Richard Pike, sales and marketing director at Phoebus Software, commented: “If you look back historically to mass unemployed and rising arrears, this will undoubtedly lead you to think that we only have recession and hard times to look forward to.

“But in times of rising arrears volumes, this can also provide opportunities for those looking at trading books, and generally speaking, those books with higher levels of non-performing loans will be available at reduced prices and this will encourage higher numbers of portfolio trades.

“Following the early days of the last global crisis, we saw a lot of this type of activity, and those with high levels of automation in their collections and special servicing activities were able to work out this debt very effectively and then, in some cases, trade the portfolio again at a profit in the following years. But let’s not forget the value of the originations market in uncertain times.

“The originations market has been a good barometer of risk appetite since March, but next year I believe the industry will innovate and continue to fund mortgage completions for those that can prove sustainable income levels. We could well see more players entering the “near prime” lending market, as the market reacts to the effect of borrowers who have been furloughed and that have taken payment holidays.”