About 80,000 homeowners with patchy credit histories face increases in their mortgage payments of hundreds of pounds a month because of the global credit squeeze, according to the bleakest assessment yet of the UK’s subprime market.

In the latest and most comprehensive report on the outlook for the sector, Standard & Poor’s, the ratings agency, estimates that 23 per cent of borrowers on fixed-rate mortgages are due to refinance before the end of 2008 and now face a huge “payment shock”.