Gorden Brown to ban 100% mortgages: Report

LONDON: In a bid to save the battered British banking system, Prime Minister Gorden Brown is likely to ban 100 per cent mortgages and announce a bailout package that is expected to cost the taxpayer as much as 500 billion pound, media report says.

"Gordon Brown wants to ban 100 per cent mortgages as part of a blitz of initiatives designed to save the banking system ,including a new bailout with a potential cost of 500 billion pound," the Sunday Times said.

The Prime Minister would ask the City regulator to prevent lenders from offering loans for the full value of a property. In future, buyers would be forced to find a deposit of at least five per cent, even if the property market was booming, the newspaper added.

The government is presenting the policy as evidence of its determination to end irresponsible lending for good.

Quoting a Downing Street source, the newspaper said: "There is a big question over whether it was responsible for banks to have been offering upwards of 100 per cent. The Prime Minister will be asking the Financial Services Authority to look into whether these loans should be banned."

Opposition politicians, however, decried it as too little, too late. As per Grant Shapps, the shadow housing minister: "This comes well after the horse has bolted."