Growth in mortgage lending fell to its lowest level in more than a decade last month, according to the latest figures from the Central Bank.

The annual growth rate in residential mortgage lending slowed again in August to 17 per cent, its lowest level since June 1997 when the rate of growth stood at 14.6 per cent.

Residential mortgage lending growth has fallen on average by one percentage point each month since the start of the year. It fell from 17.9 per cent in July.

The monthly increase of €1.3 billion in August was below the average increase of €1.6 billion between May and July, although the Central Bank noted that mortgage borrowing in August was traditionally below average.

Private-sector credit growth fell slightly to 20.1 per cent in August, down from 20.3 per cent in July. It rose by €4 billion in August, slightly below the monthly average of €4.2 billion since the start of the year.

This has brought the increase since the start of the year to €33.9 billion. Private sector credit stood at €351.7 billion in August.

Austin Hughes, chief economist with IIB Bank, said the figures represented "a significant but controlled slowdown".

"The figures don't show a collapse. They show a clear downward trend that is similar to the house price decreases . . ." he said.

"It is consistent with an underlying trend of weakness and we expect to see it soften further until people see that the interest rate growth cycle is behind them and they are more comfortable about the housing sector."

The annual growth rates have been declining steadily since peaking at 30.3 per cent in June of last year, showing the decade-long property boom is drawing to a close. The rate of increase in non-mortgage lending continued its downward trend, with an annual adjusted rate of 25 per cent in August.

The Central Bank said lending to non-financial corporations was muted in July and August, with an average monthly increase of about €1.5 billion, about half the size of the average monthly increase between March and June.

Some of the lending slowdown could be explained by lower lending to the construction and property sectors, reflecting "a marked reduction in construction activity during the summer months, possibly exacerbated by bad weather", the Central Bank said.

The annual rate of increase in credit card debt remained unchanged in August, at 11.7 per cent.