New figures have revealed that Abbey has overtaken the Halifax as the UK's largest mortgage lender. Abbey now accounts for 26% of the home loan sector, according to figures collated in the first 6 months of 2008.

According to The Times, Antonio Horta Osorio, Abbey's chief executive, said: "We held back our market share during the first half of last year when when margins were low or unprofitable. Since then, as others have withdrawn from the market, we've taken the opportunity to take higher-margin, low loan-to-value business and focused on retaining our existing customers."

Banco Santander, Abbey's Spanish owner, bought the Alliance & Leicester for a knock down £1.3bn this month, and has been the subject of discussion regarding a possible takeover of HBOS, the Halifax's troubled parent company.

Abbey out- performed the sector, contributing £485 million in profits to its Spanish parent group, up 20% on the first half of last year.

The lender's net mortgage lending soared to £8.3 billion in the six months to June 30, after seeing market share rise to 16% in the first quarter and then more than doubling to 35% in the following three months.