Mortgage borrowing remained strong in August, according to new figures, with the annual rate of increase just edging down slightly from the previous month's record high. Mortgage lending during the month was up 27.6 per cent on the same month last year, just marginally down from the 27.8 per cent annual rise in July.

Overall credit growth in July eased back a bit, but the high level of mortgage lending reflects the continued buoyancy of the housing market and low interest rates. A record total of €1.7 billion in new mortgages had been extended in July, following the strong spring property season. The total fell back to €1.3 billion in August, close to the average seen in the March to June period.

While there is some evidence of a slowdown in house price growth - as shown in the recent Permanent TSB/ESRI survey - the property market remains strong and analysts will now watch borrowing trends in the key autumn property season.

The Central Bank has warned that borrowing growth needs to slow if debt is not to grow to dangerous levels over the next couple of years. It has also cautioned borrowers that they must take account of the likelihood of interest rate increases. Despite this, however, mortgage lending growth remains buoyant and house price growth continues, albeit at a slowing rate.

While mortgage borrowing remains buoyant, the figures indicate some slowing in other areas of credit. Total lending expanded by €1.6 billion during the month, one of the lowest monthly increases this year.