Mortgage lending increases by 25.8%

BORROWING is growing at the fastest rate for nearly three years, according to statistics from the Central Bank yesterday.

Mortgage lending grew by 25.8% in January, up from 25.5% last December, the monthly private sector credit figures show. And personal borrowing grew by 18.7% in January, up from 17.9% in December, the highest rate of growth since July 2001. Some €2 billion was borrowed in January, with non-mortgage borrowing accounting for about two-thirds of this number.

The rapid increase last month in lending will raise concerns that the housing market is overheating and individuals are borrowing too much. But IIB Bank chief economist Austin Hughes said the statistics are not that alarming. In the run-up to Christmas there were signs that spending has slowed down, reflected in retrial sales figures and that the January private sector credit figures reflect an improvement in consumer sentiment since the start of the year.