In its third quarter results, Lloyds revealed that its mortgage lending had increased by £3.5 billion over the quarter, boosting its profits to a higher-than-expected £1bn.

Mortgage activity looks set to remain healthy too, with the bank reporting a 22% market share of approvals, with a strong pipeline.

Lloyds also revealed that it has granted around 477,000 mortgage payment holidays to borrowers whose finances have been impacted by the Covid-19 pandemic, equating to customer balances of around £62.7 billion. As of this week 97% of those holidays have matured, with 83% having resumed repayments.

The bank confirmed that it has put aside around £301 million to cover loans that turn bad as a result of the economic uncertainty ahead.

António Horta-Osório, group chief executive at Lloyds, said: “Although the outlook remains uncertain, our customer-focused strategy and the strength of the Group’s business model will allow us to continue to help Britain recover and play our part in helping to return the UK to prosperity. This is fully aligned with the Group’s long-term strategic objectives, the position of the franchise and the interests of our shareholders.”

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, commented that Lloyds “wins a rosette” for the surge in applications and significant increase in mortgage lending, as well as the fact that it has “nabbed a large share of approvals” for the next quarter too.

She added: “This is encouraging news, but once the stamp duty holiday ends and given the fragile economic recovery, there are concerns the mini housing boom could turn into a bust, which would lead to a reversal of fortunes for this part of Lloyds business.”