Building society 4776 226180979 2008-07-17T05:16:47Z 86.168.81.59 /* List of building societies in the United Kingdom that no longer exist */ A '''building society''' is a financial institution, owned by its members, that offers [[banking]] and other [[financial services]], especially [[mortgage loan|mortgage lending]]. The term ''building society'' first arose in the 19th century, in the [[United Kingdom]], from working men's [[co-operative]] savings groups: by pooling savings, members could buy or build their own homes. In the UK today building societies actively compete with [[bank]]s for most "banking services" especially mortgage lending and [[deposit account|deposit]] accounts. [[As of 2007]] there are 60 building societies in the UK with total assets exceeding £305 billion<ref name=multiple>[http://www.bsa.org.uk/ Building Societies Association]</ref>. == Origins == The original Building Society was formed in [[Birmingham]] in 1774. Most of the original societies were fully ''terminating'', where they would be dissolved when all members had a house: the last of them was wound up in 1980. 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 Society Act'' of 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. Over succeeding decades the number of societies has decreased, as various societies merged to form larger ones, often renaming in the process. Most of the existing larger building societies are the end result of the mergers of many smaller societies. == 1980s and 1990s == In the 1980s, British banking laws were changed to allow building societies to offer banking services equivalent to normal [[bank]]s. The management of a number of societies still felt that they were unable to compete with the banks, and a new Building Society Act was passed in response to their concerns. This permitted societies to '[[demutualise]]'. If more than 75% of members voted in favour, the building society would then become a [[limited company]] like any other. Members' mutual rights were exchanged for shares in this new company. A number of the larger societies made such proposals to their members and all were accepted. Some became independent companies quoted on the [[London Stock Exchange]], others were acquired by larger financial groups. A movement arose whereby investors would open a savings account with a [[mutual organisation|mutual]] building society, thereby getting voting rights in the society, and pressurise for a vote on [[demutualisation]], with the intent of getting a windfall payment as a result. A number of societies' members and managers were very unhappy about such investors, who were termed ''[[carpetbagger]]s'', maintaining that as mutual societies, they could supply better and cheaper home loans than the banks and demutualised societies, as they only had to make a profit to cover their operational costs, and had no need to generate an additional profit to return to shareholders. 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 remaining societies modified their rules of membership in the late 1990s. The method usually adopted were membership rules to ensure that anyone newly joining a society would, for the first few years, be unable to get any profit out of a demutualisation. With the chance of a quick profit removed, the demutualisations have slowed considerably, as of [[December 2001]]. One academic study (Heffernan 2003) found that demutualised societies' pricing behaviour on deposits and mortgages was more favourable to shareholders than to customers, with the remaining mutual building societies offering consistently better rates. <ref>{{cite web | title = The Effect of UK Building Society Conversion on Pricing Behaviour (March 2003) | author = Shelagh Heffernan | publisher = Faculty of Finance, CASS Business School, City of London | url = http://www.cass.city.ac.uk/facfin/papers/WP2003/Mutuals-WP.pdf | format = pdf | accessdate = 2007-10-10 }}</ref> Deposits up to £35,000 with building societies are normally protected by the [[Financial Services Compensation Scheme]]. == List of building societies in the United Kingdom that have demutualised == The following is an incomplete list of building societies in the United Kingdom that have since demutualised and hence become banks<ref>[http://www.bsa.org.uk/consumer/factsheets/100010.htm Building Society Takeovers and Flotations] Building Societies Association website (Retrieved [[5 April]] [[2007]])</ref>. It is shown in order of demutualisation. Some of these institutions have since been taken over by larger financial services companies. {| border=1 style="border-collapse: collapse;" |- bgcolor=cccccc !Building Society!!Date!!Details!!Current position |- | [[Abbey National]] || 1989 || Converted to [[PLC UK|plc]] || now known as "Abbey", a subsidiary of [[Banco Santander]] |- | [[Cheltenham and Gloucester]] || 1994 || takeover by <br>[[Lloyds Bank]] || Now part of [[Lloyds TSB]] although C&G still have a branch network. |- | [[National & Provincial Building Society]] || 1995 || takeover by <br> [[Abbey National]] || Business merged into Abbey National, name no longer used |- | [[Alliance & Leicester]] || 1997 || Converted to plc || Remains independent but has agreed to a takeover by [[Banco Santander]]. If the takeover does occur it will be rebranded as Abbey. |- | [[Bristol and West]] || 1997 || takeover by the <br> [[Bank of Ireland]] || Remains a division of Bank of Ireland but its savings balances and<br> branch network were transferred to the [[Britannia Building Society]] in 2005 |- | [[Halifax (bank)|Halifax]] || 1997 || Converted to plc || Now a division of [[Bank of Scotland plc]] An Act of Parliament was used to restructure HBOS plc's subsidiaries into a more simplified structure in September 2007. |- | [[Northern Rock]] || 1997 || Converted to plc || [[Nationalisation|Nationalised]] in February 2008 following near bankruptcy due to the [[Subprime mortgage crisis]]. |- | [[The Woolwich]] || 1997 || Converted to plc || Now part of [[Barclays plc]]. Woolwich brand name now only used for mortgages from Barclays with the Woolwich branch network merging with that of Barclays in 2007. |- | [[Birmingham Midshires]] || 1999 || takeover by the [[Halifax (bank)|Halifax]] || Now a division of [[Bank of Scotland plc]] |- | [[Bradford & Bingley]] || 2000 || Converted to plc || Remains independent |} ==List of building societies in the United Kingdom that no longer exist== {{mainarticle|List of former building societies}} The following is an incomplete list of building societies in the United Kingdom that no longer exist, since they either merged with or were taken over by other building societies <ref> [http://www.bsa.org.uk/docs/consumerpdfs/mergerschronolog.pdf Building Society Mergers and Conversions since 1980] Building Societies Association website (Retrieved [[5 April]] [[2007]])</ref>. {| cellpadding="1" cellspacing="3" width="91%" |- |*[[Abbey Road Building Society]] and <br> [[National Building Society]] || || merged to form the || [[Abbey National Building Society]] || in 1944 || || |- |*[[Bingley Permanent Building Society]] and <br> [[Bradford Equitable Building Society]] || || merged to form the || [[Bradford & Bingley Building Society]] || in 1964 || || |- |*[[Co-operative Permanent Building Society]] || || changed its name to || [[Nationwide Building Society]] || in 1970 || || |- |*[[Bedfordshire Building Society]] and <br> [[Temperance Permanent]]|| || merged to form || [[Gateway Building Society]] || in 1974<ref>http://www.bsa.org.uk/docs/consumerpdfs/yearbooknamechangepart1.pdf retrieved 2008-07-12.</ref><ref>The Temperance Permanent was so-called because the directors were required to sign [[Theobald Mathew (temperance reformer)|the pledge]], a requirement which was dropped with the merger and name-change &mdash; to the reported dismay of some members. [''[[The Times]]'', Friday, Apr 25, 1975; pg. 4; Issue 59379; col E, 'Temperance abandoned by building society'. Retrieved from InfoTrac on July 17, 2008.]</ref> || || |- |*[[Huddersfield & Bradford Building Society]] and <br> [[West Yorkshire Building Society]] || || merged to form || [[Yorkshire Building Society]] || in 1982 || || |- |*[[Burnley Building Society]] and <br> [[Provincial Building Society]] || || merged to form the || [[National & Provincial Building Society]] || in 1984 || || |- |*[[Alliance Building Society]] and <br> [[Leicester Building Society]] || || merged to form the || [[Alliance & Leicester Building Society]] || in 1985 || || |- |*[[Birmingham & Bridgwater Building Society]] and <br> [[Midshires Building Society]] || || merged to form the || [[Birmingham Midshires Building Society]] || in 1986 || || |- |*[[Anglia Building Society]] and <br> [[Nationwide Building Society]] || || merged to form <br> which reverted to the || [[Nationwide Anglia Building Society]] <br> [[Nationwide Building Society]] || in 1987 <br> in 1991 || || |- |*[[Hendon Building Society]] || || was taken over by || [[Bradford & Bingley Building Society]] || in 1991 || || |- |*[[Heart of England Building Society]] || || merged with the || [[Cheltenham & Gloucester Building Society]] || in 1993 || || |- |*[[Leeds Permanent Building Society]] || || merged with the || [[Halifax (bank)|Halifax Building Society]] || in 1995 || || |- |*[[Staffordshire Building Society]] || || merged with the || [[Portman Building Society]] || in 2003 || || |- |*[[Lambeth Building Society]] || || merged with the || [[Portman Building Society]] || in 2006 || || |- |*[[Mercantile Building Society]] || || merged with the || [[Leeds Building Society]] || in 2006 || || |- |*[[Universal Building Society]] || || merged with the || [[Newcastle Building Society]] || in 2006 || || |- |*[[Portman Building Society]] || || merged with the || [[Nationwide Building Society]] || in 2007 || || |} ==Remaining building societies in the United Kingdom== The remaining building societies are: (Total group assets of building societies) Source: [[Building Societies Association]]<ref name="multiple" /> {| class="wikitable" |- !colspan=6 align=center|'''Building societies''' |- ! ! Name ! Asset share to Apr 2008 ! Asset share to Jan 2007 |- | 1 || [[Nationwide Building Society]]|| £158,660m || £150,586m |- | 2 || [[Britannia Building Society]]|| £36,827m || £32,431m |- | 3 || [[Yorkshire Building Society]]|| £20,498m || £16,298m |- | 4 || [[Coventry Building Society]]*|| £14,909m || £11,090m |- | 5 || [[Chelsea Building Society]]|| £13,087m || £9,656m |- | 6 || [[Skipton Building Society]]|| £12,531m || £9,156m |- | 7 || [[Leeds Building Society]]|| £9,181m || £7,065m |- | 8 || [[West Bromwich Building Society]]|| £8,319m || £7,208m |- | 9 || [[Derbyshire Building Society]]|| £7,094m || £5,097m |- | 10 || [[Principality Building Society]]|| £5,853m || £4,384m |- | 11 || [[Cheshire Building Society]]|| £4,976m || £4,678m |- | 12 || [[Newcastle Building Society]]|| £4,816m || £3,863m |- | 13 || [[Norwich & Peterborough Building Society]]|| £4,308m || £3,403m |- | 14 || [[Dunfermline Building Society]]|| £3,303m || £2,318m |- | 15 || [[Stroud & Swindon Building Society]]|| £3,172m || £2,514m |- | 16 || [[Nottingham Building Society]]|| £3,026m || £2,428m |- | 17 || [[Scarborough Building Society]]|| £2,298m || £1,733m |- | 18 || [[Kent Reliance Building Society]]|| £2,134m || £1,619m |- | 19 || [[Progressive Building Society]]*|| £1,495m || £1,248m |- | 20 || [[Cumberland Building Society]] || £1,283m || £1,185m |- | 21 || [[National Counties Building Society]] || £1,177m || £956m |- | 22 || [[Furness Building Society]] || £845m || £770m |- | 23 || [[Cambridge Building Society]] || £844m || £751m |- | 24 || [[Leek United Building Society]] || £800m || £661m |- | 25 || [[Manchester Building Society]] || £792m || £565m |- | 26 || [[Saffron Building Society]] || £784m || £662m |- | 27 || [[Hinckley & Rugby Building Society]] || £712m || £649m |- | 28 || [[Darlington Building Society]] || £689m || £548m |- | 29 || [[Newbury Building Society]] || £605m || £565m |- | 30 || [[Monmouthshire Building Society]] || £527m || £485m |- | 31 || [[Melton Mowbray Building Society]]* || £439m || £385m |- | 32 || [[Market Harborough Building Society]] || £419m || £380m |- | 33 || [[Ipswich Building Society]]* || £403m || £321m |- | 34 || [[Barnsley Building Society]]* || £376m || £346m |- | 35 || [[Marsden Building Society]] || £356m || £343m |- | 36 || [[Tipton & Coseley Building Society]]* || £350m || £287m |- | 37 || [[Hanley Economic Building Society]] || £341m || £322m |- | 38 || [[Mansfield Building Society]]* || £286m || £229m |- | 39 || [[Teachers' Building Society]] || £271m || £240m |- | 40 || [[Loughborough Building Society]]* || £260m || £239m |- | 41 || [[Chesham Building Society]]* || £254m || £196m |- | 42 || [[Dudley Building Society]] || £251m || £228m |- | 43 || [[Vernon Building Society]] || £246m || £217m |- | 44 || [[Scottish Building Society]] || £221m || £211m |- | 45 || [[Bath Investment & Building Society]] || £190m || £157m |- | 46 || [[Chorley & District Building Society]]* || £160m || £147m |- | 47 || [[Harpenden Building Society]]* || £158m || £126m |- | 48 || [[Holmesdale Building Society]]* || £149m || £142m |- | 49 || [[Stafford Railway Building Society]]* || £148m || £132m |- | 50 || [[Beverley Building Society]]* || £145m || £117m |- | 51 || [[Buckinghamshire Building Society]]* || £139m || £135m |- | 52 || [[Swansea Building Society]] || £120m || £95m |- | 53 || [[Earl Shilton Building Society]]* || £92m || £88m |- | 54 || [[Shepshed Building Society]] || £86m || £79m |- | 55 || [[Penrith Building Society]]* || £78m || £74m |- | 56 || [[Ecology Building Society]]* || £75m || £63m |- | 57 || [[Catholic Building Society]] * || £44m || £38m |- | 58 || [[City of Derry Building Society]]* || £36m || £28m |- | 59 || [[Century Building Society]]* || £22m || £22m |- |} '''*''' These societies do not form part of a corporate business group, although they may own other businesses. ==Other countries== *'''Australia:''' In [[Australia]], building societies evolved along British lines. Because of strict regulations on [[bank]]s, building societies flourished until the deregulation of the Australian financial industry in the 1980s. Eventually many of the smaller building societies disappeared, while some of the largest (such as [[St. George Bank|St. George]]) officially attained the status of banks. *'''Finland:''' In [[Finland]] the [[Mortgage Society of Finland]], a permanent building society, was founded in [[1860]]. Since [[2002]] mortgage loans are handled by [[Suomen AsuntoHypoPankki]], the licensed bank owned by the society. *'''Ireland:''' In [[Ireland]], the three building societies are as follows; [[EBS Building Society]], [[ICS Building Society]], and [[Irish Nationwide Building Society]] *'''Jamaica:''' In [[Jamaica]], four building societies compete with commercial banks and credits unions for most consumer financial services. *'''United States:''' In the [[United States]], the [[savings and loan association]]s have a similar organisation and purpose. ==References== {{Wikisource1911Enc|Building Societies}} {{reflist}} ==See also== *[[Cooperative banking]] *[[Mutual organisation]] *[[Mutualism (economic theory)|Mutualism]] *[[Demutualisation]] ==External links== *[http://www.bsa.org.uk/ Building Societies Association] *[http://www.bsa.org.uk/consumer/factsheets/100009.htm The History of Building Societies] from the Building Societies Association website. {{UK Building Societies}} {{Scottish Building Societies}} {{Irish Building Societies}} {{New Zealand Building Societies}} {{Co-operatives}} [[Category:Building societies| ]] [[Category:Cooperatives]] [[Category:Financial services]] [[Category:Financial institutions]] [[Category:Mutual organizations]] [[Category:Social economy]] [[cs:Stavební spoření]] [[de:Bausparkasse]] [[ja:住宅金融組合]] [[pl:Building society]] [[ru:Строительная сберегательная касса]]