The United Kingdom’s 2024 in Structured Finance So Far: Defending its Leading Position Across Asset Classes

Although the UK often has an active securitisation market, it seems to have tempered somewhat this year. So far it’s registered GBP 12.5 billion in new issuance, down from GBP 19.2 billion at around the same time last year. In terms of the number of transactions and investor-placed issuance, the UK has been the busiest European market, though it falls short in total issuance volume where it is second only to Ireland, whose volume is boosted by a large retained transaction. As in prior years, the majority of UK securitisations come from RMBS but also feature investor-placed ABS and CMBS. We have a stable outlook on UK prime RMBS collateral performance in 2024 but a negative outlook for all other UK RMBS types. We expect the weighted-average cost of a mortgage to increase as some borrowers roll off their low fixed rates and into new mortgages with higher rates. Financial markets expect the Bank of England to start cutting rates later in 2024, though that remains to be seen with inflation still above its 2% target.