Building societies: background
A ‘building society’ is a society incorporated, or deemed to be incorporated, under the Building Societies Act 1986. Building societies are regulated by the Financial Services Authority subject to legislation set out in the Building Societies Act 1986 which has subsequently been amended on numerous occasions, and was substantively revised by the Building Societies Act 1997 and by the Financial Services and Markets Act 2000.
Under the Act, societies may lend on the security of land in the UK. This power is extended by statutory instrument to cover land outside the UK. In some tightly controlled circumstances, societies may lend without the security of land, such as by granting overdrafts.
The Act also enables societies to:
- Hold and develop land as a commercial asset.
- Acquire and hold shares in corporate bodies.
- Convert to company status, under very tightly controlled circumstances, which are outlined in CTM49640.