New rules forcing borrowers to prove income in a crackdown on irresponsible lending have prompted warnings that some consumers will be unable to take out a mortgage.
The Financial Services Authority's proposal would effectively ban self-certification and fast-track mortgages and demand affordability checks to ensure repayments. The regulator also wants banks to tighten up on interest-only mortgages.
Mortgage trade bodies said self-employed people may struggle to give independent proof of income. They have hitherto relied on self-certification mortgages.
Paul Broadhead, head of mortgage policy at the Building Societies Association, said: "There is a risk that the FSA's proposals will prevent some credit-worthy customers getting a mortgage and create mortgage prisoners."
But the FSA claimed only people who had recently set up their own business were likely to struggle to meet its income verification requirements.
Research by the regulator found 46% of households either had no money left or faced a shortfall once they had met their mortgage repayments and living costs.