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 ?
Adrian Coles, Director-General of the Building Societies Association, said: "The BSA welcomes the mergers of Nationwide Building Society with Derbyshire and Cheshire Building Societies.
But Sarah Clark from the Building Societies Association defended the cash bag policy.
Of course, the manifest unfairness of a blanket prohibition against withdrawal by a member who lost his source of income or got into financial difficulties through no fault of his own (or who died) was apparent, and all terminating building societies appear to have had arrangements for withdrawal, but only with "much difficulty and delay.
Building societies can currently only source 50% of their funding from non-members.
The loss surrounds the Financial Services Compensation Scheme, which is paid into by all banks and building societies to cover customers if a financial provider is struggling.
Historically, building societies had very strong linkswith the local community.
NEXT year will see at least five further mergers among the United Kingdom's 59 remaining building societies, as mutuals are forced to get leaner and smarter to survive, according to accountants Deloitte.
Three building societies - Mercantile, Universal and Lambeth - disappeared this year following mergers with Leeds, Newcastle and Portman respectively.
BUILDING societies in the UK have recorded their strongest growth for seven years, according to professional services firm KPMG.
Many building societies have tried to thwart the get-rich-quick merchants by insisting on minimum opening balances - as high as pounds 5,000 - or limiting new accounts to local people.
Portman Building Society, one of the largest building societies and mortgage lenders in the United Kingdom, announced it has deployed CallXpress(R), an industry-leading unified communications product by Applied Voice & Speech Technologies Inc.
BUILDING societies are entering a renewed period of potential growth and success which could lead to them fulfilling a new regional banking role by the end of the decade.

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