The number of mortgages issued by Irish lenders between June and the end of August declined by 25 per cent when compared with the same period in 2006, according to figures published yesterday by the Irish Banking Federation (IBF).

The IBF said 40,992 new mortgages were drawn down in the three-month period, down from 54,623 a year earlier.

The value of the mortgages issued during the quarter also declined. The IBF said just under €9 billion was drawn down between June and the end of August compared with €10.9 billion a year earlier, an 18 per cent decline.

The total mortgage book now stands at €136 billion.

In the year to date, 120,397 mortgages have been drawn down compared with 156,709 in the first nine months of 2006. This is the latest signal of a slowing in the Irish housing market.

The IBF figures show that first-time buyers represented about 19 per cent of the new mortgages issued in the third quarter, roughly the same level as in the previous three months but one point ahead of the same quarter in 2006.

Switching activity by homeowners accelerated in the period. The IBF said 7,152 or 17.4 per cent of the loans represented people moving financial institutions.

This represented an increase of 2.4 per cent on the same period of 2006.

IBF chief executive Pat Farrell said the high level of switching activity "underlined market competitiveness" among banks and building societies.

The IBF said the housing market continued to be influenced by an increase in interest rates, a moderation in prices and a slowdown in completions.

"The slowdown is to be welcomed," Mr Farrell said. "It suggests a higher degree of sustainability into the longer term."