building society


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Building Society

A bank owned by its depositors and borrowers, who are called members. Building societies primarily make mortgage loans to their members. The first building societies were started in England in the late 18th century; most of them were voluntarily dissolved when all their members owned houses. Building societies became able to conduct banking services other than deposits and loans in the mid-1980s. Since then, most of them have demutualized and have become regular banks. In 2010, there were approximately 50 building societies left in the United Kingdom.

building society

a financial institution which offers a variety of savings accounts to attract deposits, mainly from the general public, and which specializes in the provision of long-term MORTGAGE loans used to purchase property In recent years, many of the larger UK building societies have moved into the estate agency business. Additionally, they have entered into arrangements with other financial institutions whereby they are enabled to provide their depositors with limited banking facilities (the use of cheque books and credit cards, for instance) and other financial services, a development which has been given added impetus by the BUILDING SOCIETIES ACT 1986. Most notably, major building societies such as the Abbey National and Halifax have taken advantage of changes introduced by the BUILDING SOCIETIES ACT, 1986 and the FINANCIAL SERVICES ACT, 1986 and have converted themselves into public JOINT STOCK COMPANIES setting themselves up as ‘financial supermarkets’ offering customers a banking service and a wide range of personal financial products, including insurance, personal pensions, unit trusts, individual savings accounts (ISAs) etc. This development has introduced a powerful new competitive impetus into the financial services industry, breaking down traditional ‘demarcation'boundaries in respect of ‘who does what’, allowing former building societies to ‘cross sell’ these services and products in competition with traditional providers such as the COMMERCIAL BANKS, INSURANCE COMPANIES, UNIT TRUSTS, etc. See ESTATE AGENT.

building society

a financial institution that offers a variety of savings accounts to attract deposits, mainly from the general public, and which specializes in the provision of long-term MORTGAGE loans used to purchase property. In recent years, many of the larger UK building societies have moved into the estate agency business. Additionally, they have entered into arrangements with other financial institutions that have enabled them to provide their depositors with limited banking facilities (the use of cheque books and credit cards, for instance) and other financial services, a development that has been given added impetus by the BUILDING SOCIETIES ACT 1986.

Most notably, major building societies, such as the Abbey National and Halifax, have taken advantage of changes introduced by the BUILDING SOCIETIES ACT 1986 and the FINANCIAL SERVICES ACT 1986 and have converted themselves into public JOINT-STOCK COMPANIES, setting themselves up as ‘financial supermarkets’ offering customers a banking service and a wide range of personal financial products, including insurance, personal pensions, unit trusts, individual savings accounts (ISAs), etc. This development has introduced a powerful new competitive impetus into the financial services industry, breaking down traditional ‘demarcation’ boundaries in respect of ‘who does what’, allowing former building societies to ‘cross-sell’ these services and products in competition with traditional providers such as the COMMERCIAL BANKS, INSURANCE COMPANIES, UNIT TRUSTS, etc.

Building society deposits constitute an important source of liquidity in the economy and count as ‘broad money’ in the specification of the MONEY SUPPLY. See FINANCIAL SYSTEM.

References in periodicals archive ?
From left, Middlesbrough's Darlington Building Society manager Louise Thorpe, Val Dickinson Middlesbrough Mayor Dave Budd |and chief executive Colin Fyfe
The society is now the second largest building society in the UK.
Other ways in which the Family Building Society will reflect 21st century family life include a special mortgage option for divorcees who are trying to start out again, called the "low start" mortgage.
I believe that the merger with Stroud & Swindon Building Society will help us build on recent success.
The building society model may not be 'sexy', but it is tried and tested and can thrive in difficult circumstances," said John Goodfellow, boss of the Skipton society.
Last week, we told how the building society offered the same plan to a frail 91 year-old woman.
More than 1million members of Britain's second biggest building society will get windfalls of up to pounds 500 each under a Members' Loyalty Bonus Scheme.
He has spent all his working life working in the mutual sector and has been instrumental in leading Darlington Building Society through difficult economic times.
The current climate has demonstrated the strength of the building society model," he said.
In fact, most building society customers automatically become a member/owner as soon as they open a savings account or take out a mortgage.
Darlington Building Society chief executive David Dodd will serve on the Building Societies Association (BSA) National Council for two years.