The Building Societies Association has launched a growth plan to help boost financial resilience across the UK and expand home ownership.
The plan calls on government and regulators to improve access to mutual capital by removing barriers that prevent building societies from financing growth and innovation, and to introduce appropriate capital regulations that reflect the sector’s lower-risk approach to lending and enable fair competition with banks.
The changes will enable building societies to “expand their role as champions of ordinary working people”, the BSA said, and help more people to buy a home.
“We are not asking for special treatment”, said BSA chief executive Robin Fieth.
“We are asking for recognition of the vital role building societies and other financial mutuals play in delivering inclusive growth, financial resilience and long-term value for communities across the whole of the UK. We are asking for a seat at the policy table.”
Building societies make up around a third (35%) of all UK financial high street branches and serve 27 million members. As well as representing 29% of the UK mortgage market and 37% of al first-time buyer lending, building societies represent an important part of their communities, the BSA says.
“Building societies are customer-owned financial service providers rooted in communities across the UK. They help people to build their financial resilience and achieve their aspirations, particularly home ownership.
“Building societies should be involved in relevant policy development at a national and local level. They can bring member insights to critical issues such as local housing development, improving the energy efficiency of homes, financial education and inclusion, and the sustainability of our high streets.”
The BSA is asking the government to consider a range of measures, including revitalising mutual capital to enable the use of capital instruments and widen the range of investors, reform legislation to enable building societies to adapt and operate on an equal basis with competitors, and remove regulatory barriers to avoid disproportionate burdens and costs.
“As part of the landscape and mortgage rule reviews, consider how the mutual sector could be enabled to do more to support the Government’s objectives around growth and homeownership”, the plan suggests.
“In 1775, our founders were the disruptors and innovators of their time”, said Fieth.
“Today, that remains the case. Our growth plan urges the government to stand by its manifesto pledge to double the mutual and co-operative economy in the UK and put building societies at the heart of a fairer, more resilient economy for everyone.”
The BSA represents all 42 building societies in the UK, including both mutual-owned banks and seven of the largest credit unions. Building societies and mutual-owned banks have total assets of almost £650 billion and hold over £485 billion of retail deposits (23% of the UK total).
Last year, societies contributed £7.2 billion directly to GDP.
