Building society "member" gets worse rate than "non-member"

armour

I don't suppose I'll get much sympathy here but I've had a BTL mortgage with a building society since 2008 and when negotiating a new rate I am told that the best they can offer is 1.3% off their standard rate.
New customers however (i.e. Non - members of the building society) can benefit from a 1.8% discount.
This discrimination goes against the spirit of mutuality i.e. that the organisation is 'owned by and run in the best interests of the membership'.
Has anyone else come across this type of discrimination by a building society?

Thrugelmir

If the building society is using the Government's Funding for Lending Scheme. Then yes this is possible. As the money has to be used for new business not existing customers.

armour

Thanks for. Your reply Thrug.
I thought that funding for lending was only for the banks.
I'm with the Principality BS. Do you know if they are getting funding for lending?

opinions4u

I'm not convinced the idea of mutuality in the building society movement was ever intended to support commercial lending to landlords.

armour

I agree with you Opinions but they have decided to get into the BTL market, most probably because they recognise it as very profitable.
As a mutual They have a duty to return that profit to members.
Either they're a mutual or they are not.
I've registered a complaint with them.

leveller2911

armour wrote: »

As a mutual They have a duty to return that profit to members.


Either they're a mutual or they are not.


.

Nationwides BS profits rose by around 50%.Their profit was from the increase in margins between savers and borrowers.

So in effect their profits come from their members.......I don't see any members benefits coming anytime soon.

You couldn't make it up

Imma_Number

In Nationwide's case they have to meet the PRA leverage target of 3% which means they have to raise £2bn by the end of 2015. One of the ways that part of the £2bn can be found is from the profits.

It's can't be done by increasing net lending because then they'd have to find even more to meet the new leverage target and customer savings are liabilities to a bank/building society, not assets.

The BS's are supposed to be run for the benefit of all the members as a group which may conflict with what benefits a member as an individual.

leveller2911

Imma_Number wrote: »

The BS's are supposed to be run for the benefit of all the members as a group
which may conflict with what benefits a member as an individual.

Mortgage holders have benefited but savers have been made to bend over and "take one for the team"......;)

Hopefully they will/have altered their T&C for their mortgages and stop making stupid promises to mortgage holders such as promising not to increase mortgage rates more than 2% above base rates at the expense of the savings rates .

I wonder what percentage of members are savers.

ethank

The Leeds did this to me. Unfortunately a lot of lenders bank on the fact that some people will not move for such a little amount.

maninthestreet

The financial industry does not reward customer loyalty.