Mortgage net mortgage lending grew by £1.9bn from Q4 2017, amid a focus on retention and customer service, the lender reported in results.
More than half of mortgages were retained online over the quarter, Santander said.
Gross mortgage lending was at £7.6bn from £5.3bn in the same period last year.
The bank blamed competitive pressures in the UK for a hit to profits, which fell 21% to £414m, from £525m a year earlier – there was also an impairment charge related to the collapse of Carillion.
However, pressure on new mortgage margins and a drop in customers sitting on the lender’s Standard Variable Rate (SVR) helped to push down net income – the lender expects a £5.5bn reduction in SVR customers in 2018.
Over the quarter, Santander’s total current account deposits grew by £0.5bn to £67.8bn, as customer numbers reached 5.4m.
Mortgage lending in 2018 to be in line with market
The lender said its gross mortgage lending is expected to be in line with the market for the rest of the year, as it continues to focus on service and retention.
Changes within the business and growth projects should translate into stronger results over the course of the year, according to the bank’s results statement.
Nathan Bostock, Santander chief executive, said: “Our first quarter results have been impacted by ongoing competitive pressures in the UK.
“However, we have continued to make progress across key areas of the bank, fulfilling our purpose to help people and businesses prosper.
“We have delivered exceptional growth in mortgage lending this quarter, and continued to support our corporate customers through our international offering as they expand into overseas markets.
He added: “Cost discipline remains an area of particular focus for management, with targeted actions expected to reduce the cost run rate over the year and deliver operational efficiencies.
“We are further developing our proposition through products and services tailored to add value and meet customer needs, which in turn drive improvements in customer experience.”
