A controversial new lender specialising in self-certified mortgages for UK borrowers has been so inundated with business that it has had to suspend taking any more applications.

The lender, selfcert.co.uk, is deliberately based in Prague so that it can bypass the ban on self-cert mortgages by the City regulator, the Financial Conduct Authority.

The lender will lend up to £500,000 at 85% Loan to Value.

The FCA has warned that if anything should go wrong, then borrowers will have been dealing with a lender not under its remit.

Self-certified mortgages are often referred to as ‘liar loans’, with people fibbing about their earnings.

Self-certified mortgages were, until their ban, popular with those who could not prove, for example, regular income or who had been self-employed only a short while.

The lender said at launch there was unmet demand for self-certified mortgages and seems to have more than proved its point.

It launched a week ago today. Its website crashed on Tuesday, and by the end of the week it announced: “We have ceased taking new applications until further notice, this will be at least three months.

“We are currently working through a severe backlog of people that have registered an interest in these products.

“Although we were expecting to go live on the 18th of January, we were never expecting the demand or avalanche of traffic that we received from the start. We have never advertised this product, we don’t appear in Google.

“We’ve turned down interviews and done everything we can to keep a low profile.

“In all honesty it caught us on the back foot a little.”

It goes on to say that it has received around 4,700 applications, only has funds available for 250-300 mortgages, and can accept no more applications.

The start-up is backed by private equity investors and is based in the Czech Republic.

Self-cert mortgages, where borrowers do not have to prove their income, were hugely popular in the UK in the early 2000s but were banned by the FSA in its Mortgage Market Review after many consumers inflated their earnings.