The rate of mortgage lending continues to gather pace despite repeated warnings from the Central Bank about the lending practices of financial institutions at a time of economy fragility.
The latest monthly statistics from the Central Bank show that mortgage lending grew by 24.2 per cent or €1,093 million in August compared to the same month in 2002. The annual growth rate for July was revised down slightly to 23.9 per cent.
The statistics - which cover all aspects of private sector credit growth - confirm that mortgage lending continues to be a major factor behind private lending. Non-mortgage credit remained unchanged in August at 9.6 per cent.
Almost all the increase in private sector credit was accounted for by three lending categories - residential mortgage lending of €1,093 million, loans up to one year of €623 million and revolving loans of €503 million.
In August the new financial services regulator, IFSRA, wrote to banks and building societies about their lending practices amid concerns that some institutions were becoming lax in their assessment of borrowers' ability to repay mortgages.