As the U.K. RMBS pipeline steadily grows this year, market participants have turned their attention to how these transactions might weather an unfavorable housing market. The verdict, for now, looks positive, said analysts at Morgan Stanley.

Consumer confidence in the U.K. remains strong, regardless of slowing economic growth. The current low interest rates encourage spending and house price inflation, said the analysts. However, it's unlikely that this trend will survive in the long-term. Morgan Stanley reported, "We do not believe this decoupling between the consumer and the rest of the economy is sustainable and are keeping a close eye on unemployment, interest rates and consumer confidence as lead indicators of potential sources of problems for the housing market."

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