The Building Society Promise: Building Societies and Home Ownership, c.1880-1913

Formed in the mid-nineteenth century, the building soceities grew rapidly from their humble beginnings as localised 'self-help' organisations to become the dominant player in the house mortgage market by the inter-war period. Throughout the nineteenth and early twentieth centuries, the movement presented itself as a true champion of home ownership and thrift among the working classes, but historians of housing have generally downplayed the role that building societies played, or could have played, in furthering these aims. This paper examines the archival records of two London-based building societies to investigate empirically the extent to which these institutions helped to overcome financial exclusion and to foster home ownership before the First World War, a time when rental tenure was the norm. The results show that the case studies examined were not exclusively middle-class in their membership, with one of them in particular showing a genuine commitment to working-class owner-occupation by providing loans to both skilled and unskilled workers on easy repayment terms. Its success in doing so was based on its innovative agency network which it used to control the adverse selection and moral hazard problems involved in lending to lower-income groups.