The Financial Services Authority is expected to announce a new crackdown to head off irresponsible mortgage lending of the kind that was witnessed pre credit crunch.

The central recommendation is expected to be a requirement for all lenders to undertake detailed affordability checks before lending and make the lenders responsible for showing that the borrows can afford to repay the loan. This recommendation sounds the death knell of the self-certified mortgage which previously enabled borrowers to get their mortgage without providing proof of income.

Self-certified loans were popular with the self employed and accounted for over a third of all new mortgages back in 2007. But defaults on them have run at a far higher level than ordinary home loans so the FSA has decided to call “time” on them.

Other changes being considered by the FSA include extending regulation to second charge lending and the buy-to-let market.