Jeff Ferzoco / Flickr America's sub-prime mortgage market is beginning to reheat, leading investors to warn of the possibility of a renewed financial crisis.

Demand for sub-prime mortgage bonds, which are not backed by US government-controlled mortgage lenders Freddie Mac and Fannie Mae, has surged since the start of last year, as yields on treasury bonds remain low.

Returns jumped 41pc last year, and have climbed a further 12.7pc this year, according to data from Barclays.

The demand has led to fears that investors could be taking risks so big that they will pave the way for a repeat of the financial collapse.

“Debt-financed consumption supported by inflated asset prices is what led to the financial crisis of 2008. It’s amazing how willing we are to travel down that road again,” Peter Schiff, head of investment firm Euro Pacific Capital, said.

“Most buyers cannot afford today’s prices without the combination of government guarantees and artificially low mortgage rates … When significantly higher interest rates eventually arrive, the fragile market will again be impacted.”

The increase in demand for mortgage bonds has also been driven by an increase in the value of property in America, as borrowing costs fall, and consumer confidence rises. US house prices grew at their fastest rate in seven years in March, jumping 10.9pc year-on-year in America’s 20 largest cities, according to the S&P/Case-Shiller index.

The same heady combination – rising house prices and easy credit – is also fuelling a buying spree, echoing the one that led to the 2008 disaster, some analysts claim.

However, others do not think the scene is set for a repeat of the original sub-prime crisis, when investors piled into bonds based on loans for properties people could not afford.

“The vigilance is in place this time, in terms of not allowing people [to] make the same mistake,” Marcus Clancy, from Trepp, an analysis firm specialising in commercial property loans, said.

Sceptics also point to the fact that home owners appear to be on a surer footing, with the rate of delinquency on certain mortgage bonds falling to its lowest level in five years.

Michael Gaper, a senior economist at Barclays, agreed that the current frenzy for mortgage bonds was very different from the bubble five years ago. Banks have learnt their lessons and are naturally more cautious, he said.

But Mr Clancy conceded that banks could be headed for a repeat of the 2008 financial crisis if the US Federal Reserve began winding down its fiscal stimulus.

Ben Bernanke, the Fed’s chairman, has said the reserve will not slam the breaks on its quantitative easing programme but has also warned that America could start weaning itself off the stimulus in the next few months if economic data appears strong.