Well founded: Industry revenue is expected to continue to grow steadily, despite uncertainty

Building societies are cooperative financial institutions owned by their members (i.e. their customers, depositors and borrowers). Like banks, they take deposits and provide banking and financial services. Unlike banks, however, profit is distributed among the members of a building society rather than among external shareholders. In addition, the Building Society Act 1986 stipulates at least 75% of a building society’s assets must be loans secured on residential property, making residential mortgages the industry’s largest product. Revenue is derived from interest receivables, commission and fees. The industry’s four largest players are Nationwide, Yorkshire Building Society, Coventry Building Society and Skipton Building Society...read more.

Industry Statistics & Market Size
Revenue
£13.9bn
Annual Growth 13-18
1.7%
Forecast Growth 18-23
Profit
Employment
42,188
Businesses
44

Industry Threats & Opportunities

  • Industry performance has been steady over the past five years, supported by sustained demand
  • Technology developments have facilitated improved access to consumers
  • Crypto-financing could be a significant and as-yet untapped source of revenue
  • Industry Report - Industry Locations Chapter

    The geographic spread of the Building Societies industry closely follows the distribution of population given the industry’s largest market are the general population seeking funding and loans for housing. Varying levels of household income, house prices and number of businesses across different regions also affect the distribution of industry establishments. The industry initially emerged when groups of consumers formed cooperatives to save and borrow to purchase houses, with the practice spreading throughout the United Kingdom until there was a building society in almost every town. The...purchase to read more.

    Additional Insights for the Building Societies Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Building Societies Industry are

  • Having a good reputation
  • Management of a high quality assets portfolio
  • Having a loyal customer base
  • IBISWorld analysts also discuss how external factors such as Number of residential property transactions and Official bank rate in the Building Societies industry impact industry performance..

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    What's in this report

    What is the Building Societies Industry?

    Building societies are cooperative financial institutions that are owned by their members (i.e. their customers, depositors and borrowers). Like banks, they take deposits and provide banking and financial services, particularly mortgage lending. Unlike banks, however, profit is distributed among its members rather than among external shareholders.

    Industry Products
  • Residential mortgages
  • Commercial loans
  • Consumer retail banking and personal loans
  • Other fees
  • Industry Activities
  • Accepting deposits from members
  • Lending to members
  • Residential financing (mortgages)
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Number of residential property transactions
  • Official bank rate
  • Ratio of household debt to disposable income
  • Consumer confidence index
  • House price index

  • Current Performance
  • Market backdrop
  • Technology and growth
  • Competitive threats
  • Regulatory restraints
  • Current concerns
  • Profit and market structure
  • Chart: Revenue Growth

  • Industry Outlook
  • Revenue constraints
  • Revenue growth
  • Rising deposits
  • Market structure
  • Table: Building Societies Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Building Societies Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Clothing Manufacturing
  • Department Stores
  • Consumers

  • Key Selling Industries
  • Banks
  • Consumers

  • Products & Services
  • Residential mortgages
  • Commercial loans
  • Consumer retail banking and personal loans
  • Other fees
  • Chart: Building Societies Industry Products and Services Segmentation

  • Demand Determinants
  • Interest rates
  • Economic climate and consumer confidence
  • Residential housing market
  • Demand for substitutes

  • Major Markets
  • First-time buyers
  • Other buyers
  • Businesses
  • Personal loans and fees
  • Investor buyers
  • Chart: Major Market Segmentation for the Building Societies Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
    Profit Interest costsWagesLoan write-offs, credit impairment and provisionsRent, utilities, depreciation and other costsRent and utilities are expected to account for 2.3% and 1.2% of revenue respectively. Depreciation costs account for a small share of revenue at an estimated 1.6%. Investment in IT infrastructure and technology, to enhance selling channels and develop online and mobile banking platforms, makes up a large proportion of depreciation costs.
  • Chart: Cost Structure Benchmarking – Sector vs Building Societies

  • Basis of Competition
    Internal competitionExternal competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Building Societies Industry

  • Industry Globalization
    Nationwide Building Society, Yorkshire Building Society, Coventry Building Society,
  • Table: Nationwide Building Society - financial performance
  • Table: Yorkshire Building Society - financial performance
  • Table: Coventry Building Society - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Building Societies Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Building Societies Industry
    Includes:
  • Industry Revenue (2009-2023)
  • Industry Gross Product (2009-2023)
  • Establishments (2009-2023)
  • Businesses (2009-2023)
  • Employment (2009-2023)
  • Wages (2009-2023)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Demutualise
  • When a mutual company owned by members converts to a company owned by shareholders. In effect, members exchange their rights of use for shares.
  • Interest Margin
  • The ratio of net interest (interest paid minus interest received) to interest received.
  • Libor ( London Interbank Offered Rate)
  • The interest rate at which banks offer to lend funds (wholesale money) to one another in the international interbank market.
  • Retail Deposits
  • A sum of money held in a building society on behalf of an individual.
  • What Our Customers Say

    Why buy this report?

    IBISWorld’s Building Societies market research report offers insightful industry analysis and research into the market at the national level. IBISWorld’s in-depth industry market research is presented in a logical and consistent format. The industry report contains key industry statistics, market size, industry trends, and growth and profit forecasts for a 5-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Building Societies:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Building Societies market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Building Societies, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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