Young, gifted and green: meet the society that recycles your savings

Building societies may seem like an endangered species but the Ecology seems less likely than most to fall prey to the windfall hunters.

Indeed, when the subject of demutualisation was discussed at the annual meeting in April, all the members present said they wanted its mutual status retained, says director Paul Ellis.

True to its name, the Ecology sets out not simply to lend but to "recycle money". It uses investors' deposits to lend only to projects likely to save non-renewable resources, promote individual self-sufficiency, regenerate communities or lead to the most ecologically efficient use of the land.

This has also meant lending on properties that other organisations have refused to touch.

Elaine Owen began saving with the Ecology in 1992 because "the ethical principles fit with my world view and I didn't want to be just another statistic in some huge institution".

In 1994 she and her husband decided to buy a remote and dilapidated 18th century farmhouse in North Yorkshire. "When last used the house was a handloom weavers' workshop and a cowbyre, so no other lender looked on us as even vaguely sensible," says Ms Owen. But with an Ecology mortgage and plenty of recycled timber and stone, the Owens have now restored the house, rebuilt the roof exactly as it would have been and set up an organic small holding.

Another example is provided by Wilf Burton who set out in 1994 to build a house in Somerset using passive solar design - a use of materials that enhances insulation - and "green oak" principles - a type of construction which uses no nails.

After buying two building plots with the support of his local Lloyds Bank manager, Mr Burton was refused a mortgage when a "routine" bank evaluation report sharply downgraded the project. "The Birmingham & Midshires also turned us down, despite my credentials as an architect," says Mr Burton.

After three or four staged payments and for a total cost of around pounds 90,000, the Burtons have completed a house that is now valued at about pounds 140,000.

The Ecology is one of Britain's smallest building societies, with 4,500 savers, fewer than 500 borrowers and only one branch - in Keighley, West Yorkshire. But its business is also the fastest growing of any society.

When it was established in 1981, making it the most recently formed society, the Ecology offered products with uncompetitive rates. Now the position is more mixed, underlining that worthy principles do not have to preclude savers and borrowers from getting a reasonable deal.

Borrowers, it is true, do not benefit from the big discounts available elsewhere; instead they are offered a "no gimmicks" mortgage at a standard variable rate of 7.15 per cent over 25 years. The society also demands a 20 per cent deposit "to encourage prudence and protect our members". However, this mortgage rate compares well with most other lenders' standard rates (typically 7.24 per cent) and will be available on some properties that rivals won't touch. In addition, after three years living in a property, borrowers can qualify for a 0.25 per cent discount over the remaining life of the loan.

The society's first-generation Ecology Green Tax-Exempt Special Savings Account proved one of the best-performing from any society or bank. Its current Tessa, however, offers a less alluring 5.85 per cent.

The Ecology's standard savings account, ECO Instant, currently pays 4.0 per cent gross on deposits over pounds 10,000, dropping to 3.75 per cent at pounds 5,000, 3.5 per cent at pounds 500 and 1.0 per cent thereafter. While these rates may not sound particularly attractive, 3.5 per cent on a few thousand pounds is not uncompetitive. There are no chequebooks, but deposits can be made free of charge through Yorkshire Bank or Royal Bank of Scotland.

As a matter of principle, the Ecology claims it will not look to widen its profit margins by reducing its savings rates before its borrowing rates - a criticism that is levelled at many societies.

The Ecology has not been immune from bonus-hunters, however. "We've seen a strong inflow of funds in recent weeks," says Mr Ellis, "but speculators are easily identified because they send pounds 100 to us when joining only requires pounds 10. We don't expect to hang on to them long because we are too young to have a capital base capable of generating huge windfalls." But even as it gets older and richer, the suspicion is that it will not sell out.

New House Hall is a grade 2* listed Elizabethan manor house in a poorly regarded part of Huddersfield "red lined" as a bad risk by major lenders. It is one of only a few thousand UK buildings with grade 2* status.

Darrolyn and Christoph Von Mickwitz (above) had been tenants for 21 years until 1994 when they bought the freehold from the local council, after it became clear they would have to buy if they wanted to preserve the house.

"We wanted to see one of the few historic buildings in the area renovated, but the only grants available were for owner occupiers," says Darrolyn.

"Eventually, the council asked a fair price and offered to guarantee a mortgage so we could exercise our right to buy at the 50 per cent discount. Despite this, and even though we wanted to borrow less than 80 per cent of the property's value, getting a mortgage proved virtually impossible."

Eventually, in search of insurance for high-risk properties, Darrolyn went to the Ecology building society.

"I mentioned the trouble we were having getting a mortgage and within a couple of hours the Ecology had rung back to tell us it could give us what we needed." Photograph: GUZELIAN

Voices
The Sumatran tiger, endemic to the Indonesian island of Sumatra, is an endangered species
voicesJonathon Porritt: The wild tiger population is thought to have dropped by 97 per cent since 1900
Arts and Entertainment
Beast would strip to his underpants and take to the stage with a slogan scrawled on his bare chest whilst fans shouted “you fat bastard” at him
musicIndie music promoter was was a feature at Carter gigs
News
news
Arts and Entertainment
Story line: Susanoo slays the Yamata no Orochi serpent in the Japanese version of a myth dating back 40,000 years
arts + entsApplying the theory of evolution to the world's many mythologies
PROMOTED VIDEO
News
Performers dressed as Tunnocks chocolate teacakes, a renowned Scottish confectionary, perform during the opening ceremony of the 2014 Commonwealth Games at Celtic Park in Glasgow on July 23, 2014.
news
Life and Style
Popular plonk: Lambrusco is selling strong
Food + drinkNaff Seventies corner-shop staple is this year's Aperol Spritz
News
Gardai wait for the naked man, who had gone for a skinny dip in Belfast Lough
newsTwo skinny dippers threatened with inclusion on sex offenders’ register as naturists criminalised
News
Shake down: Michelle and Barack Obama bump knuckles before an election night rally in Minnesota in 2008, the 'Washington Post' called it 'the fist bump heard round the world'
newsThe pound, a.k.a. the dap, greatly improves hygiene
Arts and Entertainment
La Roux
music
Arts and Entertainment
Graham Fellows as John Shuttleworth
comedySean O'Grady joins Graham Fellows down his local Spar
News
people
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
Ross Burden pictured in 2002
people
News
Elisabeth Murdoch: The 44-year-old said she felt a responsibility to 'stand up and be counted’'
media... says Rupert Murdoch
Arts and Entertainment
tv
Extras
indybest
Sport
Arsenal signing Calum Chambers
sportGunners complete £16m transfer of Southampton youngster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Data Governance Manager (Solvency II) – Contract – Up to £450 daily rate, 6 month (may go Permanent)

£350 - £450 Per Day: Clearwater People Solutions Ltd: We are currently looking...

Java Developer - Banking - London - Up to £560/day

£500 - £560 per day: Orgtel: Java Developer FX - Banking - London - Up to £560...

HR Business Analyst, Bristol, £350-400pd

£350 - £400 per day + competitive: Orgtel: My client, a leading bank, is curre...

Account Manager - (Product & Account Management, Marketing)

£26000 - £30000 per annum + Benefits: Ashdown Group: Account Manager - (Produc...

Day In a Page

The children were playing in the street with toy guns. The air strikes were tragically real

The air strikes were tragically real

The children were playing in the street with toy guns
Boozy, ignorant, intolerant, but very polite – The British, as others see us

Britain as others see us

Boozy, ignorant, intolerant, but very polite
Countries that don’t survey their tigers risk losing them altogether

Countries that don’t survey their tigers risk losing them

Jonathon Porritt sounds the alarm
How did our legends really begin?

How did our legends really begin?

Applying the theory of evolution to the world's many mythologies
Watch out: Lambrusco is back on the menu

Lambrusco is back on the menu

Naff Seventies corner-shop staple is this year's Aperol Spritz
A new Russian revolution: Cracks start to appear in Putin’s Kremlin power bloc

A new Russian revolution

Cracks start to appear in Putin’s Kremlin power bloc
Eugene de Kock: Apartheid’s sadistic killer that his country cannot forgive

Apartheid’s sadistic killer that his country cannot forgive

The debate rages in South Africa over whether Eugene de Kock should ever be released from jail
Standing my ground: If sitting is bad for your health, what happens when you stay on your feet for a whole month?

Standing my ground

If sitting is bad for your health, what happens when you stay on your feet for a whole month?
Commonwealth Games 2014: Dai Greene prays for chance to rebuild after injury agony

Greene prays for chance to rebuild after injury agony

Welsh hurdler was World, European and Commonwealth champion, but then the injuries crept in
Israel-Gaza conflict: Secret report helps Israelis to hide facts

Patrick Cockburn: Secret report helps Israel to hide facts

The slickness of Israel's spokesmen is rooted in directions set down by pollster Frank Luntz
The man who dared to go on holiday

The man who dared to go on holiday

New York's mayor has taken a vacation - in a nation that has still to enforce paid leave, it caused quite a stir, reports Rupert Cornwell
Best comedians: How the professionals go about their funny business, from Sarah Millican to Marcus Brigstocke

Best comedians: How the professionals go about their funny business

For all those wanting to know how stand-ups keep standing, here are some of the best moments
The Guest List 2014: Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks

The Guest List 2014

Forget the Man Booker longlist, Literary Editor Katy Guest offers her alternative picks
Jokes on Hollywood: 'With comedy film audiences shrinking, it’s time to move on'

Jokes on Hollywood

With comedy film audiences shrinking, it’s time to move on