Mortgage lending growth at 16-yr low

The rate of increase in residential mortgage lending fell to a 16-year low last month according to new data released by the Central Bank today.

While the month on month increase of €1.3 billion was the largest net monthly increase in the year to date, the annual increase dropped to 11.1 per cent, the lowest since 1992.

Overall mortgage lending stood at €144.7 billion at the end of last month, according to the Central Bank.

Further indication of the changing economic circumstances can be observed from the slowing demand for private sector credit growth last month.

In the month private sector credit grew €4.1 billion, bringing the annual rate of expansion to -15.1 per cent, from 15.9 per cent in April.

The last time private sector credit growth expanded at this rate was 2003.

The Central Bank observed in May 2007 people used their maturing SSIA accounts to pay off their credit card debt resulting "in a sizable drop in outstanding indebtedness on credit cards".

However, with the SSIA effect now gone, the Central bank noted that year on year increase in credit card debt rose from 7.2 per cent in April to 11.9 per cent last month.