The Competitive Environment

The decade of the 1980s has been one of profound change in the building society industry. In particular the competitive environment has intensified dramatically on both sides of the balance sheet. In the retail deposit market, the building societies traditional funding base, societies have faced strong competition from National Savings in the early 1980s from banks and from equity investments in the form of successive privatisation issues and competition from unit trusts. In the mortgage market, building societies have been subject to an unprecedented level of competition since 1981 when the banks, freed from lending constraints, began to enter the mortgage market in a significant way.