People who have taken out fixed rate sub-prime mortgages in the last few years could find themselves financially stretched in the coming months, it has been suggested.

Julia Harris, an analyst at financial comparison website Moneyfacts.co.uk, said there has been a 63 per cent drop in the number of sub-prime mortgages on the market since July, with sub-prime buy-to-let deals dropping by 89 per cent in the same period.

She added that the rates being offered have also increased and lending criteria has been "significantly tightened" and warned of possible problems in the future.

"If the market fails to recover in the longer term, borrowers coming off a sub-prime fixed term deal in the next year or two could be placed in a difficult position, especially if their financial position has not improved sufficiently to allow them back into the prime market," she said.

Last month, Kensington Mortgages withdrew all their sub-prime products after recent turmoil on world financial markets made banks less willing to lend to each other.