Mortgage lending has continued to accelerate with new figures for September showing financial institutions lent nearly €1.4 billion to homebuyers.
Monthly statistics from the Central Bank of Ireland show residential mortgage lending rose to 24.6 per cent when compared with the same month last year.
This is a faster rate of growth than August 2003 when mortgage lending grew by 24.2 per cent compared with the previous 12 months.
The news follows a report from the Central Statistics Office (CSO) yesterday that the Irish economy grew at a much faster than expected rate in the second quarter of 2003.
CSO figures suggest that the rate of economic growth - measured by gross national product - rose by 3.1 per cent on a year-on-year basis in the second quarter of 2003.Consumer spending rose 2.1 per cent in during those months underpinned much of the recovery.
According to the Central Bank data today private sector credit in the economy overall grew marginally by 14.7 per cent in September, up 0.1 per cent on the previous month.
The continuing growth in mortgage lending is a concern for the Central Bank, which has warned lending institutions about the need for prudent lending.
It notes that annual mortgage growth has been close to 24 per cent throughout the year and is now higher than any stage since December 2000.
Mortgages and overdrafts were the main drivers of credit growth in September, rising by €1.4 million and €343 million respectively. The rise in overdrafts was particularly sharp when compared with a sharp fall in overdraft lending in August when amount of overdrafts fell, by €268 million.
The amount of money held on deposit increased across all categories. Deposits due to mature within two years showed the biggest increase with the amount lodged in this accounts rising €750 million last month.
Deposits that can be redeemed with notice of up to three months increased by €120 million, down on the growth recorded last month.
Money lodged in the Government-backed Special Savings Incentive Accounts (SSIAs) rose €130.2 million to €2.7 billion.
