Stafford has been the proud winner of the What Mortgage: Lender of the Year award four years in a row and has grown by 10 per cent a year for the last five years. Definitely more tortoise than hare, chief executive Mike Heenan puts it all down to a steady, traditional and uncomplicated approach.
“We believe in keeping things simple. We have a simple mortgage product and a simple range of savings products. We don’t aim to confuse or to rip off but try to be very, very fair with everybody. That is the philosophy I inherited when I started with Stafford in 1984 and it is one that has held the whole time I have been involved with the company.”
Unlike the majority of mortgage lenders, Stafford Railway does not assess mortgage applications entirely on credit ratings but also looks at individual circumstances.
“Every mortgage is looked at by me or my deputy. We believe at looking at things in an individual basis and feel there is a role for a personal service. We have not tried to emulate the big boys – our aim is it offer a very straightforward service rather than a confusing plethora of products.”
In fact, Heenan thinks some of the bigger lenders are responsible for misleading consumers. “The current market deliberately confuses. If you have a mortgage, you can have a certain rate for which you pay a certain application fee. So you may pay £1,000 up-front as an application fee and get a rate of 6.7 but you can actually pay £500 and get a rate at 6.9. You need to be a little world-wise to work out which is the best one. All we have is one product with no application fees, no traps of any kind and you can redeem it at any time without penalty.”
Despite being relatively free of outside influences – Stafford does not sell any insurance products or repayment vehicles – it has not escaped the crunch. “We have had to stop business outside the local area because it is such a cracking rate at 5.99.”
However, Heenan’s priority is to continue to lend – within the Stafford postcode – and maintain a stable and secure financial position for the society. “I’ve got to watch liquidity very carefully at the moment and obviously continue to attract savers.”
Pragmatically, Heenan says: “We do monitor the number of mortgages we are accepting but with a few drops in the base rate hopefully things will come back to normal. The injection of money might also start to unfreeze some of the lending. Just as some of the bigger boys have started to pull out, I cannot be in a position where I end up over-lending but I hope in the next two or three months that unfreezing will occur. It is a very challenging time to be running a building society. Whereas I would normally welcome anyone from anywhere in the UK, at the moment it is a bit tight.”
Heenan is certainly of the old guard of financial services. Having trained with PwC to become a charted accountant in 1976, he then worked his way up another chartered accountancy firm to senior partner until he became chief executive of Stafford Railway.
He explains: “I got a prospective partner appointment in a firm called Dean Statham. Believe it or not, that firm and its predecessors have been running Stafford Railway Building Society since 1880. What happens is gradually you move through and when you become a partner of the firm some of the partners become involved in helping to run the building society.
“I have two jobs – I am senior partner at the accountancy firm and also chief executive of the society. While this was quite normal 30 years ago, we are now the only one left in the UK and are unique in that respect.”
This was not Heenan’s first experience of the society. He says: “Funnily enough, I had already got my mortgage from Stafford Railway and my father had used Stafford as well. In that respect I had known the society before I got involved with it. It is a local community-based, very traditional mutual.”
But while he is keen to emphasis its traditional approach, Heenan says the society does not have to do everything the old-fashioned way.
“The key is efficiency. Some years ago, I outsourced my computer system and now piggy-back Newcastle upon Tyne Building Society’s system.”
This approach saves money and means Stafford Railways does not have to spends its own resources keeping up to speed with the latest developments.
“Our management costs are lower than those of most societies and this stems from my belief in simplicity. Simple products don’t have the same compliance issues as complex ones. Our management costs are 0.74 per cent of mean total assets while most societies in my peer group are over 1 per cent.”
An active member of the community, Heenan has been a member of Stafford council on and off for 30 years and is presently the cabinet member for finance. He was even involved in selecting David Cameron to be a Parliamentary candidate. “I have had a lot of fun in politics and I find great satisfaction in trying to do the best for your local community.”
Education: King Edward VI Stafford, Leicester University (Physics)
Career: 1993-present: chief executive, Stafford Railway Building Society; 1984-1993: joint secretary, Stafford Railway Building Society; 1981-present: partner, accountants Dean Statham; 1979-1981: chartered accountant, Dean Statham; 1972-1979: article clerk/trainee and accountant, Price Waterhouse Coopers
Likes: Politics, Spicy food and European travel
Dislikes: Smoking and speed cameras
Drives: Jaguar S-Type
Book: William Pitt the Younger: A Biography by William Hague
Film: Doctor Zhivago
Album: Oscar Peterson
Career ambition: Keep Stafford Railway on a good and level course and keep us growing
Life ambition: To have made a positive difference somewhere to somebody’s life
If I wasn’t doing this I would be…
a criminal barrister