Mortgage Securitisation still viable

HBOS, the group which owns both the Halifax and the Bank of Scotland along with specialist lenders Birmingham Midshires, Intelligent Finance and The Mortgage Business has announced a return to securitisation.

HBOS, which is the biggest UK mortgage lender has announced a securitisation of £500m mortgage backed securities transaction which was arranged through its permanent master trust program after receiving approaches from potential investors.

A spokesman for the lender said: "We have created a placed deal to a small group of investors: 50% banks and 50% insurance companies, both UK and international institutions. The loans in this securitisation are prime UK residential mortgages, all originated by HBOS under its Halifax brand."

He adds: "This is the first public UK RMBS deal completely placed to investors since July 2007 - it reflects the strength of HBOS and our quality as an issuer of RMBS.
"Given our position in UK RMBS, HBOS decided to take the first step to help open up the market - we have obtained a very positive response."

Following on from the announcement by Halifax yesterday of reductions in interest rates charged to existing clients, which itself followed the Abbey’s announcement of rate cuts last week, this is a further indication that conditions for the UK mortgage market may soon start to improve.