The low interest rate environment that has prevailed since 2009 has been challenging to all financial institutions.
However, independent bodies that monitor interest rates across the market have recenlty highlighted the generally superior rates on offer at building societies compared to other providers.
For example, Moneyfacts noted that "Building societies are winning the mortgage battle" (Jan 2018) Charlotte Nelson of Moneyfacts said: "Building societies are offering borrowers a better deal when it comes to rates. For example, the average five-year fixed rate mortgage from a building society is a whopping 0.41% lower than that of one offered by the main banks"
Charlotte continued, "Building societies clearly want to be seen as supporting first-time buyers, and offering lower rates is just one of the ways they can do this. This group of lenders also tend have a more flexible underwriting process, allowing to them to more flexibly consider the needs of these borrowers."
And Savingschampion.co.uk found that on the savings side (Jul 2018) in the first half of 2018 73% of building society accounts paida higher interest rate than the base rate, compared to only 54% of accounts held with banks.
Tom Adams of Savingschampion commented, "What these figures clearly demonstrate are that, as a group, building societies pay higher rates on average, drop rates by less and are therefore treating savers more fairly than banks."
Separately, using the same approach as the Bank of England does for its average interest rate data, the BSA has found that savers with building societies earned £460 million more interest in the first six months of 2018 than they would have done if they'd earned the average rate across the Bank of England's sample of major savings providers.