In the UK, there now remain just over 40 building societies, collectively with £350 billion of assets, representing a quarter of UK mortgage lending, or about 10% excluding Nationwide, by far the largest player. This share of mortgages is substantial, but has been in steady decline over the past two decades. 

Many industry participants now question the sustainability of building societies in the UK, particularly that of the smaller and mid-sized players. Undoubtedly, they face an intensifying range of threats. There are, however, significant opportunities for profitable growth, but for many organizations this will likely require significant refocus or development in the face of market wide and other changes explained in this paper.

In this Executive Insights, L.E.K. London Partners Peter Ward and Diogo Silva set out the key challenges facing building societies, highlight five possible business models in the sector and provide a road map for strategic review as a foundation for future success.

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