Unless you have been residing on a Pacific island for the last year, it will not have escaped your attention that the building society movement celebrates its 250th year in 2025.
As a building society based in the Midlands, our origins are deeply rooted in the region’s history. In 1775, at the start of the Industrial Revolution, the landlord of the Golden Cross Inn in Birmingham placed a tankard at the end of the bar, encouraging his regulars to pool their savings.
When there was enough money in the pot, they used it to buy land and build a home, drawing lots to determine which of them would get the home. They all carried on saving until they had built a home for each member of the group, a life-changing event for those families and their community, and the birth of the first ever building society.
This simple idea of people coming together to build stronger communities, create greater financial resilience and provide access to homeownership to the masses rather than the elite, remains at the heart of today’s building societies.
Fast forward to the six months up to September 2024, according to the Building Societies Association, building societies grew their mortgage balances by almost £12bn, accounting for 72% of all UK mortgage growth in the period. Also, during this time, building societies helped over 63,000 first-time buyers onto the property ladder.
For 250 years, building societies have supported communities and helped people achieve homeownership. Their core aims remain unchanged today, just as they were when the movement began.
However, with credit now easier to obtain and default on, and with more flexible ways to earn a living compared to 1775, building societies have become skilled at navigating this increased complexity and finding solutions for a wide range of borrowers.
Such flexibility is needed now more than ever with greater numbers of people suffering small credit blips.
For example, in the first three months of 2024, there were 274,000 County Court Judgements (CCJs) against individuals. Many were for small amounts – half were less than £600 and the Registry Trust estimates that more than 10% of the CCJs were for parking tickets.
Encouragingly, the latest Bank of England Credit Conditions Survey reported that default rates for total unsecured lending decreased in Q1 2025, and was expected to be unchanged in Q2. Within this, over the past three months, defaults for credit cards decreased and other loans were unchanged. Defaults for credit cards were expected to be unchanged and for other loans were expected to decrease in Q2.
However, despite such encouraging statistics from the Bank of England, the numbers who have defaulted will need to use lenders who understand such complexities and that’s where building societies can increasingly help. Arguably, we are becoming the lenders of choice for such borrowers.
Another sector of the population that can still find it difficult to get a mortgage is the self-employed.
As of early 2025, approximately 4.43 million people in the UK are self-employed, according to the latest data from the Office for National Statistics (ONS) which is a small increase from 4.33 million in January 2024.
Following the pandemic, many small businesses are still experiencing the aftereffects of this dramatic experience. As a building society, we can assess each application on its own merit to delve deeper into past, present and future circumstance by assessing individual applications on their own merits. This allows us to paint a bigger financial picture and, in many cases, find a responsible and appropriate reason to say yes, rather than a blanket no.
I talk to many of my peers at other building societies and almost all of them will testify that advisers are increasingly choosing a building society option for more complex residential cases due largely to these manual underwriting capabilities. A trend which is unlikely to change anytime soon. So, here’s to the next 250 years of building societies helping borrowers achieve their homeownership dreams.
Rob Oliver is director of distribution at Dudley Building Society
