisation. Prior to 31 December 2010, deposits with building societies of up to £50,000 per individual, per institution, were normally protected by the Financial Services Compensation Scheme (FSCS), but Nationwide and Yorkshire Building Societies negotiated a temporary change to the terms of the FSCS to protect members of the societies they acquired in late 2008/early 2009.
The amended terms allowed former members of multiple societies which merge into one to maintain multiple entitlements to FSCS protection until 30 September 2009 (later extended to 30 December 2010), so (for example) a member with £50,000 in each of Nationwide, Cheshire and Derbyshire at the time of the respective mergers would retain £150,000 of FSCS protection for their funds in the merged Nationwide.
Hastings Building Society merged with SBS Bank in October 2010, but with the Hastings Building Society brand continuing to operate as a building society under the name of HBS Bank.
With three further mergers in each of 2009 and 2010, and a demutualisation and a merger in 2011, as of 2020 there are now 44 building societies. ===Demutualisation=== In the 1980s, changes to British banking laws allowed building societies to offer banking services equivalent to normal banks.
These powers have been used by the Britannia in 2009 and Kent Reliance in 2011 leading to their demutualisation. Prior to 31 December 2010, deposits with building societies of up to £50,000 per individual, per institution, were normally protected by the Financial Services Compensation Scheme (FSCS), but Nationwide and Yorkshire Building Societies negotiated a temporary change to the terms of the FSCS to protect members of the societies they acquired in late 2008/early 2009.
Recent conversions have included Heritage Bank which converted from building society to bank in 2011, Hume in 2014, while Wide Bay Building Society became Auswide Bank and IMB followed suit in 2015, and Greater Building Society became Greater Bank in 2016.
Most of the business bought by Virgin Money UK in January 2012, with remaining riskier mortgage business retained by the government and renamed NRAM plc (now Landmark Mortgages Limited). |- | The Woolwich || converted to plc || Barclays || 1997 || Now part of Barclays plc.
Most such building societies are supervised for compliance with the terms of their debt securities by trustees appointed under securities legislation, and those trustees have various reporting requirements to the Reserve Bank. Building societies that accept deposits only from offshore customers are not regulated under the Non-bank Deposit Takers Act 2013 or New Zealand's financial markets legislation.
Recent conversions have included Heritage Bank which converted from building society to bank in 2011, Hume in 2014, while Wide Bay Building Society became Auswide Bank and IMB followed suit in 2015, and Greater Building Society became Greater Bank in 2016.
Recent conversions have included Heritage Bank which converted from building society to bank in 2011, Hume in 2014, while Wide Bay Building Society became Auswide Bank and IMB followed suit in 2015, and Greater Building Society became Greater Bank in 2016.
Recent conversions have included Heritage Bank which converted from building society to bank in 2011, Hume in 2014, while Wide Bay Building Society became Auswide Bank and IMB followed suit in 2015, and Greater Building Society became Greater Bank in 2016.
A second was registered in late 2019. Swaziland Building Society: Registered in the 60s, this is the first and oldest building society in Eswatini.
With three further mergers in each of 2009 and 2010, and a demutualisation and a merger in 2011, as of 2020 there are now 44 building societies. ===Demutualisation=== In the 1980s, changes to British banking laws allowed building societies to offer banking services equivalent to normal banks.
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