ABSTRACT

Lending institutions, and building societies in particular, have been critical to the growth of owner-occupation in Britain, particularly as many people seek to become owner-occupiers at a comparatively young age. Mortgages advanced by building societies are either of the annuity type or of the endowment type as life assurance policies have become more common. Endowment mortgages consist of a loan, from either a building society or a life assurance company, secured by an endowment life assurance policy. In fact owner-occupation is the prevailing tenure form in most industrial countries. The main providers of mortgage finance for house purchase are building societies, commercial banks, local authorities and insurance companies. Insurance companies provide finance for home purchase through the sale of endowment policies while local authorities are empowered to make loans, in theory at least, to those on low earnings and on property of lower quality which building societies might regard as poor collateral.