DESPITE spiralling house prices, the Irish housing market is not heading for the kind of crisis generated in Britain in the 1980s, according to Irish Permanent chairman Mr John Bourke.

Addressing shareholders at the group's annual meeting yesterday, Mr Bourke said he was confident that this economy was avoiding the "more obvious pitfalls" of its new prosperity. "Let us all try to keep it that way," he said.

The Irish Permanent, he said "does not" and "will not" relax its lending guidelines which have proved to be prudent and sensible over the years. "Moreover, we are in a position to say, as the largest mortgage provider in the State, that we have not witnessed any significant breach of prudent guidelines in the marketplace as a whole," Mr Bourke stated..

Speaking before the rise in Central bank borrowing rates, he said that growth in mortgage lending was likely to remain strong, with a growing young population driving the market for some time yet. According to its advisers, the Irish Permanent expects that between 28,000 and 30,000 new homes would be needed this year and every year for the next five ye art or more, he said, with the needs being proportionately higher in the Dublin region.

"The point I make is that there is a strong housing market out there, but that it is a real one driven by real requirement and demand. The banks and building societies who supply the loans needed to satisfy that demand are not the drivers of it. They are doing their job, which is to enable people to own their home if they wish to do 59, and they are doing it well, and on more competitive terms than I can ever recall," Mr Bourke said.

The emotive issue of the widows and widowers who lost out on free shares at the time of the flotation because they were not the first person named on qualifying accounts was once again given an airing. Again and again, shareholders asked the board if it could not make some sort of gesture towards them in compensation for their loss.

The group was also questioned on its sponsorship of the Irish rugby team. "Is it not throwing good money after bad?" Mr Dan Carroll asked. But Irish Permanent chief executive Mr Roy Douglas disagreed. The sponsorship was a very good one for the company, he said. "It would help I suppose if the results from the team were somewhat better, but we can only live in hope."