Building societies merging

Earlier this week the Cheshire Building Society announced that they would no longer be dealing with mortgage brokers as the mortgages they offer “have no obvious point of difference” from the mortgage offered by their new owners the Nationwide Building Society.

The Britannia Building Society said that they have opened “exploratory talks” with Co-operative Building Society over a possible merger. If this merger was to go through, the combined organisations would have around six millions customers and £70 billion of assets. Clearly the security of creating super societies is appealing in these uncertain economic times, but mergers of this kind dramatically reduce the amount of choice for consumers.

Pre-credit crunch there was considerable competition between building societies. It is the competition between building societies that leads to better deals.

The Hinckley and Rugby has just launched a 4.39% two-year fixed rate with a low £799 arrangement fee and this is available for loans up to 65% loan-to-value.

The housing market needs more competitive mortgages like this. It is great to see one of the smaller building societies offering a deal that betters one offered by the Halifax.

28th November 2008