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.

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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.

Those two markets accounted for ?20bn ($39bn) and ?30bn in loans in 2005, and are presumed to have since risen further in value.

The IMLA disclosed the data as it warned against reading too much gloom into the housing picture, however - a view bolstered by surveys showing the average household owns far more equity in bricks and mortar than debt used to buy it.

Housing lender Halifax estimates that private housing stock is worth ?4,000bn - a rise of 9 per cent in 2007 and a sum 3.4 times the aggregate value of outstanding mortgage debt.

"Housing assets have increased by more than mortgage debt levels in each year since 1995," Halifax said.

Martin Ellis, chief economist at Halifax, said the figures should help to put in perspective the anxiety about potential for a US-style collapse in house prices and a rise in defaults. "The UK balance sheet is very strong and stronger than it was 10 years ago," he said.

Others, though, have begun to question just how immune the economy remains to a bout of US-style house price deflation.

Financial sector analysts at Dresdner Kleinwort, in a report on UK property and banking, said there were sufficient reasons to think that a slowing of the housing market, with a knock-on effect on banking, might lie ahead.

"We think current funding tensions and the untested performance of the buy-to-let segment during periods of stress are key considerations in gauging the potential severity of a housing correction," the report said.

Peter Williams, executive director of the IMLA, agreed that non-traditional mortgage lending in the UK was relatively recent and untested in a recession.

"We didn't really have a mortgage market for the credit-damaged in the 1980s," he said, because people with county court judgments against them or who had declared bankruptcy could not obtain mortgages.

However, in the mid-1990s, sophisticated software helped lenders "slice and dice" the population with poor credit histories, allowing banks to sort out those who, despite a poor history, were likely to make good on their debts.

The number of self-employed people with self-certified loans has leapt since the last property recession, while buy-to-let investing has soared. The likely fate of these borrowers has not been tested in a recession.

Data from the Council of Mortgage Lenders offer a mixed picture of housing affordability. The average mortgage for all house purchasers in November was 3.14 times income, against 2.26 times income in 1990 when housing prices collapsed. For first-time homebuyers, the average mortgage was 3.39 times income - the highest multiple on record and well above multiples in the late 1980s.

At the same time, the maximum sum lenders would extend to buy-to-let investors rose sharply to ?2.5m at the end of 2006, up from ?1.5m the year before.

However, because interest rates are now much lower, higher loan-to-income ratios do not necessarily mean mortgages are less affordable. CML data show that monthly interest charges were 15.6 per cent of income for all buyers at the end of 2006 and 16.8 per cent of income for first-time buyers - down sharply from levels just before the collapse of house prices in the 1990s.

www.ft.com/subprime