Improving processes in response to challenging market – Tuscan Capital

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 the finance many clients were seeking – we felt that the speed of process, and improving this, would be absolutely key for us as a lender.

It seems slightly obvious to talk about a fast process within, for example, the bridging sector – given the 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 to also 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 per cent 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 per cent 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 per cent of all introduced business from this source now, and it means both our loan enquiries and conversion rates have improved.