RMBS recovery is in full swing in B2L

In one of my recent columns I mentioned that residential mortgage-backed securities were making something of a comeback and this suspicion has been confirmed by the latest figures from Moody’s.

Bob Young

The ratings agency recently reported that the performance of the buy-to-let RMBS market continued to improve in the three-month period to February.

Over the 12 weeks, the 90-plus-day delinquency trend decreased to 1.55% from 1.70% in November 2011. During the same period, outstanding repossessions were stable at 0.1% and cumulative losses held steady at 0.5%. This means the 29 Moody’s-rated buy-to-let RMBS transactions had an outstanding pool balance of £37.2bn as of February.

Securitisation may not be as common now as at its peak around five years ago, but there are encouraging signs that lenders are slowly regaining the appetite for such activity.

You only have to scan the headlines from the past fortnight to see lenders as varied as Skipton Building Society, Coventry Building Society, Santander, Investec and West Bromwich Building Society all making various issuances.

Some of these transactions were postponed from 2011 showing that, despite the economy technically entering a double-dip recession, lenders still feel optimistic about the outlook for the rest of the year.

The UK securitisation market has long outperformed its US and European counterparts, hopefully this latest purple patch is a sign that RMBS are on the road to recovery.