"The bill will help level the playing field for the UK's building societies"
As the amendment bill on the Building Societies Act 1986 goes through its second reading in the House of Commons today (January 19), the Building Societies Association has expressed support for its legislation, saying it “will enable building societies to have more capacity to lend to UK customers.”
The group pointed out that amending the current law will also provide building societies access to emergency funding from the Bank of England in a time of financial stress, without it impacting their funding limits, helping ensure building societies continue to operate safely and securely while also enabling them to help more people to get on the housing ladder.
The amendment bill, introduced in December by Julie Elliott, aimed to help put building societies on a level playing field with their banking competitors, enabling them to support more lending to first-time buyers and homeowners in the future.
The BS Act 1986 Amendment Bill introduced by @JulieElliottMP has its 2nd reading in the HoCs tomorrow. The Bill will to help to put building societies on a level playing field with banks, enabling them to support more #lending to FTBs and #homeowners https://t.co/A7ufTziiz0 pic.twitter.com/vsBxwjmrvj
— Building Societies Association (@BSABuildingSocs) January 18, 2024
“Building societies were founded to help working people own a home of their own and are an essential part of our communities – expanding homeownership, particularly to first-time buyers,” Elliott stated.
“I’m proud to be taking forward my bill and strongly welcome the cross party support I’ve had so far. This is a real opportunity to help more people get on the housing ladder and realise their ambition of owning their own home.”
According to BSA, building societies play a crucial role in the UK economy, accounting for a quarter of all new mortgage lending in the UK. In the first nine months of 2023, over half, or 55%, of all building society lending for property purchases was to first time buyers, supporting over 70,300 households to buy their first home.
“This second reading is an important step for a bill that will help level the playing field for the UK’s building societies and give them the capacity to lend more into the economy,” Robin Fieth (pictured), chief executive at the Building Societies Association, said. “It’s high time the 1986 Act was updated to reflect the needs of today’s economy.
“If successful, the bill will drive greater competition in the mortgage market, which will give mortgage customers more choice, and support a healthy marketplace.”
After a second reading, the bill will then pass through the committee stage and report stage, before a third reading in the Commons on April 19.
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