The UK buy-to-let market is still going strong, despite the pressures of a deteriorating economic background. In the short term, however, falling rental rates may expose UK RMBS backed by buy-to-let mortgages to a surge in arrears.

Buy-to-let originations are on the rise. A recent report released by the Royal Institute of Chartered Surveyors (RICS) suggests that tenant demand for flats and houses has risen this year, particularly because the rise in property prices forced potential first-time buyers to rent. Demographical patterns indicate that, in the medium term, the demand for private rental properties will not diminish.

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