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High street bank Santander boosted by buy-to-let rush

By Holly Williams

High street bank Santander said the buy-to-let rush ahead of this month's stamp duty increase helped profits rise 13% as it enjoyed a surge in mortgage lending.

The Spanish-owned lender said UK pre-tax profits increased to £532m in the first three months of 2016 - up from £470m a year earlier as total lending grew by £7.1bn.

But the group warned lending will not rise at the same pace after the Government's stamp duty increase on buy-to-let properties came into effect on April 1, with the industry set to face "challenges".

It said: "The surge in completions in March may have skewed figures and meant that the first quarter has been top-loaded with lending that would have otherwise taken place throughout the year.

"There are a number of factors that could impact lending throughout 2016 and we recognise the industry as a whole may face some challenges."

The group also cautioned that house price growth would slow this year. Santander increased net mortgage lending - total advances less redemptions - by £1.3bn in the quarter to the end of March, which compares with a £400m fall a year ago.

Net lending to new businesses rose 10% while its 1/2/3 World offering for current accounts customers gained around 131,000 customers.

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