Two years ago, in those days when it was easy to get practically any loan you wanted, before the credit crunch reared its ugly head, if someone wanted a secured loan with a loan to value of 100 per cent (or even more!) it wasn’t considered to be an unreasonable request and there were several lenders who would be quite happy to offer a secured loan on that basis.

Wind forward to the present day and it would be fair to assume you would be laughed at if you asked the bank for a 100 per cent loan, although once the secured loan market eventually returns, lenders are more likely to ease their criteria and increase loan to value ratios.

However, in an interview in the Observer at the weekend, Gordon Brown suggested that the Government could possibly ban 100 per cent loans in the future in order to protect borrowers against negative equity in their homes.

He said that it was important to get the balance right between providing a service for homeowners and a boost for the housing market and ensuring that future lending is carried out in a responsible manner.

He said “We do want to see the reinvention of the traditional savings and mortgage bank in Britain, for loans to be made on prudent and careful terms, not just to people with large deposits, but to first time buyers and those on middle and modest incomes who wish to buy their home but have not been able to save a huge deposit.”

Mr Brown also said that the Government was doing all it possibly could to encourage and help banks and building societies to start offering secured loans once more on realistic terms and that in future there was a need for better regulation of the banking sector, to help avoid the current situation repeating itself.