Virgin Money expects homebuying and overall gross lending to be flat in 2018 amid a continued squeeze on household finances.
At the end of the third quarter, Virgin Money's gross lending was £6.5bn and net lending was £3.2bn, resulting in mortgage balance growth of 11 per cent, putting it ahead of the market.
Peter Rogerson, commercial director, mortgages and savings at Virgin Money, said: "Market expectations are for economic growth to slow slightly in 2018, and there is likely to be a squeeze on household finances as a result of low wage growth and higher inflation.
"However, strong employment levels and low interest rates continue to support customer affordability, and consumer confidence in the housing market remains robust."
The lender, which was ranked the UK's eighth-biggest in terms of gross lending during 2016 by the Council of Mortgage Lenders (CML) – now part of UK Finance - predicts it will achieve a market share of around 3 per cent next year.
Virgin Money's market share in 2016 was 3.4 per cent, according to the CML.
Mr Rogerson added that measures announced by chancellor Philip Hammond in the Autumn Budget - investment in house building, planning reforms to increase the availability of land and stamp duty relief for first-time buyers – would have little impact on affordability in the near term.
Virgin Money plans to continue to enhance the support it provides to first-time buyers and the new build sector following product launches aimed at these markets in 2017.
Mr Rogerson said: "On the remortgage side, the low interest rate environment will continue to offer attractive opportunities for borrowers to save money – and the base rate increase in November is likely to act as a further incentive for customers to remortgage to a better deal.
"While we expect the volume of buy-to-let purchase transactions to remain subdued in 2018, there will be a sizeable maturity market that will support lending activity."