**Exhibit 15.3**

 

**Dated: June 30, 2005**

 

**Halifaxplc: Annual Compliance Certificate**

 

Dated: June 30, 2005

 

Halifax plc:Annual Compliance Certificate

 

Theundersigned, a duly authorised representative of Halifax plc, acting asServicer (the Servicer), pursuant to the Amended and Restated ServicingAgreement between the Servicer, Halifax plc as Seller, Permanent MortgagesTrustee Limited as Mortgages Trustee, Permanent Funding (No. 1) Limited asFunding 1 and The Bank of New York as the Security Trustee dated 22nd June2005, as amended (the Agreement), certifies that:

 

1.               A review of the activities of the Servicerduring the period from 1st January 2004 to 31st December 2004 and itsperformance under the aforementioned Agreement has been made under mysupervision.

 

2.               Based on such review, to the best of myknowledge, the Servicer has fulfilled its obligations under the Agreement andthe minimum servicing standards attached as Appendix 1 throughout the periodfrom 1st January 2004 to 31st December 2004 in all materialrespects, except as may be set forth in paragraph 3 below.

 

3.               The following is a description of anyexceptions to paragraph 2 above:

 

None.

 

Capitalised terms used but not defined in this Annual ComplianceCertificate have their respective meanings set forth in the Agreement, unlessthe context requires otherwise or unless otherwise defined in this Certificate.

 

IN WITNESS WHEREOF, the undersigned has duly executed this AnnualCompliance Certificate this 30th day of June, 2005.

 
| /s/ David Nicholson  |   |
|----------------------|--------|
| Authorised signatory |
| Halifax plc          |

 

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**Appendix1: Specified standards**

 

Permanent Funding(No. 1) Limited has identified the following standards, defined as the minimumservicing standards to which Halifax plc as Servicer is required to comply.

** **

**(1)*Generalservicing considerations*.**

 

(i) Policies and procedures are instituted to monitor any performance orother triggers and events of default in accordance with the transactionagreements.

 

**(2)*Cash collectionand administration*.**

 

(i) Payments onpool assets are deposited into the appropriate custodial bank account - thePermanent Mortgages Trustee GIC control account - no more than two businessdays of receipt.

 

(ii) Advances of funds or guarantees regarding collections, cash flows ordistributions, and any interest or other fees charged for such advances, aremade, reviewed and approved as specified in the transaction agreements.

 

(iii) The related accounts for the transaction, such as cash reserveaccounts or accounts established as a form of overcollateralization, areseparately maintained (e.g., with respect to commingling of cash) as set forthin the transaction agreements.

 

(iv) Reconciliations are prepared on a monthly basis for all asset-backedsecurities related bank accounts, including custodial accounts and related bankclearing accounts namely the Permanent Mortgages Trustee GIC control account,Permanent Funding (No. 1) plc GIC account, Permanent Financing (No. 3) plccapital account and Permanent Financing (No. 3) plc transaction account,Permanent Financing (No. 4) plc capital account and Permanent Financing (No. 4)plc transaction account, Permanent Financing (No. 5) plc capital account andPermanent Financing (No. 5) plc transaction account, Permanent Financing (No. 6)plc capital account and Permanent Financing (No. 6) plc transaction account.These reconciliations:

 

(A) Are mathematically accurate;

 

(B) Are prepared within 30 calendar days after the bank statement cut-offdate;

 

(C) Are reviewed and approved by someone other than the person whoprepared the reconciliation; and

 

(D) Contain explanations for reconciling items. These reconciling itemsare resolved within 90 calendar days of their original identification.

 

**(3)*Investorremittances and reporting*.**

 

(ii) Amounts due to investors are allocated and remitted in accordancewith timeframes, distribution priority and other terms set forth in thetransaction agreements.

 

**(4)*Pool assetadministration*.**

 

(i) The Servicerhas made reasonable endeavours to maintain collateral or security on poolassets.

 

(ii) Pool assetsand related documents are safeguarded as required by the transactionagreements.

 

(iii) Anyadditions, removals or substitutions to the asset pool are made, reviewed andapproved in accordance with any conditions or requirements in the transactionagreements.

 

(iv) The Servicer’srecords regarding the pool assets agree with the lender’s records with respectto the unpaid principal balance.

 

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(v) Changes withrespect to the terms or status of a pool asset (for example loan modificationsor re-ageings) are made, reviewed and approved by authorized personnel inaccordance with the transaction agreements and related pool asset documents.

 

(vi) Lossmitigation or recovery actions (*e.g.*,foreclosures or repossessions) are initiated, conducted and concluded inaccordance with the timeframes or other requirements established by thetransaction agreements. Such programs include a hierarchy of workout procedures(*e.g.*, forbearance plans,modifications and deeds in lieu of foreclosure, as applicable).

 

(vii) Recordsdocumenting collection efforts are maintained during the period a pool asset isdelinquent in accordance with the transaction agreements. Such records aremaintained on at least a monthly basis and describe the entity’s activities inmonitoring delinquent pool assets including, for example, phone calls, lettersand payment rescheduling plans in cases where delinquency is deemed temporary (*e.g.*, illness or unemployment).

 

(viii)Adjustments to interest rates or rates of return for pool assets with variablerates are computed based on the related pool asset documents.

 

(ix)Delinquencies, charge-offs and uncollectible accounts are recognized andrecorded in accordance with the transaction agreements.

 

(x) Any externalenhancement or other support is maintained as set forth in the transactionagreements.

 

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