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‘Balance-sheet lenders will look to securitisation’

DB Mortgages managing director Bill Dudgeon predicts that balance-sheet lenders will turn to securitisation in the coming years to remain competitive.

Former TMB managing director Dudgeon, who quit HBOS last September to join Deutsche Bank, told the Mortgage Business Expo that he expects more lenders to follow his firm’s business model.

BM Solutions says it is considering switching to a securitisation model for some of its business but stresses that it would only constitute a small part of its book.

Many of the new entrants to the market, such as DB and Edeus, are using the securitisation model.

Dudgeon said new players are forcing long-established lenders to rethink their product range due to the influx of new, competitive deals.

He said: “In the UK, some lenders are involved in securitising but in a few years’ time, they will have to do more securitisation and manage the balance sheets more efficiently to compete.

“Lenders have had it easy over the last few years but there are more competitive prices and that will force more lenders to wake up as the new entrants are being more innovative.”

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