Mortgage lending in Ireland grew by €20m in March, according to figures released by the Central Bank.

The bank said home buyer business accounted for €428m during the first quarter of 2009.

This is a fraction of the €2.6bn lent during the same period last year.

Central Bank officials described the March lending increase as "historically low".

The annual rate of growth in residential mortgage lending fell to 4.2% from 4.9% in February.

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"Mortgage demand is likely to have been dampened by general economic conditions, uncertainty with regard to future income and the expectation of further declines in house prices," the bank said in its monthly credit figures.

The statement added: "On the supply side, recent Irish results from the euro area Bank Lending Survey suggest banks are tightening their lending criteria, and reductions in official ECB interest rates are not being passed on in full by all mortgage providers."

Domestic lending fell by €3.9bn in March to €391.7bn, which the bank says more than offsets the increases that had been recorded for the first two months of the year.

The annual growth rate for private credit fell from 4.8% in February to 2.3%, the lowest since January 1994.

(PR/JM)