U.K. mortgage origination is unlikely to grow more than marginally next year thanks to economic uncertainty and steep borrowing costs faced by originating banks, according to a release by Standard & Poor's. As a result, the agency estimates that the volume of RMBS placed with investors in 2012 could hover around €45 billion ($60 billion), a hair over this year's figure.
Prime will remain the name of the game but other sorts of collateral are coming back to life. Making a big turnaround are buy-to-let assets, which are benefiting from a shift towards renting as lenders demand higher minimum down payments.
S&P also predicts that the gloomy economic picture will damage mortgage quality.
ASR recently reported that players in the sector see U.S. dollar tranches playing an increasingly vital role.