Over the past decade there have been radical changes in the conditions building societies face in their traditional mortgage and savings markets. This article reviews societies' behaviour prior to the 1980s and considers the principal external forces affecting the market in the 1980s, the nature of the regulatory response and the resulting changes in the main components of their balance sheets. A comparison is made of the interest margins earned by banks and building societies. The article goes on to examine changes in the structure of the building society industry. Finally, performance during 1990 is considered.
The development of the building societies sector in the 1980s