“We are now starting to see the real consequences of their decisions: unemployment now rising, economic growth forecast to slow, mortgage lending at a 20 year low, and tax revenues falling,” Ed Balls, 22 January 2010

Just a matter of days after being installed as Labour's Shadow Chancellor Ed Balls launched his first set of criticisms of the coalitions economic policies.

But one particular claim stood out to Full Fact – the suggestion that the mortgage market is in its worst state in two decades.

At first sight the figures do not appear to back up Mr Balls. The most recent gross lending figures from the Council of Mortgage Lenders show that while the number is low, it is the lowest for ten years rather than twenty.

A similar story appears in the most recent data from the British Bankers Association, which suggested gross lending at its lowest level since 1999.

Turning to net lending there is more of a case to be made. According to figures provided by the Bank of England, a negative net mortgage lending figure was recorded in July 2010, the lowest figure since the records began in 1993.



But as the graph shows, the figure had been hovering around this lower level since before the change of Government. Likewise, given that the low point was in July, citing this as the consequences of the Government's decisions might seem a touch unfair.

Conclusion

So far as net lending is concerned, Mr Balls claim checks out for the most part, although the Bank of England figures do not go back far enough to check the full twenty year time span.

Likewise, on this measure the second lowest monthly figure was in July 2009, during Labour's term of office.

There is of course a point about whether net or gross lending figures offer the fullest picture of the lending picture, an issue explained in further detail in our more general analysis of the bank lending debate. However both the net and gross figures show the mortgage lending is at relatively low levels to what it has been in previous years.

Therefore none of these points would lead us to judge that Mr Balls claim was a particularly unreasonable one to make.