BEST ADVICE - Q&A: COLIN SANDERS, CEO OF TUSCAN CAPITAL
14.12.22
Best Advice fires the questions at Colin Sanders, Chief Executive Officer at Tuscan Capital.
BestAdvice (BA): Has your product offering changed since we last touched base four years ago?
Colin Sanders (CS): Wow, that seems a long time ago! Yes, our proposition has altered significantly since then. Over that time we have added new funding lines which allow us to offer a much wider proposition. This now includes commercial mortgages, refurbishment products and mid-term solutions.
In addition, we have re-engineered our process. All added together, we have provided brokers with many more reasons to use us.
BA: You introduced Fast Track in July 2022. Has it met your expectations?
CS: It's no exaggeration to say that Fast Track has been a game changer for Tuscan Capital. Allowing AVMs and desktop valuations to be used, as well not requiring Personal Guarantees on cases at 65% LTV and below, have hugely improved our turnaround times but also brought about some interesting conversations with brokers who until now haven’t seen the need to use Tuscan.
We’re bucking the trend at a time when bridging cases across the board are taking longer to complete. Our average turnaround time is now 41 days, with purchases taking 23 days on average. The fastest deal completed under Fast Track so far took just seven working days.
AVM and desktop valuations have been employed in 35% of all completed cases since July, while loan enquires since Fast Track’s introduction are 26% greater than in the first six months of the year. We’ve also seen a 38% increase in conversion rates from Fast Track.
BA: Is bridging and development finance still concentrated in London and the South East?
CS: In our experience we have seen a pretty even deal distribution across England and Wales since we opened our regional offices in Birmingham and Manchester, staffed by local experts. With this regional expertise we have found that brokers and developers enjoy the local knowledge and familiarity that we can offer.
The deal sizes are unsurprisingly weighted to being larger in the South East but we continue to promote and enjoy nationwide deal distribution. With building and material costs constantly on the rise, developers are finding that more viable margins are to be made outside of London and the South East.
BA: Bridging is all about the 'exit'. Have you noticed any change in exit strategies?
CS: The biggest change in exit strategy has occurred since interest rates began their move upwards earlier this year. Many landlords and some developers have realised that high leverage and higher interest rates can leave them with no option but to sell the asset. In the case of buy-to-let, landlords at a high leverage can find themselves stuck in their current mortgage which has come out of its fixed or discounted rate, only to find their rental income doesn’t pass any stress tests with new deals. In this situation a sale might be the only realistic option.
Meanwhile, some developers have also found themselves having to offload stock, which in a super low interest rate environment might have meant they could have held the asset.
However, in both of these scenarios, where there are reluctant sellers there are opportunistic buyers. It’s those buyers who have cash or can buy at low leverage who will benefit from the current environment.
BA: Do you have any plans to change distribution in 2023? Any other plans for next year?
CS: We have been very pleased with the success of our regional offices in the Midlands and the North, as discussed above, and with our current offering, we have decided that we should widen our distribution by adding more regional offices. Therefore, in the early new year we will be opening a Welsh office and appointing a regional sales manager for the south of England.
BA: Finally, rumour has it that you've written your autobiography...is this true and if so, what did you learn from writing it?
CS: It's true. It might not be an international best seller, but it might be of interest to some industry friends and my family and I enjoyed the process, which I began during one of the many Covid lockdowns. It made me realise how long 40 years in business actually is!
I have tried to keep the chapters brief, as I know from my kids that attention spans seem to be getting shorter by the generation, but the trusted few who have read it have been positive in their comments. What did I learn? You’ll have to read it to find out…
Read the full Q&A on Best Advice.
For more information or to get in touch with the team, please contact us:
Call Us: 020 7846 9030
Email info@tuscancapital.co.uk
View our Regional Offices:
London Office
Birmingham Office
Manchester Office
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A range of case studies demonstrating examples of previously completed loans can be found here.