THE MIDLANDS PROPERT Y GUIDE MONE YWATCH F INANCE
MONEYWATCH FINANCE THE HISTORY OF MORTGAGES IN THE UK 92
In early times, mortgages were loans which were secured against property, usually land. The first building societies were created in the 19th century but the vast majority of Britons rented privately, often the victims of unscrupulous landlords, - However
KETLEY'S BUILDING SOCIETY Ketley’s Building Society, founded in Birmingham, England, in 1775, was the world's first Building Society.
The society was formed by Richard Ketley, the landlord at the Golden Cross inn at 60 Snow Hill. Taverns and coffeehouses were important meeting places in eighteenth century Birmingham and frequently formed the focal point for clubs and societies.
Ketley's Building Society existed to pool the resources of its members, who would contribute a specified amount into a shared building fund and draw lots to select which of the members would have land purchased and a home constructed. With property in place as security, further finance could be attracted to the society through loans at a reasonable cost.
The only documentary records of the society are three advertisements offering shares in the society that appeared in local newspapers in 1778 and 1779. The third of these advertisements claimed that £80 had been advanced on the society's shares.
A LOOK AT THE PAST OF UK MORTGAGES Although we now take home ownership for granted in the UK, this hasn’t always been the case. One hundred years ago, the idea of owning your own home was an impossible dream for ordinary working people. So what has changed to make this a common aspiration for Britons?
In this chapter, we’ll consider the increasing rates of home ownership and which alterations have driven changes in where people live: from private renting through social/council housing to the increasing number of people with a mortgage. From a
consideration of successive decades in the 20th century, we look at what the situation is nowadays for the housing market as well as what challenges await us in the future.
ORIGINS OF THE MORTGAGE – A DEAD PLEDGE A mortgage was originally a loan but a piece of land (or sometimes property) was offered in security for this debt. It was common for the title to the property to be transferred to the lender until the loan was repaid.
Did you know that the word mortgage actually comes from the French phrase ‘mort gage’, which means ‘dead pledge’?
It was given this name to distinguish it from ‘vif gage’ or a ‘live pledge’.
In 12th century, a live pledge meant that the borrower could use the income from the land to pay off the debt whilst for a dead pledge (mortgage), the borrower had to find alternative forms of income to pay off the money he owed. At this time, live pledges were much more popular since it was felt dead pledges encouraged usury, which was against the teachings of the Church.
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