A Very Short History of British Building Societies
Building societies originated in the self help movement of 18th century Britain. Working men began to pool their funds in organisations from which they could borrow to build houses.
In the early days, once every member had a house the society would be closed – they were known as terminating societies. The “permanent” building societies we know today began when they started to accept deposits from members with no intention of building – they became institutions for saving and borrowing as well as mortgage providers.
The last terminating society only terminated in 1980
Building societies were fully mutual – in other words owned by the members and run for their benefit.
Mutuality was a successful and popular business model in the 19th and 20th century: well-known organisations such as the Co-op, John Lewis Partnership and the AA were mutual societies.
However by the end of the 1990s lifestyle and financial changes had led to many UK building societies demutualising and floating on the stock exchange.