Building the Northern Rock: 1965-1994

Aris wrote a commissioned history of Northern Rock Building Society covering 1965 to 1994. The reference has not verified the book's contents.

What the subject establishes is the institution as it then was. Northern Rock was formed in 1965 from the merger of the Northern Counties Permanent Building Society and the Rock Building Society, both based in the north east of England. As a building society it was a mutual organisation owned by its members, taking retail deposits from savers and lending them to house buyers, which is a simple and historically stable model constrained by the deposits it could attract locally.

The period covered includes the building society sector's growth in the postwar decades, the 1986 Building Societies Act which permitted societies to widen their activities and eventually to convert to bank status, and the wave of conversions and mergers that followed.

The reason the book matters now is what happened afterward, which is entirely outside it. Northern Rock demutualised in 1997, became a listed bank, and pursued rapid mortgage lending growth funded increasingly by securitisation and wholesale markets rather than by retail deposits. When wholesale funding closed in August 2007 the bank could not refinance, requested emergency support from the Bank of England, and experienced the first run on a British bank in over a century. It was nationalised in February 2008.

A 1994 commissioned history therefore describes the institution before the funding model that destroyed it was adopted. Readers wanting the failure should consult accounts of the 2007 crisis.