Less than one-in-five mortgages last year sub-prime

Published: January 14, 2008

Less than a fifth of new mortgages approved last year were either labelled 'sub-prime' by their lender or given to a homeowner with no proof of income, according to new figures.

The research, published by the Intermediary Mortgage Lenders Association (IMLA), revealed that eight per cent of mortgage loans issued last year were categorised as sub-prime, while a further ten per cent were self-certified, the Financial Times reported.

Further figures provided by the organisation indicated that, at 2005 levels, this would have accounted for £20 billion and £30 billion worth of loans respectively.

While the IMLA issued the figures to prove that a repeat of the US sub-prime crisis was unlikely, the organisation's executive director, Peter Williams, admitted that a recession was uncharted territory for non-traditional mortgages.

"We didn't really have a mortgage market for the credit-damaged in the 1980s," he told the newspaper.

Self-certification mortgages are traditionally popular among the self-employed, a group who make up 3.8 million of the UK's population.