The latest half-year figures show building societies punching well above their weight
Building societies used to be treated as the steady, slightly old‑fashioned corner of the market. The latest half‑year numbers suggest something very different: a sector growing faster than its share of the pie and increasingly shaping both mortgage and savings competition.
This is a shift that intermediaries should note: it is changing who is writing business, where borrowers and savers turn first, and how the high street itself looks and feels.
Mutuals outpacing their market share
Figures from the Building Societies Association (BSA) show that building societies and two mutual-owned banks increased their mortgage books by £7.5 billion in the six months to September 2025, taking total balances to £493 billion. Over the same period, cash savings balances climbed by £8.8 billion to £496 billion.
Critically, this is not just growth in absolute terms, but growth ahead of their existing position in the market. Mutuals now hold 29% of the UK’s outstanding mortgage balances but generated 32% of net lending over the period, and they approved more than 220,000 new loans, equating to 31% of all market approvals. That is a clear indication that, in a subdued and highly competitive environment, building societies are taking more than their “fair share” of new business.
On the savings side, the pattern is similar. Building societies and mutual-owned banks attracted 27% of all UK cash savings in the half-year, comfortably above their 23% share of overall savings balances. They now hold 46% of all Cash ISA balances, some £205 billion – double their share of the wider savings market – reflecting persistent consumer demand for simple products and long-term value rather than short‑lived teaser rates.
For brokers, that competitive edge is already visible in sharper pricing at key LTVs, more nuanced risk appetite, and a willingness to stay active in segments where some shareholder-owned banks have pulled back.
First-time buyers and niche borrowers
READ MORE: Rate cuts and wage hikes improve first-time buyer affordability
Nowhere is the mutual proposition more visible than in first-time buyer (FTB) activity. In the six months to September 2025, building societies and the two mutual-owned banks provided 59,861 mortgages to first-time buyers – an important contribution at a time when affordability constraints, high deposit hurdles and tighter criteria continue to lock many aspiring buyers out.
Much of this support is coming through product and policy innovation: higher LTV options, more flexible treatment of complex income, and creative approaches to parental support and joint borrower structures. For advisers, that means mutuals are often the first port of call for clients with decent underlying affordability but who sit uncomfortably within automated, heavily standardised bank scorecards.
Against a backdrop of regulatory scrutiny on responsible lending, building societies’ traditional strengths – manual underwriting, a more holistic approach to risk and a genuine appetite to look at individual cases – are turning into hard commercial advantages.
Value for members, pressure for banks
The numbers also highlight the underlying benefit of the mutual model. According to the BSA, members received around £4 billion in additional value last year compared with what they might have obtained from bank rates and benefits. That value shows up not only in rates, but also in product features, service levels and the absence of pressure to extract ever-higher returns for external shareholders.
Commenting on the latest figures, Robin Fieth, chief executive of the BSA, argues that the sector is increasingly aligned with what consumers say they want from financial services. “Consumers are increasingly looking for providers that offer long-term value, fairness and inclusive access to services in their communities. These latest figures show that building societies continue to meet that demand, supporting people to buy their first home and helping households build their financial resilience,” he says.
For banks, this presents a challenge. In a world where customers are more sensitive to perceived fairness and loyalty, the contrast between mutual and shareholder-owned models is becoming more apparent.
High street presence as a strategic asset
Branch strategy is another line of divergence. As many banks shrink their physical footprint, building societies are moving in the opposite direction. They now account for 35% of all high street branches, up from just 14% in 2012, as they keep existing outlets open and, in some cases, open new ones.
Fieth is explicit about the contrast: “While banks retreat from high streets and cut the local services communities rely on, building societies are doing the opposite – not only are they keeping branches open, but they are investing in them and opening new ones.”
For advisers, particularly in regions where bank presence has thinned dramatically, this matters. Branches doubling as shared space with local charities and community groups are not only helping societies deepen their community roots, they are also reinforcing brand trust – an important factor when advisers recommend lenders for the biggest financial decision most clients ever make.
Alongside physical presence, building societies are investing in financial education and initiatives like UK Savings Week, aiming to improve money confidence and resilience. That long-term approach to engagement dovetails neatly with brokers’ own emphasis on ongoing client relationships rather than one‑off transactions.
Growth potential – and a call to policymakers
The BSA is clear that the sector’s current trajectory is only part of the story. Fieth points to the Building Society Sector Growth Plan as a roadmap for unlocking further capacity through regulatory and capital reforms.
“Last week we launched the Building Society Sector Growth Plan, which called on government and regulators to drive capital reforms that would unlock the full potential of the sector,” he says. “These changes will enable building societies to help even more people to buy their own home, safeguard their savings and strengthen communities across the UK. We’re not asking for special treatment, just recognition of the vital role building societies play in ensuring the UK has a diverse and competitive financial services market and the ability to realise the full potential of the sector.”
For Mortgage Introducer’s readership, the message is twofold. First, mutuals are already reshaping the competitive landscape in mortgages and savings – particularly for first‑time buyers, deposit‑constrained households and clients who value face‑to‑face engagement. Second, if policymakers respond positively to the sector’s Growth Plan, building societies could become an even more central part of the mortgage distribution story in the years ahead.
At a time when trust, value and accessibility are under intense scrutiny, the resurgence of the building society sector is not just a feel‑good story for mutual advocates. It is a live commercial reality for brokers deciding which lenders will best support their clients – and their own businesses – through the next phase of the cycle.
