Mortgage lending up by €1.7 billion in May

MORTGAGE lending grew by almost €1.7 billion in May and came close to setting a new record, according to new figures from the Central Bank.

The bank said in its monthly bulletin yesterday that mortgage debt smashed through the €80 billion barrier during the month and had grown by 25.9% over the year to May. The €1.7 billion increase almost matched the highest-ever monthly increase, in July 2004.

Total debt owed by private sector borrowers stood at €220 billion at the end of the month, which was 27% higher than in May 2004. The annual growth rate edged up marginally from April, when the rolling 12-month average increase stood at 26.7%.

The bank said demand for credit was strong and mortgage lending activity had picked up on previous months. Total credit outstanding jumped by €8 billion during May, with €2.6 billion accounted for by loans to non-banking companies located in Dublin’s International Financial Services Centre (IFSC). A further €3.2 billion was lent to financial intermediaries.

Special Savings Incentive Accounts (SSIAs) continued to mop up cash and attracted a further €146 million, bringing the total held in the government-backed scheme to €5.6 billion.