Building societies enjoyed great success last year
February 15, 2008
A recent report has shown the level of success that many of the UK’s building societies enjoyed last year, with many consumers ploughing billions of extra pounds into these societies.
This is partly as a result of the Northern Rock crisis, which saw over £2 billion being withdrawn in the space of a few days by worried savers that thought the bank was on the verge of collapse after it was discovered that the Rock had taken an emergency loan from the Bank of England. Northern Rock became the victim of the first run on a British bank in 150 years as a result of the incident.
The previous record relating to the amount of money that had been placed into building societies in the UK was from 1988, and this figure came in at £13.6 billion. However, 2007 saw this record beaten by a significant amount, with over £16 billion being placed in to building societies. The last few months of the year saw a higher level of activity in this respect, further suggesting that the Northern Rock crisis was partly responsible for the boom that building societies enjoyed.
According to recent research an increasing number of savers in the UK are becoming distrustful of shareholder owned banks following the Northern Rock situation, and many are turning to member owned building societies. In a recent poll of the most trusted banks and building societies a building society, Nationwide, took top spot, beating all of the major banks to the number one position. Despite problems with inter-bank lending over recent months building societies managed to raise around £19 billion on the wholesale money markets last year, compared to £13.5 billion the previous year.
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