Residential mortgage lending fell for the 12th consecutive month in September, providing further evidence of the slowdown in the property market. Central Bank figures showed growth in lending fell from 19.7 per cent in August to 18.8 per cent in September, the slowest rate since January 1997.

The slowdown came despite falling mortgage rates. The average standard variable mortgage rate fell over the course of the month to 5.51 per cent from 5.74 per cent, following an official ECB interest rate reduction. The overall rate of private sector credit growth rose to 16.5 per cent in September from 14.2 per cent in August.

But the Central Bank said the rise was partly due to a base effect, with exceptional factors reducing credit growth in September 2000. These included a drop of €1 billion (£0.79 million) in one institution's lending due to the partial sale of a non-bank subsidiary to a non-resident.