Homeowners can hand back the keys

Homeowners who cannot repay their mortgages could just hand back the keys, US-style, under EU legislation voted for by members of the European Parliament.

The lenders would also have to take steps to get the best possible price for any homes they repossess and sell on the market, to make sure borrowers were not left with huge, outstanding debt.

But the conditions under how this would operate will be set by the government, which will be under a lot of pressure from banks to ensure borrowers do not just walk away from their debts.