Alliance and Leicester reported a surge in mortgage lending.

The value of applications jumped by a third in the first five months of the year.

The bank said the buoyant housing market had lifted mortgage applications by an annual rate of 34 per cent.

Mortgage lending at the end of March stood at £21.97 billion, while total new lending during the first quarter increased by seven per cent year-on-year.

The jump in home loans helped first quarter revenue growth exceed the underlying 5.1 per cent growth last year.