The Financial Services Authority is expected to introduce new rules in order to tighten the risky lending. The FSA wants the lenders to ensure the clients are more strictly checked so that they are not lent debt they can not repay.

Earlier in February, the Prime Minister Gordon Brown had asked the FSA to think over a veto on zero-deposit mortgages as he called for a return to conventional banking values.

In addition, Lord Turner, the FSA chairman, is of the view that the quick growth of mortgage lending had played a vital role in bringing the recent financial slump.

Speaking on the issue, Gordon Brown said, “I believe lenders should have to carry out proper checks on incomes before agreeing home loans.”

It may be noted here that some borrowers give false statements of their earning to secure a home loan.

The new rules would compel lenders to ask costumers for clear proof of their income.

The concerned move of the FSA may put an end to the cheap mortgages and slow down growth of house price for a generation.