The
pros and cons of mutual building societies - over banks and
other mortgage lenders
Building Society Pros:
·
Owned by the members – members have a direct
say in decision making.
· More democratic. Every member
has a vote
· Works for the interests of the members,
not of the shareholders and financiers.
· Often offers better saving and borrowing
rates.
· An investment for the long term
– offering security and dependability.
Building Society Cons:
·
While democratic in theory member control is often a myth
with the real power resting with managerial cliques.
· Members’ share is locked into
the society. One of the arguments for demutualisation is that
the members’ share is freed up in the shape of a windfall.
· Members bear the risks, as well
as the rewards, of the market and are not protected by the
shareholders or limited company status.
· There is no access to external equity capital
which societies argue is essential to competing in the modern
financial market.
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