IMPROVING PROCESSES IN RESPONSE TO CHALLENGING MARKET - COLIN SANDERS - SPECIALIST LENDING SOLUTIONS
25.07.23
If you believe that a week is a long time in politics, then a year is certainly a very long time within the property finance market.
By Colin Sanders, Chief Executive Officer, Tuscan Capital Limited.
Think back to 12 months ago, and right across the piece, we had a very different market place and, I would guess very few of us, could have anticipated the turbulence that was to come, or the catalyst for change that the mini Budget would be just a couple of months later.
It would be something of an understatement to say we have all been working through a challenging environment over the course of the last year - steep interest rate hikes, inflation at double-digits and seemingly still stuck at high levels, and a general economic uncertainty feeding into the housing, mortgage and property finance sectors.
However, with many of these issues simply being beyond our control, it feels perhaps even more important to reflect on the areas we can change, the improvements we can deliver, and the support we can offer to brokers and their clients.
That has certainly been our focus, specifically in the areas we lend into such as bridging, semi-commercial, development exits, and the like, because it was apparent to us there were key areas we could change and develop, that would make the lives of brokers and their clients far easier, even with all this turbulence swirling around which was difficult to navigate.
As a real priority - and due to the nature of finance many clients were seeking - we felt that speed of process, and improving this, would be absolutely key for us as a lender.
It seems slightly obvious to talk about a fast track process within, for example, the bridging sector - given the most common reasons why clients want and need bridging - but what we were hearing from brokers in particular was that, across the industry, turnaround and completion times were moving farther out from what was needed, and this was having a damaging impact.
After all, as mentioned, finance is often required in much scaled-down timescale in the areas in which we lend; opportunities can come up at short notice and require an almost immediate answer, and subsequently, deadlines can be tight.
To that end, we looked at what improvements we could make and introduced our Fast Track process 12 months ago, focusing on a greater use of AVMs and desktop valuations, as well as title insurance and search indemnity policies.
Our aim was to speed up the process at our end but also to put less administrative burden on the broker in terms of the information they had to supply from their clients - hence, we introduced an element where personal guarantees would not be required if the case was below 65 percent loan to value (LTV) because we know that taking independent legal advice costs both money and time.
Three quarters of business cases use AVM or desktop valuation.
Over the last 12 months, we've undoubtedly been able to see the benefits of this new process approach - 75 percent of all new business cases use either an AVM or a desktop valuation; far fewer cases require a personal guarantee; our auction product completion times have dropped to an average of 16 working days, a reduction of eight days; and for our development exit products, we've seen average turnaround times reduce from 54 working days in 2021 to 29 working days under Fast Track.
Overall, those improvements have led to a significant increase in 'first-time brokers' introducing cases to us - 31 percent of all introduced business from this source now, and it means both our loan enquiries and conversion rates have improved.
Read the full article on Specialist Lending Solutions.
For more information or to get in touch with the team, please contact us:
Call Us: 020 7846 9030
Email info@tuscancapital.co.uk
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A range of case studies demonstrating examples of previously completed loans can be found here.