MORTGAGE LENDING slowed once more in May, as the rate of increase in Irish residential mortgages fell back to 11.1 per cent, a level last seen in 1992.

Although statistics released by the Central Bank show that May recorded the highest monthly increase in residential mortgage lending so far in 2008, of €1.3 billion, the annual rate of increase declined from 11.4 per cent in April to 11.1 per cent in May.

So far in 2008, each month has posted a decline on the previous month, and the overall growth rate is way down on the highs of the property boom years when growth rates of 27 per cent were regularly reached. The last time a rate of increase of 11.1 per cent was recorded was in January 1992, and the figures are further evidence of the slowdown in the property and mortgage-lending markets.

Over the first five months of 2008, total residential mortgage lending grew to €4.9 billion, indicating an average monthly increase of less than €1 billion. Total outstanding residential mortgages stood at €144.7 billion in May.

Overall, total private-sector credit grew by €4.1 billion, or by 1.1 per cent in May, to total €390.3 billion. However, demand for private-sector credit continues to slow, with the annual rate of increase declining to 15.1 per cent in May, down from 15.9 per cent in April and 18.6 per cent in December 2007. The last time credit grew annually at this rate was in late 2003.

The rate of growth of non-mortgage credit also declined, down from 19.3 per cent in April to 18.2 per cent in May.

Outstanding indebtedness on credit cards increased in May, up to 11.9 per cent from 7.2 per cent in April. The exceptional decreases seen in May 2007 were caused by SSIA funds being used to pay off credit card debt.