BSA welcomes changes that help to level the playing field between building societies and banks

The Building Societies Act 1986 (Amendment Bill) successfully passed its legislative stages as part of wash up today.

The Building Societies Act 1986 (Amendment Bill) successfully passed its legislative stages as part of wash up today.

The Building Societies Act 1986 (Amendment Bill) successfully completed Parliamentary stages today (Friday 24 May) to become one of the final Bills to pass this Parliament.

This new Act of Parliament was introduced by Julie Elliott MP (Lab, Sunderland Central) to help to put building societies on a level playing field with their banking competitors, enabling them to support more lending to first-time buyers and homeowners in the future. 

Building societies play a crucial role in the UK economy, accounting for a quarter of all new mortgage lending in the UK. They direct a greater proportion of lending to first-time buyers than banks. In the first nine months of 2023, over half (55%) of all building society lending for property purchases was to first time buyers - supporting over 70,300 households to buy their first home.

Modernising the current legislation is long overdue. Under the existing Act, member owned building societies are required to raise at least 50% of their funding from members’ savings deposits. This ‘funding limit’ is an important feature of the building society model, as it preserves their mutual status. However, other types of funding, taken from the financial markets or from the Bank of England, also count toward the funding limit, and constrains building societies from competing more effectively with the UK banks.

Amending the current Act will enable building societies to have more capacity to lend to UK customers, and to access emergency funding from the Bank of England in a time of financial stress, without it impacting their funding limits. This will help to ensure building societies continue to operate safely and securely while also enabling them to help more people to get on the housing ladder. 

Robin Fieth, BSA Chief Executive, said: 

“The fact that this Bill has been able to successfully complete the necessary Parliamentary stages as part of wash up is testament to the strong cross-party support for building societies and the important role they play in our communities.  Our thanks to Julie Elliott MP, who introduced this Bill, to Lord Kennedy of Southwark who took it through the Lords and to Economic Secretary to the Treasury Bim Afolami MP and his team at HM Treasury for all their support in ensuring it made it to the statute book.”

“The new Act will help level the playing field for the UK’s building societies and give them the capacity to lend more into the economy. It’s high time the 1986 Act was updated to reflect the needs of today’s economy. The changes brought in by this new Act will drive greater competition in the mortgage market, which will give mortgage customers more choice, and support a healthy marketplace.”




Debbie Enever, Head of External Affairs - 020 7520 5926
Kate Creagh, Head of Public Affairs - 020 7520 5905


  1. The BSA represents all 42 building societies, as well as 7 of the larger credit unions. Building societies serve around 26 million consumers across the UK and have total assets of over £515 billion. Together with their subsidiaries, they have helped over 3.6 million families and individuals to buy a home with mortgages totalling over £385 billion, representing 24% of total mortgage balances outstanding in the UK. They are also helping over 23 million people build their financial resilience, holding over £385 billion of retail savings, accounting for 19% of all cash savings in the UK.  Within this, societies account for 40% of all cash ISA balances.

  2. With all of their headquarters outside London, building societies employ around 51,500 full and part-time staff.  In addition to digital services, they operate through approximately 1,300 branches, holding a rising share of financial services branches in local communities