What is a building society?
What is a building society?
A building society is a financial institution that's owned by its members as a mutual organisation. This is why we're also known as a 'mutual'.
The idea of mutual saving, or mutuality(*1), dates back to the 18th century when a group of friends decided to band together during trying times and pool their savings. This allowed them to buy some land and build houses.
The idea is still roughly the same 250 years later. As a building society built around our members, our goal is to help you save money and buy your own home. We deliver that through an increasingly diverse product range, drawing on our extensive experience and technological innovation.
As a building society that's here to help you, we like to keep things as simple and clear as possible. So, let's start with some of the most frequently asked questions about building societies and how they operate.
What is the difference between a bank and a building society?
Building societies and banks have many similarities. They're both places where people can save money, and they offer many of the same products and services.
The main difference between the two is that a building society is owned and run by its members, whereas a bank is owned by its shareholders. The theory behind member ownership is that it encourages us to reinvest in the business and our members. We have a greater focus on savings and mortgages to help people achieve their goals around home ownership and tackle other important hurdles in life.
What is the history of building societies?
The idea of a mutual first surfaced in 1775 in Birmingham with Ketley's Building Society. The members of Ketley's Building Society all paid a monthly subscription to a central funding pool that was used to support the construction of houses for all its members. From that point on, hundreds of building societies sprang up in virtually every town across the country to provide the same service.
Over time, the number of building societies began to decrease as many either dissolved (building societies used to close once all members had a house), merged or demutualised and were taken over by a listed bank. However, as of July 2023, there were still 42 building societies and seven credit unions in the UK (*2), catering to almost 26 million members and handling assets of more than £500 billion.
What is the history of Leeds Building Society?
Our origins date back to 1845 and the formation of the Leeds Union Operative Land and Building Society. We were formally established 30 years later as the Leeds and Holbeck (Permanent) Building Society, lending £16,000 in mortgages in our first year alone.
The last century and a half has seen us go through multiple expansions, a name change, a merger and much, much more. Take a look at our history to find out more about where we've come from.
Is Leeds Building Society part of any other bank?
We're not part of any other bank. Our last partnership of any kind came in 2006 when we merged with Mercantile Building Society. We're also not to be confused with the now-defunct Leeds Permanent Building Society (better known as 'The Leeds'), which merged with Halifax Building Society back in 1995.
Would you like to know a little more about us?
That's a brief run-through of some of the basics of building society life that you might be pondering on, but if you'd like to know more about us then please feel free to take a look.
Likewise, if you'd like to find out more about saving, getting a mortgage or other parts of being a member with us, take a look at our Knowledge Base.