If you asked most people to picture a 170-year-old financial institution, innovation probably would not be the first word that springs to mind.
More likely, they would imagine plenty of heritage, a few references to when it was founded, and perhaps a presentation that begins with a lengthy history lesson before eventually getting to the point.
As someone who has spent a fair amount of time sitting through lender presentations over the years, I can assure you that brokers are generally far more interested in what a lender can do today than what happened in 1856.
That is perhaps why I find the current discussion around building societies so interesting. At a time when the mortgage market is becoming more complex, many societies are no longer simply positioning themselves as an alternative to the mainstream. Instead, they are becoming some of the most effective specialist lenders in the market.
The timing feels particularly relevant. This year marks Darlington Building Society’s 170th anniversary, while recent discussions across the sector have focused firmly on the future rather than the past.
Speaking at the Building Societies Annual Conference earlier this year, Building Societies Association chief executive, Sarah Harrison, described the mutual model as “not a legacy of the past” but “a very practical, a very modern solution to today’s challenges”.
It is difficult to argue with that assessment. The Building Societies Annual Conference was one of the best attended industry events of the year and there is a growing sense that mutuals are enjoying a genuine resurgence across the mortgage market.
That momentum is increasingly visible beyond the building society sector itself. We are seeing societies recognised alongside, and often outperforming, established specialist lenders in award categories that would traditionally have been dominated by specialist brands.
It was a theme that continued through conversations at the recent Building Society Expo, where much of the discussion centred on how societies are adapting to changing borrower needs through technology, innovation and specialised propositions.
That strikes me as an important distinction because, while heritage remains an important part of what building societies are, it is no longer the most interesting thing about them.
Historically, the market was relatively easy to define. You had the mainstream lenders, who were very good at handling straightforward cases at scale, and then you had specialist lenders, who were experts in dealing with complexity, albeit often at a higher cost. However, I feel that there’s a third group emerging between those two camps.
Across the building society sector, lenders have spent the past few years developing genuine areas of expertise rather than trying to be all things to all people. Whether it is later life lending, foreign currency income, self-employed borrowers, expats, holiday lets or more complex affordability assessments, societies are becoming increasingly comfortable operating in areas that were once viewed as specialist territory.
What makes this development particularly interesting is that many of these cases are no longer exceptional. Brokers are dealing with borrowers whose circumstances sit somewhere between straightforward and highly specialist. They may not require bridging finance, equity release or a niche lending solution, but they do need a lender willing to take a more considered view of their circumstances.
That is where building societies have carved out an important position. They offer a level of flexibility, common sense and individual assessment that many brokers are looking for, while still providing the familiarity, trust and long-term relationships traditionally associated with the mainstream market.
For brokers who are finding that more clients require a specialist perspective, but who do not necessarily operate at the extreme end of specialist finance, mutuals are increasingly becoming a natural home for those cases.
There remains a perception in some quarters that building societies are still reliant on manual processes and paper-heavy administration. While human underwriting remains one of the sector’s greatest strengths, many societies have undergone significant transformation behind the scenes.
I think that distinction is really important, because brokers expect both. They want specialist knowledge when a case demands it, but they also expect speed, consistency and ease of doing business.
The old proposition of simply saying “we manually underwrite” is no longer enough on its own. Today’s market expects lenders to combine personal decision-making with modern systems, and I would argue that many building societies are now doing exactly that.
In many respects, this combination of specialist thinking and modern delivery is becoming one of the defining characteristics of the mutual sector.
Ultimately, I think the biggest misconception about building societies today is that they remain defined by their history. Of course, our heritage is special. Those things have always been important and will remain important.
However, the societies making the greatest impact in today’s market are not succeeding because they are old. They are succeeding because they have adapted.
More than that, they are succeeding because they have identified a growing section of the market that sits between mainstream lending and traditional specialist finance, and they have built propositions that genuinely meet that need.
In many ways, building societies have become one of the mortgage market’s most significant success stories. They combine specialist expertise, competitive pricing, modern technology and human decision-making in a way that is redefining what many brokers expect from a building society in 2026.
