Five mortgage brokers are facing enforcement action by the Financial Services Authority after the watchdog on Wednesday issued a damning report on the UK subprime mortgage market.

Scrutiny of the subprime sector, which lends to borrowers with patchy credit histories, has increased amid fears that the industry’s rapid expansion could mean lenders have taken on too much risk too fast. Cases of mortgage arrears by subprime borrowers are running at 20 times those of mainstream mortgage holders.