Building society revisions proposed by a Sunderland MP are anticipated to help more first-time homebuyers get on the property ladder.
First-Time Homebuyers Set to Benefit as Building Societies Act Amendment Bill Advances
The Building Societies Act 1986 (Amendment) Bill is getting closer to becoming law after receiving an unopposed third reading in the Commons on Friday, April 19.
The government-backed Bill intends to modernise societies by increasing lending capacity, with Labour claiming the amendments will help "more working people become homeowners."
The proposed amendments were introduced following a government consultation on how to enable building societies to "compete on a more level playing field with banks" and encourage competition in the financial services sector.
The Labour MP declared: “It is important to acknowledge that whilst the housing sector has recovered significantly since the record low mortgage approvals during the Covid pandemic, and has recovered from the acute economic shock caused by the last Conservative administration, mortgage approvals at this current time are still below that which we saw before the pandemic.
“That is why I think a Bill like this, which gives more choice to the building society sector to operate in the interests of their members, is a good thing.”
Sunderland Central MP Julie Elliott, who also happens to be the Bill's sponsor, stated that the industry has a "very strong record" of assisting first-time buyers, noting that every £10 billion in lending could support "an additional 20,000 mortgages".
Building Society Act Amendment Bill Receives Broad Cross-Party Support
Conservative MP Peter Gibson highlighted Darlington Building Society's support for the Bill in his constituency, with the Commons hearing the reforms would help the sector "survive and thrive" by "cutting red tape" and removing "outdated bureaucratic governance systems not faced by the big banks".
For Labour, shadow Treasury minister Darren Jones stated: “Building societies and mutuals have a long and proud tradition of supporting working people to access affordable finance.
“Today, the sector continues to play a crucial role in promoting financial responsibility and resilience among its members.
“Building societies also enable families to get on the housing ladder; they direct a significant proportion of their lending to first-time buyers.
“This Bill could unlock significant additional lending capacity from building societies, supporting more working people to become homeowners.”
Treasury Minister Gareth Davies expressed the government's support for the Bill, saying it will help to secure the building society sector's "future growth and success".
He said: “(It) will help them to grow and compete with retail banks so that they can continue to provide vital diversity to the UK financial services sector.”
The Bill will be further scrutinised in the House of Lords at a later date.