Virgin Money gross mortgage lending slips in the first quarter

April 25 (Reuters) - British bank Virgin Money Holdings Plc reaffirmed its 2017 guidance as it posted lower gross mortgage lending for the first three months of the year, noting strong competition in parts of the mortgage market.

Gross mortgage lending fell 4.8 percent to 2 billion pounds ($2.6 billion) for the three months ended March 31. However, Virgin Money's share of the UK mortgage market held at 3.4 percent.

Chief Executive Jayne-Anne Gadhia said the UK economy had fared better than expected following Britain's vote last June to leave the European Union, resulting in the bank benefiting from lower unemployment and continued, albeit slower, house price growth.

"We watch the increase in consumer indebtedness closely and continue to lend responsibly to our prime books of mortgage and credit card customers who are showing no signs of strain in the current environment," Gadhia said in a statement.

Virgin Money, one of a number of smaller "challenger" banks seeking to taking on Britain's biggest lenders, is aiming for a double-digit percentage return on tangible equity this year as well as a 3.0-3.5 percent share of gross mortgage lending.

($1 = 0.7815 pounds) (Reporting by Esha Vaish and Tenzin Pema in Bengaluru; Editing by Mark Potter)