The Full Story
Millions of British families have bought their homes through a building society. The very first one started in a pub in Birmingham.
In 1775 Birmingham was growing fast. Its streets were full of small workshops, many of them metalworking firms, run by skilled people who wanted a stake in property of their own. For most ordinary people, buying a house outright was out of reach.
Richard Ketley kept the Golden Cross inn at 60 Snow Hill. He had an idea. None of the men who drank there could build a house on his own. Together, they could.
Each member paid a regular sum into a shared fund. When there was enough, land was bought and a house was built. The members drew lots to decide who would get it. Then they kept paying, so the next house could go up. The houses themselves stood as security, which let the society borrow more at a fair price and build faster. Societies like this were called terminating societies. Once every member had a home, they closed.
Nobody gave them anything. They built it out of their own savings and each other's trust. Almost nothing on paper survives. The only known records of Ketley's society are three newspaper advertisements from 1778 and 1779, offering shares. The third of them said £80 sterling had already been advanced.
The idea spread fast. By 1825 there were more than 250 building societies across the country. Parliament recognised them in law in 1836. In the 1840s came permanent societies, which kept going after their first members were housed and took savings from people who were not yet buying. By 1910 there were 1,723 societies with 626,000 members.
The model travelled abroad too. Building societies took root in Australia, Ireland, New Zealand and beyond. Today more than 40 independent building societies were still at work in the United Kingdom, each one owned by its members.
The Golden Cross is gone. The idea is not. Every time a building society helps someone onto the ladder, it is doing what a room of Birmingham men did in 1775: pooling what they had so that each of them could have a front door.
Why This Matters
The building society put home ownership within reach of working people by letting them pool their savings and trust each other. Ketley's society in Birmingham is the first one known. Within fifty years there were hundreds across Britain. The model went on to Australia, Ireland and New Zealand. Building societies are still owned by their members today. Every one of them carries an idea first tried at a pub on Snow Hill: nobody can do it alone, but everybody can do it together.
Key Facts
- ✓The first known building society was formed in 1775 by Richard Ketley at the Golden Cross Inn, Birmingham (Building Societies Association)
- ✓Members paid into a shared building fund and drew lots to decide whose home would be built (Wikipedia, Ketley's Building Society)
- ✓The only known records of Ketley's society are three newspaper advertisements from 1778 and 1779 offering shares (Wikipedia, Ketley's Building Society)
- ✓By 1825 there were over 250 building societies in the country. By 1910 there were 1,723 with 626,000 members (Building Societies Association)
- ✓Early terminating societies wound up once all their members were housed. The last one closed in March 1980 (Building Societies Association)
- ⚠The film says half the country owns its home because of this pub and that every mortgage descends from it. Mortgages are far older than 1775. Today building societies are one kind of lender among several. The entry credits Ketley's as the first building society instead.