At a Westminster reception this evening, the trade body will unveil its Building Society Sector Growth Plan, which highlights the key role mutuals play in the financial services sector and suggests reforms to “unlock the full potential”.
The reforms include better access to mutual capital, so the Treasury and regulators should work with the sector to “develop deeper and more liquid capital markets for mutuals and cooperatives”.
“Unlocking access to genuinely mutual pools of growth capital will open the door to support more people across the country to achieve the security of homeownership and financial resilience,” the BSA said.
The trade body also called on the Financial Conduct Authority to remove barriers to retail holdings of mutual capital, such as Core Capital Deferred Shares (CCDS).
The Prudential Regulatory Authority should also examine how capital regulation is applied to customer-owned businesses.
“Building societies’ are required to focus on relatively lower-risk lending, and they are not incentivised to maximise short term profits. This mutual difference should be recognised in the application of regulatory requirements which are proportionate to the risks posed by mutuals to the regulators’ objectives.
“The current one-size-fits-all application of international capital, liquidity and leverage standards discriminates against building societies relative to the shareholder-owned banks,” it noted.
The BSA said that the PRA “should review and tailor aspects of the Basel framework’s requirements to be more proportionate to the risks building societies pose, creating a genuinely level playing field”.
The trade body added that building society law should be “modernised” so it removes barriers to the sector adapting to future changes in technology and consumer behaviour.
The BSA says that it should have a voice at the policy table, nationally and locally, as it can bring insights to “critical issues” like housing development , energy efficiency, financial education and sustainability of high streets.
“With improved access to mutual capital and the enabling environment outlined in this plan, a larger building society sector will innovate and diversify, helping more people to build their financial strength and to move and buy their homes, while playing a transformative role in local economies for decades to come,” it said.
The report continued that building societies contributed to £7.2bn to the UK economy annually, with 27 million members served across the UK.
From a mortgage perspective, building societies’ mortgage lending contributed £7.5bn to GDP and £14bn, including wider effects.
They make up 29% of all outstanding mortgages across the UK, and have a 37% share of first-time buyer lending.
Building societies have grown their mortgage market share from 18% in 2010 to around 29% in Q1 of 2025.
Robin Fieth, chief executive of the BSA, said: “We are not asking for special treatment. We are asking for recognition of the vital role building societies and other financial mutuals play in delivering inclusive growth, financial resilience, and long-term value for communities across the whole of the UK. We are asking for a seat at the policy table.
“In 1775, our founders were the disruptors and innovators of their time. Today, that remains the case. Our growth plan urges the government to stand by its manifesto pledge to double the mutual and co-operative economy in the UK and put building societies at the heart of a fairer, more resilient economy for everyone.”
