UK RMBS: THE LIE OF THE LAND FOR THE SHORT TO MEDIUM TERM

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Key Considerations

  • The remaining mortgage payment holidays have the potential to mask the true level of arrears and defaults as they likely stem from the most vulnerable borrowers.
  • While income and business support measures provided a safety net to employees, it resulted in an increase of the true employment rate. As these measures start to unwind, unemployment rates will likely rise especially in more pro-cyclical and at-risk sectors such as hospitality and retail.
  • The combination of rising unemployment coupled with the removal of mortgage payment holidays could place pressure on UK RMBS transactions as arrears and defaults increase from current levels.

 

Documents

UK RMBS: The Lie of the Land for the Short to Medium Term

2 Aug 2021

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