Almost one in five new mortgages written in 2007 was either dubbed "subprime" by the bank that loaned the funds or was made to a homebuyer who offered no proof of income, according to an industry trade association.

The Intermediary Mortgages Lenders Association - mortgage brokers that sell almost all the subprime and self-certified loans in the UK - said the first category accounted for 8 per cent of loans and the latter a further 10 per cent.