Building society reforms are set to pave the way for more first-time buyers to secure their own homes, with MPs throwing their support behind the changes.
The Building Societies Act 1986 (Amendment) Bill is on the brink of becoming law after sailing through an unopposed third reading in the House of Commons last Friday. Aiming to bring building societies into the modern era by boosting their lending capabilities, the Government-endorsed Bill has been championed by Labour as a means to help “more working people to become homeowners”.
Following a Government consultation that looked at how to level the playing field between building societies and banks, the proposed amendments are designed to stir up competition in the financial services industry.
Labour MP Julie Elliott, who is championing the Bill, said: “It is important to acknowledge that whilst the housing sector has recovered significantly since the record low mortgage approvals during the Covid pandemic, and has recovered from the acute economic shock caused by the last Conservative administration, mortgage approvals at this current time are still below that which we saw before the pandemic.”
“That is why I think a Bill like this, which gives more choice to the building society sector to operate in the interests of their members, is a good thing.” The Sunderland Central MP touted the sector’s “very strong record” of helping first-time buyers, projecting that every £10billion in lending could back “an additional 20,000 mortgages”.
In solidarity with the Bill, Conservative MP Peter Gibson expressed gratitude to Darlington Building Society from his constituency, as the Commons heard that such reforms could bolster the sector by “cutting red tape” and removing “outdated bureaucratic governance systems not faced by the big banks”.
Speaking on behalf of Labour, shadow Treasury minister Darren Jones extolled: “Building societies and mutuals have a long and proud tradition of supporting working people to access affordable finance. Today, the sector continues to play a crucial role in promoting financial responsibility and resilience among its members.”
He explained that building societies also help families to become homeowners as they funnel a considerable chunk of their lending to first-time buyers. Asserting the potential of this Bill, Jones said: “This Bill could unlock significant additional lending capacity from building societies, supporting more working people to become homeowners.”
Backing the Bill, Treasury minister Gareth Davies voiced the Government’s approval, considering it useful to assure the “future growth and success” of the building society sector. He pointed out: “(It) will help them to grow and compete with retail banks so that they can continue to provide vital diversity to the UK financial services sector.”
He concluded that the Bill will endure further examination in the House of Lords at a subsequent date.
