Soaring UK house prices needed a party-pooper. The Financial Services Authority’s embarrassment at its failure to impose discipline on UK mortgage lending prior to the financial meltdown is matched by its determination not to repeat the mistake. Mortgages are no trivial matter: the £1,230bn home loan market accounts for 70 per cent of all credit extended by UK lenders. The extreme indebtedness blighting the lives of millions was the result of a frenzy of ill-judged property speculation: while property values rose almost 300 per cent in the decade before the crisis, average earnings grew only 50 per cent.

The FSA now believes it has a role to save consumers from themselves. It has shied away from proposing maximum loan-to-value and loan-to-income ratios. Crude caps could reduce access to credit for some people able to afford high LTVs but lacking deposits. It is proposing a tougher line on certain products, however, which may now be banned. Take “self-certification” mortgages, which accounted for 45 per cent of the £300bn of mortgages advanced in 2006-07. Designed to meet the needs of self-employed borrowers, self-cert found a huge market in homebuyers desperate to borrow more than their (genuine) incomes would allow.