Diverging Performance Trends in UK RMBS

The UK mortgage market has remained broadly resilient through a challenging period, although borrower experiences have varied significantly. Prime borrowers, nonprime borrowers, and buy-to-let (BTL) landlords have responded differently to higher borrowing costs, refinancing pressures, and evolving regulatory requirements, with those differences becoming increasingly evident in RMBS performance.In this episode, we explore developments across the UK housing and mortgage markets and examine what recent performance trends reveal about prime, nonprime, and BTL RMBS. We discuss why legacy pools are performing differently from more recently originated ones and consider how regulatory developments and the interest rate outlook may shape the market in the period ahead.Related Content:“UK Prime and Nonprime RMBS: Diverging Credit Trends Across Mortgage Segments”, https://dbrs.morningstar.com/insights/commentary/489847“UK BTL: Improving Fundamentals Support RMBS Performance”, https://dbrs.morningstar.com/insights/commentary/489670 By downloading or listening to this podcast, you are agreeing to the Morningstar DBRS disclaimer and legal terms and conditions found at dbrs.morningstar.com/about/disclaimer and dbrs.morningstar.com/about/termsandconditions, including that the information provided is not investment, financial or other advice. Morningstar DBRS will not be liable for losses arising from your use of the information. Please note that the content of this podcast is intended for European audiences only.

In the latest episode of our “Securitisation Insights” podcast, Mudasar Chaudhry, who leads our European Structured Finance Research team, is joined by Rehanna Sameja, Senior Vice President and Sector Lead of European RMBS & Covered Bond Ratings, and Sakeeb Zaman, CEO and founder of StrideUp Homes Limited, to discuss Islamic home finance.Islamic home finance has existed in the UK for more than two decades, providing an alternative pathway to home ownership for customers seeking financing that aligns with Islamic principles. While these products are economically similar to conventional mortgages, they are structured through different contractual frameworks, creating unique considerations for lenders, investors, and credit rating analysts alike. As the market develops and more transactions reach the capital markets, understanding these differences is becoming increasingly important.Our panel discuss the current market landscape, how Islamic home finance differs from conventional mortgages, what happens when these assets are securitised, and whether this niche segment could become a more meaningful part of the European RMBS market in the years ahead.Related Content:“Demystifying Credit: "Islamic Mortgages" and Sharia-Aligned Securitisations” https://dbrs.morningstar.com/insights/commentary/489142 By downloading or listening to this podcast, you are agreeing to the Morningstar DBRS disclaimer and legal terms and conditions found at dbrs.morningstar.com/about/disclaimer and dbrs.morningstar.com/about/termsandconditions, including that the information provided is not investment, financial or other advice. Morningstar DBRS will not be liable for losses arising from your use of the information. Please note that the content of this podcast is intended for European audiences only.

In the latest episode of our “Securitisation Insights” podcast, Mudasar Chaudhry, who leads our European Structured Finance Research team, is joined by Marcos Alvarez, Managing Director, Global Financial Institution Ratings, and Christian Aufsatz, Managing Director, European Structured Finance Ratings, to discuss the potential impact of wildfires on European securitisations, with a particular focus on insurance, residential mortgage-backed securities (RMBS), and the growing importance of physical climate risk. The effects of wildfires can extend beyond the environmental and into structured finance through property damage, insurance claims, disruption to local economies, and pressure on household finances and borrower performance. The topic has become increasingly relevant as Europe experiences more frequent periods of extreme heat and drought. After one of the most severe wildfire years on record in 2025, 2026 has seen several heat waves and significant wildfire activity across the continent. In August, major fires in France and Spain made headlines because of their proximity to large urban areas, including Bordeaux and Madrid.  Related Content: “Beyond the Burned Area: What the 2026 Wildfires Mean for French and Spanish RMBS”, https://dbrs.morningstar.com/research/486319 “Fire at Europe's Urban Edge: Wildfires in Spain and France Test Insurers' Secondary Peril Defences” https://dbrs.morningstar.com/research/486187 "The Summer of 2026: Heatwaves, Wildfires, and Droughts--Weather Extremes Are Stacking Up” https://dbrs.morningstar.com/research/487811 By downloading or listening to this podcast, you are agreeing to the Morningstar DBRS disclaimer and legal terms and conditions found at dbrs.morningstar.com/about/disclaimer and dbrs.morningstar.com/about/termsandconditions, including that the information provided is not investment, financial or other advice. Morningstar DBRS will not be liable for losses arising from your use of the information. Please note that the content of this podcast is intended for European audiences only.

In the latest episode of our “Securitisation Insights” podcast, Mudasar Chaudhry, who leads our European Structured Finance Research team, is joined by Christian Aufsatz, Managing Director of European Structured Finance Ratings, and Steven Fortier, Vice President of Global Physical Climate Risk Data and Analytics, to discuss climate risk exposure in residential mortgage-backed securities (RMBS). This topic sits at the intersection of structured finance, property markets, and climate risk. In European RMBS, investors have traditionally relied on tools like diversification, borrower behaviour, and credit enhancement to assess risk. But as physical climate risk becomes more prominent, we ask how we can actually measure exposure and whether it matters for credit today. With new datasets and analytical approaches, we can now link property-level exposure with regional climate risk in a much more structured way. But this also raises broader questions about what the data tells us, what it misses, and how investors should interpret it. Related Content: “Climate Risk Navigator: Climate and Credit--Short-Term Headwinds, Long-Term Risks”, https://dbrs.morningstar.com/research/457580  “Climate Risk Navigator – European RMBS HEATMap”, https://dbrs.morningstar.com/research/480803 By downloading or listening to this podcast, you are agreeing to the Morningstar DBRS disclaimer and legal terms and conditions found at dbrs.morningstar.com/about/disclaimer and dbrs.morningstar.com/about/termsandconditions, including that the information provided is not investment, financial or other advice. Morningstar DBRS will not be liable for losses arising from your use of the information. Please note that the content of this podcast is intended for European audiences only.

In the latest episode of our “Securitisation Insights” podcast, Mudasar Chaudhry, who leads our European Structured Finance Research team, collated the thoughts from the following Morningstar DBRS analysts featured at this year’s Global ABS conference in Barcelona: Mirco Iacobucci, Associate Managing Director of European Commercial Real Estate Ratings, spoke on the Day One “Beyond the Clouds: Financing Digital Infrastructure” panel Kevin Stephenson, Managing Director and Head of APAC Credit Ratings, spoke on the Day Two “Deals Down Under: Opportunities in Aussie ABS” panel Stephan Rompf, Vice President of European Structured Credit Ratings, Funds, spoke on the Day Two “Big Capital, Small Business: Outlook for SME Lending” panel Mudasar Chaudhry, Senior Vice President and Lead of European Structured Finance Research, moderated the Day Two “The Bear and the Bull: Investors’ Roundtable” panel Related research is available at the following link: https://go-dbrs.morningstar.com/FT-AFME-GlobalABS2026 By downloading or listening to this podcast, you are agreeing to the Morningstar DBRS disclaimer and legal terms and conditions found at dbrs.morningstar.com/about/disclaimer and dbrs.morningstar.com/about/termsandconditions, including that the information provided is not investment, financial or other advice. Morningstar DBRS will not be liable for losses arising from your use of the information. Please note that the content of this podcast is intended for European audiences only.

In the latest episode of our “Securitisation Insights” podcast, Mudasar Chaudhry, who leads our European Structured Finance Research team, was joined by Miklos Halasz, Vice President, European ABS Ratings, Auto, and Andrew Lynch, Vice President, Sector Lead, European Structured Finance Ratings, Surveillance, to discuss the UK securitisation framework and the Financial Conduct Authority’s (FCA) Consultation Paper CP 26/6 (CP 26/6 or the Consultation). CP 26/6, published on 17 February 2026 and closed on 18 May, outlined proposals to simplify and streamline the rules governing UK securitisations. The Consultation was broad in scope, touching on investor due diligence, risk retention, cost savings, the public/private transparency divide, and loan-level reporting templates.  In this episode, our analysts discuss what the proposed changes mean for credit analysis—across residential mortgage-backed securities, auto asset backed-securities, and collateralised loan obligations—and where we see improved transparency, as well as areas where it may be reduced. Related Content:  “UK Auto ABS and FCA CP 26/6: Reporting, Reloaded”, https://dbrs.morningstar.com/research/481271 By downloading or listening to this podcast, you are agreeing to the Morningstar DBRS disclaimer and legal terms and conditions found at dbrs.morningstar.com/about/disclaimer and dbrs.morningstar.com/about/termsandconditions, including that the information provided is not investment, financial or other advice. Morningstar DBRS will not be liable for losses arising from your use of the information. Please note that the content of this podcast is intended for European audiences only.

In the latest episode of our “Securitisation Insights” podcast, Mudasar Chaudhry, who leads our European Structured Finance Research team, was joined by Kevin Stephenson, Managing Director, Head of APAC Credit Ratings, and Ketan Thaker, Managing Director, European Real Estate & NPL Ratings, to discuss Australian and UK residential mortgage guarantee schemes. Our analysts dive into a topic that sits at the intersection of housing policy, property markets, and credit risk. In Australia, the government’s expanded 5% deposit scheme is making it easier for first-time buyers to enter the market, but also raising important questions about affordability, house prices, and the risks embedded in high loan-to-value ratio lending. In the UK, the government is taking a more modest approach to its mortgage guarantee framework with a far less visible impact on the housing market. This episode addresses a key question: how do these differing government policy choices shape housing demand, market dynamics, and ultimately the credit risk to which investors are exposed? Related Content: “Australia's 5% Deposit Scheme: Balancing Affordability, Home Ownership, and Credit Risk”, https://dbrs.morningstar.com/research/478698 By downloading or listening to this podcast, you are agreeing to the Morningstar DBRS disclaimer and legal terms and conditions found at dbrs.morningstar.com/about/disclaimer and dbrs.morningstar.com/about/termsandconditions, including that the information provided is not investment, financial or other advice. Morningstar DBRS will not be liable for losses arising from your use of the information. Please note that the content of this podcast is intended for European audiences only.

In the latest episode of our “Securitisation Insights” podcast, Mudasar Chaudhry, who leads our European Structured Finance Research team, was joined by Guglielmo Panizza, Senior Vice President and Sector Lead of European ABS Ratings, and Xiaoxi Sun, Assistant Vice President of European ABS Ratings, Auto, to discuss Chinese electric vehicles (EVs) through an ABS lens. Our analysts dive into a topic that sits right at the intersection of what people see on the road and what investors see in their portfolios. Chinese car brands, especially EVs, are becoming more visible across Europe. At the same time, we’re hearing about cheaper EVs coming from traditional manufacturers in 2026 and renewed concerns about petrol prices due to conflicts in the Middle East. So, the key question is: does this change the risk behind the car loans and leases packaged into auto ABS? Related Content:  “European Auto ABS: The Strategic Drive of Chinese Automakers Westward”, https://dbrs.morningstar.com/research/468742 By downloading or listening to this podcast, you are agreeing to the Morningstar DBRS disclaimer and legal terms and conditions found at dbrs.morningstar.com/about/disclaimer and dbrs.morningstar.com/about/termsandconditions, including that the information provided is not investment, financial or other advice. Morningstar DBRS will not be liable for losses arising from your use of the information. Please note that the content of this podcast is intended for European audiences only.

In the latest episode of our “Securitisation Insights” podcast, Mudasar Chaudhry, who leads our European Structured Finance Research team, was joined by Andre Soutinho, Assistant Vice President, European RMBS & Covered Bond Ratings, and Nicola De Caro, Senior Vice President, Sector Lead, European Financial Institution Ratings, to discuss Significant Risk Transfer (SRT) transactions--and, in particular, the rapid growth of synthetic securitisations in Europe.   Over the last few years, SRTs have become a core part of how European banks think about capital, risk management, and balance‑sheet efficiency. These deals allow banks to transfer credit risk to investors, often without selling the underlying assets, freeing up capital and supporting new lending.   In this discussion, our analysts unpack how SRT transactions work, why synthetic deals have become so popular, what trends we’re seeing in the market, and how we analyse the key risks in structured finance and financial institutions. We also touch on recent and upcoming regulatory developments, including capital rules, supervisory expectations, and their implications for issuance going forward.   RELATED CONTENT “Synthetic SRTs: A Structured Finance Perspective”, https://dbrs.morningstar.com/research/472913 “The Expanding Role of Synthetic SRTs in European Bank Capital Planning”, https://dbrs.morningstar.com/research/473091     By downloading or listening to this podcast, you are agreeing to the Morningstar DBRS disclaimer and legal terms and conditions found at dbrs.morningstar.com/about/disclaimer and dbrs.morningstar.com/about/termsandconditions, including that the information provided is not investment, financial or other advice. Morningstar DBRS will not be liable for losses arising from your use of the information. Please note that the content of this podcast is intended for European audiences only.

In the latest episode of our “Securitisation Insights” podcast, Mudasar Chaudhry, who leads our European Structured Finance Research team, was joined by Mirco Iacobucci, Associate Managing Director, European Commercial Real Estate Ratings, to discuss data centres.Our analysts discuss how data centres are being financed and how securitisation is becoming a central part of the conversation, especially as investors search for stable, long‑term cash flows and varied sources of funding. They examine how securitising data centre assets actually works, the key differences between the asset-backed securities and commercial mortgage-backed securities approaches, and why the U.S. market is still far ahead of Europe. They also explore whether hyperscalers will remain the only type of data centres backing European securitisations or if we might see broader participation. Finally, they touch on the major risks facing the sector, from regulatory and grid‑capacity pressures to the threat of rapid technological obsolescence, and what all this means for issuance expectations in 2026.Related Content: “European CMBS 2026 Outlook: On the Upswing”, https://dbrs.morningstar.com/research/471388 “Demystifying Credit: Data Centres”, https://dbrs.morningstar.com/research/453420By downloading or listening to this podcast, you are agreeing to the Morningstar DBRS disclaimer and legal terms and conditions found at dbrs.morningstar.com/about/disclaimer and dbrs.morningstar.com/about/termsandconditions, including that the information provided is not investment, financial or other advice. Morningstar DBRS will not be liable for losses arising from your use of the information. Please note that the content of this podcast is intended for European audiences only. By downloading or listening to this podcast, you are agreeing to the Morningstar DBRS disclaimer and legal terms and conditions found at dbrs.morningstar.com/about/disclaimer and dbrs.morningstar.com/about/termsandconditions, including that the information provided is not investment, financial or other advice. Morningstar DBRS will not be liable for losses arising from your use of the information. Please note that the content of this podcast is intended for European audiences only.