The lender completed £3.3bn of mortgages in the opening three months of the year, down from the £5.6bn of home loans in the same period last year.
This saw Santander’s share of the UK market fall from 16.5% in 2012 to 9.6% in the first quarter of this year.
The bank attributed the lower lending was to ‘tightened’ lending criteria on higher loan-to-value (LTV) and a restriction on interest-only mortgages.
It added that those moved came as part of a drive to improve the quality and profitability of its mortgage portfolio. The British arm of the global business posted a pre-tax profit of £240m.
Chief executive Ana Botin said: “Looking forward, I expect greater stability in our operating environment, in the context of a UK economy which remains subdued.
“We will continue our support of UK individuals, families and businesses and to act as a strong competitor on the high street.”
