The lender’s latest financial statement showed gross mortgage residential mortgage lending of £18.4bn, up £4bn on 2012.
First-time buyers made up £3.4bn of this total.
Santander said it would continue to ‘carefully manage’ higher loan-to-value and interest-only mortgages having tightened criteria on these types of loans in early 2012. The value of the firm’s interest-only mortgages fell £6.4bn year-on-year to £61.1bn.
Across the year net mortgage lending fell £8.5bn in total but the bank said it expected the mortgage market as a whole to grow in the coming year and anticipated an increase in net mortgage loans during 2014.
However a more buoyant market will likely see a reduction in the number of borrowers on its Standard Variable Rate (SVR), it added.
Ana Botin, chief executive officer, said: “Our goal is to transform Santander UK into a bank which is simple, personal and fair for our customers and our other stakeholders. We provided £18.4bn of mortgages to UK households, including £3.4bn to first-time buyers.
“The UK economic recovery is strengthening, although uncertainties remain in the banking environment for the year ahead.
“We will continue to support our customers and the broader economy: our intention is to grow both our commercial and retail lending in 2014. We remain confident that we will deliver on our key commitments for the end of 2015.”