The housing market is in much better shape than it was before it crashed in the early 1990s, Alistair Darling said on Wednesday, insisting that similarities with the troubled US market had been exaggerated.

Most house price measures have fallen over the past three months and mortgage approvals have plummeted since the summer, but the chancellor told an audience of manufacturers that “market conditions today are very different to those we saw in the early 1990s”.