Professor Carl Chinn, a social historian, author and radio presenter, has emphasised the critical role of mutual lenders in maintaining a stable and diverse financial sector, at a recent Building Societies Association (BSA) event.
On 28th January 2025, the BSA marked the 250th anniversary of the building society sector, reflecting on the rich history and enduring legacy of the mutual model.
Robin Fieth, CEO of the BSA, said: “250 years later, building societies are still providing a safe home for people’s savings and using these savings as means for others to buy a home, thereby creating thriving communities.”
The discussion highlighted Richard Ketley, the founder of the first known building society, who exemplified social mobility by transitioning from a publican to a self-identified “gentleman.”
Chinn explained that early building societies brought together individuals from various social and economic backgrounds, including skilled workers, shopkeepers, and small traders.
This collaboration facilitated social mobility and cooperation among the industrious classes.
Property ownership was linked to voting rights before the 1832 Reform Act, further underscoring the role of building societies in empowering working-class individuals politically.
Professor Chinn said: “Birmingham was a hub of radicalism, with many people campaigning for the right to vote and others desiring an MP specifically for Birmingham; it was also a centre for numerous small businesses.”
From these beginnings, the building society movement rapidly expanded across industrial towns and cities in the late 18th and early 19th Centuries.
Chinn also highlighted the significance of Sarah Northwood, a publican involved in one of the first building societies in Birmingham, emphasising that she should receive recognition for her contributions, as well as women involved in similar initiatives in Sheffield.
Chinn said: “Women are hidden from history, and what’s interesting, I found a woman who was a publican at one of the first building societies and she has a street named after her in Birmingham.
“Her name is Sarah Northwood, I think Sarah Northwood deserves to be honoured.”
By 1845, there were more than 1,000 building societies in operation, transforming homeownership.
Chinn said: “The aim was to encourage and protect building societies, recognising they were established by the industrious classes to raise, through small regular subscriptions, a fund to assist members in obtaining a small freehold release of property.”
He added that while the movement faced legal challenges and shifts over the decades, the core principles of mutuality and collective empowerment have remained at the heart of building societies’ legacy.
Recent research from the Building Societies Association (BSA) revealed that building societies secured 72% of UK mortgage growth in 2024.
In the six months leading up to September 2024, mutuals increased their mortgage balances by £11.7bn, assisting 113,000 first-time buyers within the year and a total of 307,500 over three years.
Nearly 44% of their residential lending went to first-time buyers, and with £395bn in residential mortgages, building societies support 3.5 million families and individuals, accounting for 24% of the UK’s outstanding residential mortgage market.
In 2023, building society savers earned £2.1bn more in interest compared to average bank offers.
The research found that 72% of building society members view their provider as integral to their community, compared to 54% of bank customers.
The recent UK Savings Week encouraged better savings habits, with 70% of participants taking positive actions and 26% starting to save for the first time.
Fieth said: “We start our 250th year with a fantastic commitment from the Government to double the size of the mutual and cooperative sector.
“This recognition that our business model is different and benefits consumers presents a unique opportunity to place building societies at the heart of Britain’s economy.
“Today’s building societies have never lost sight of their purpose.
“They will continue to tackle the challenges of low household financial resilience and difficulties in achieving and maintaining homeownership with innovative and customer-focused products and services.
“It feels like this is our time, and I’m in no doubt that there will still be building societies providing a safe home for savings and the means for ordinary people to buy their own home in another 250 years.”
