Guide to Mutual Lenders
The past 12 months have generally been successful ones for UK building societies and other mutually-owned banks.
Although the country is still facing tough economic challenges, the mutual sector – owned by members, not shareholders – has weathered the financial storm and is now ‘emerging from the difficulties in better health than the UK banking industry as a whole’.
Over the last year, the difference between plc banks and mutual institutions has become ever more striking with one of the most obvious distinctions being the levels of trust consumers have in their provider. In August 2012, the Building Societies Association (BSA) commissioned a survey which revealed that mutuals outscored banks across 11 aspects of customer service, including value for money, openness and honesty as well as trust. Mutuals in fact scored better on all factors – not altogether surprising for organisations that pride themselves on their individual-based attitude to business, rather than a generic ‘computer says no’ approach.
Providing finance for homeownership also remains at the heart of mutuals’ business. Many have been lending to homeowners for over 150 years, and in the first 11 months of 2012, over 61,000 loans were made to first-time buyers (up from 36,000 in 2011). Higher loan-to-value ratio (i.e low deposit) mortgages were offered by many, while participation in the Government’s Funding for Lending Scheme (FLS) will ensure that even more money is becoming available from mutuals through 2013 for first-time buyers and homemovers looking to get on or move up the property ladder.
The culture which frames the behaviour of mutuals in the way they operate has changed little since the early societies. However, we now have a forward-looking, diverse and economically sound sector looking to help customers realise their housing ambitions.