Despite an unprecedented lending boom, people with combined incomes of less than £30,000 (€38,100) are increasingly being squeezed out of the housing market, according to the latest Government statistics. Skilled, semi-skilled and manual workers, as well as farmers and fishermen, are also being priced out.

The annual housing statistics bulletin, published by the Department of the Environment and Local Government, says banks and building societies in the Republic approved home loans totalling £4.5 billion (€5.7 billion) last year. This was a record sum, and an increase of 28 per cent on the 1997 figure of £3.5 billion (€4.4 billion). By comparison, the figure for 1994 was just £1.9 billion (€2.4 billion).

An analysis of the incomes of those having their loans approved reveals a steady squeezing of the less well-off. In 1994, 59 per cent of all loans approved went to borrowers with combined incomes of £30,000 a year or less. Last year, less than 38 per cent went to this group.

The statistics for those on the lowest pay scale generate the most dramatic drop. In 1994, more than 17 per cent of loans went to people earning £20,000 or less; last year just 4.5 per cent of approved loans were for those in this wage band.

Analysed by category of occupation, the loan approval figures underscore this trend. Whereas in 1994 less than 38 per cent of loans were for those who fit into the category "professional, managerial, employer", last year 53 per cent of loans were authorised for this group.

In 1994, "skilled, semi-skilled, unskilled, manual" workers, as well as farmers and fishermen, received almost 36 per cent of loans. Last year, the same category of workers got just 25 per cent of the approved loans.

Over the period, a series of general wage agreements, negotiated between the Government and the social partners, kept a tight lid on salary increases for many low and middle-earning workers.

But while the consumer price index rose by 10 percentage points from 1994 to 1998, the cost of new houses has soared by 77 percentage points. In many areas, and especially in Dublin, the increase in house prices has been far greater. Second-hand homes in some parts of the city have more than tripled in price since 1994.

The latest figures will worry the Government, because they may signal serious housing problems in the future. If the trend continues, large numbers of people will find themselves unable to purchase houses, and could demand homes at a reasonable rent from their local authorities. The local authorities would in turn demand from central government the financial resources to build more houses.

The Government can take some comfort from the latest statistics for house completions. According to the figures, 42,349 new homes were built in 1998, 9 per cent more than the previous year, and almost 58 per cent more than the 26,863 new homes built in 1994.

However, while the Republic's local authorities were building one new home for every 11 in the private sector in 1994, the ratio for last year had dropped to less than one in 15.

Reacting to the latest statistics, the Minister of State for Housing and Urban Renewal, Bobby Molloy, said: "Our unprecedented demand for housing arising from strong economic growth, population growth and other demographic factors means we need to continue to produce new housing at record levels."

The house completions figure for 1998 was well ahead of projections, he added, and represented the fourth consecutive year of record housing output. The Government would continue to "take every possible measure to increase the supply of housing in 1999 and into the new millennium", Mr Molloy said.