The first new UK building society for thirty years has launched, becoming the latest new entrant to challenge the dominance of the five biggest lenders.
The Family Building Society, based in Epsom and employing 150 people, said it would specialise in loans allowing family members to offer each other financial support.
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"After the financial crisis, people worked out that they needed to work together across the generations, parents helping kids, grandparents helping their grandchildren, and what we’ve done is pull together a range of products focused just on people helping each other inter-generationally – be it with mortgages, savings or insurance," said Mark Bogard, CEO of the Family Building Society.
"We want to specialise in helping families to help each other."
The building society will offer products like a family mortgage, available to people with deposits as low as 5% of a property’s value, that allows parents to part-guarantee their children’s mortgage by offering equity on their own house or a cash deposit.
Parents and grandparents can also use their savings to offset mortgage interest.
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By GlobalDataMr Bogard said that although younger borrowers were more reliant on their parents to help them raise a deposit, many parents were worried about saving enough money for their retirement,
"Parents want to be able to help their kids, but they are very, very wary about giving money away because they don’t know how long they’re going to live and they know that once the money is given away, that money is gone," said Mr Bogard.
"They’re worried about living until they’re 90 and needing the money when they’re older."
The mutual will also offer borrowers loans for life-changing events like divorce or having a first baby.
The Family Building Society is owned by National Counties Building Society, a predominantly online and postal-based lender.
National Counties Building has just one office, in Epsom, but serves 50,000 customers throughout England and Wales.
Originally called the Fourth Post Office Mutual Building Society, the society was incorporated in March 1896 and only served only Post Office staff until 1972.
After beginning to serve the general public, the Society’s name was changed to National Counties Building Society and it now styles itself "the modern mutual", saying it combines "the latest technology with traditional principles of personal service and trust-worthiness."
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