EXHIBIT 
  10.19

HOLMES
  FINANCING (NO 4) PLC

REPORT
  AND ACCOUNTS

FOR THE
  YEAR ENDED 31 DECEMBER 2004

Registered
  in England and Wales No. 4167953

---





HOLMES FINANCING (NO
  4) PLC

Report of the Directors

The Directors submit their
  report together with the accounts for the year ended 31 December 2004.

1. Principal
  activity and review of the year

The principal activity
  of the Company is to issue asset backed notes and enter into all financial arrangements
  in that connection. No future changes in activity are envisaged.

2. Results
  and dividends

The profit for the year
  on ordinary activities after tax amounted to £nil (2003 - £1,000).
  The Directors do not recommend the payment of a dividend (2003 - £nil).
  The retained profit of £nil (2003 - £1,000) has been transferred
  to reserves.

3. Financial
  Instruments

The Companys financial
  instruments, other than derivatives, comprise loans to group undertakings, borrowings,
  cash and liquid resources, and various items, such as debtors and creditors
  that arise directly from its operations. The main purpose of these financial
  instruments is to raise finance for the Companys operations.

The Company also enters
  into derivatives transactions (principally cross currency swaps). The purpose
  of such transactions is to manage the currency risks arising from the Companys
  operations and its sources of finance.

It is, and has been throughout
  the year under review, the Companys policy that no trading in financial
  instruments shall be undertaken.

The main risk arising from
  the Companys financial instruments is currency risk. The Company has debt
  securities in issue denominated in US Dollars, Euros and Swiss Francs. The Board
  reviews and agrees policies for managing this risk. The Companys policy
  is to eliminate all exposures arising from movements in exchange rates by the
  use of cross currency swaps to hedge payments of interest and principal on the
  securities.

All other assets, liabilities
  and transactions are denominated in Sterling.

4. Directors
  and their interests

The Directors who served
  throughout the year, except as noted, were:
  Mr D M Green 
  Mr M McDermott 
  SPV Management Limited

---





At the year-end and the
  previous year-end, Holmes Holdings Limited and M. McDermott jointly held one
  share in the Company.

SPV Management Ltd and
  M. McDermott held one share in the holding company, Holmes Holdings Limited,
  at the year-end. The other share in Holmes Holdings Limited was held by SPV
  Management Limited. M. McDermott is also a Director of SPV Management Limited.

None of the other Directors
  had a beneficial interest in the shares of the Company, or of the holding company,
  Holmes Holdings Limited and its subsidiaries, at the year-end.

5. Directors'
  responsibility in respect of the preparation of accounts

The Directors are required
  by UK company law to prepare financial statements for each financial year that
  give a true and fair view of the state of affairs of the Company as at the end
  of the financial year and the profit or loss for that period.

The Directors confirm that
  suitable accounting policies have been used and applied consistently and that
  reasonable and prudent judgements and estimates have been made in the preparation
  of the financial statements for the year ended 31 December 2004. The Directors
  also confirm that applicable accounting standards have been followed and that
  the statements have been prepared on the going concern basis.

The Directors are responsible
  for keeping proper accounting records which disclose with reasonable accuracy
  at any time the financial position of the Company and to enable them to ensure
  that the financial statements comply with the Companies Act 1985. They are also
  responsible for the Companys system of internal control and for safeguarding
  the assets of the Company and hence for taking reasonable steps for the prevention
  and detection of fraud and other irregularities.

6. Going
  concern

The Directors confirm that
  they are satisfied that Holmes Financing (No.4) plc has adequate resources to
  continue in business for the foreseeable future. For this reason, they continue
  to adopt a going concern basis in preparing the financial statements.

7. Auditors

At the forthcoming Annual
  General Meeting of the Company it will be proposed that Deloitte & Touche
  LLP be re-appointed as auditors of the Company.

By Order of the Board



/s/ Karen Carson

For and on behalf of 
  Abbey National Secretariat Services Limited 
  Company Secretary

---



17 June 2005



Registered Office Address:

Abbey National House 
  2 Triton Square 
  Regents Place 
  London 
  NW1 3AN

---





INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF HOLMES FINANCING (NO
  4) PLC

We have audited the financial
  statements of Holmes Financing (No 4) plc for the year ended 31 December 2004
  which comprise the profit and loss account, the balance sheet and the related
  notes 1 to 17. These financial statement s have been prepared under the accounting
  policies set out therein.

Respective responsibilities
  of Directors and auditors

As described in the statement
  of Directors responsibilities, the Companys Directors are responsible
  for the preparation of the financial statements in accordance with applicable
  United Kingdom law and accounting standards. Our responsibility is to audit
  the financial statements in accordance with relevant United Kingdom legal and
  regulatory requirements and auditing standards, and the Listing Rules of the
  Financial Services Authority.

We report to you our opinion
  as to whether the financial statements give a true and fair view and are properly
  prepared in accordance with the Companies Act 1985. We also report if, in our
  opinion, the Directors report is not consistent with the financial statements,
  if the Company has not kept proper accounting records, if we have not received
  all the information and explanations we require for our audit, or if information
  specified by law regarding Directors remuneration and transactions with
  the Company is not disclosed.

We read the Directors
  report for the above year and consider the implications for our report if we
  become aware of any apparent misstatements.

Basis of audit opinion

We conducted our audit
  in accordance with United Kingdom auditing standards issued by the Auditing
  Practices Board. An audit includes examination, on a test basis, of evidence
  relevant to the amounts and disclosures in the financial statements. It also
  includes an assessment of the significant estimates and judgements made by the
  Directors in the preparation of the financial statements and of whether the
  accounting policies are appropriate to the Companys circumstances, consistently
  applied and adequately disclosed.

We planned and performed
  our audit so as to obtain all the information and explanations which we considered
  necessary in order to provide us with sufficient evidence to give reasonable
  assurance that the financial statements are free from material misstatement,
  whether caused by fraud or other irregularity or error. In forming our opinion,
  we also evaluated the overall adequacy of the presentation of information in
  the financial statements.

Opinion

In our opinion the
  financial statements give a true and fair view of the state of the Companys
  affairs as at 31 December 2004 and of its result for the
  year then ended and have been properly prepared in accordance with the Companies
  Act 1985.

Date:   17
June 2005



/s/ Deloitte & Touche
  LLP

Deloitte & Touche LLP
  Chartered Accountants and Registered AuditorsLondon

---





HOLMES FINANCING (NO 4) PLC

Profit and loss account
  
  For the year ended 31 December 2004

|                                                                             |      |  |          |   |          |   | 
|---------------------------------------------------------------------------- | ---- |  | -------- | - | -------- | - | 
|                                                                             | Note |  | 2004     |   | 2003     |   | 
|                                                                             |      |  | £'000    |   | £'000    |   | 
|                                                                             |      |  |          |   |          |   | 
|Interest receivable                                                          | 2    |  | 102,058  |   | 112,433  |   | 
|Interest payable                                                             | 3    |  | (102,058 | ) | (112,432 | ) | 
|                                                                             |      |  |          |   |          |   | 
|Net interest income                                                          |      |  | –        |   | 1        |   | 
|OPERATING PROFIT
      ON ORDINARY ACTIVITIES BEFORE TAXATION                | 4    |  | –        |   | 1        |   | 
|Tax on profit on ordinary activities                                         | 5    |  | –        |   | –        |   | 
|PROFIT ON ORDINARY
      ACTIVITIES AFTER TAXATION AND RETAINED FOR THE YEAR |      |  | –        |   | 1        |   | 
|Profit and loss account brought forward                                      |      |  | 1        |   | –        |   | 
|                                                                             |      |  |          |   |          |   | 
|Profit and loss account carried forward                                      |      |  | 1        |   | 1        |   | 
|                                                                             |      |  |          |   |          |   | 

There are no recognised
  gains or losses in either the current or previous financial years other than
  the profit for the financial year and therefore no statement of total recognised
  gains and losses is required.

There is no difference
  between the profit on ordinary activities before taxation and the retained profit
  for the year stated above and their historical cost equivalents.

All transactions are derived
  from continuing operations.

---





HOLMES FINANCING (NO 4) PLC

Balance sheet 
  As at 31 December 2004

|                                                               |      |  |           |  |           | 
|-------------------------------------------------------------- | ---- |  | --------- |  | --------- | 
|                                                               | Note |  | 2004      |  | 2003      | 
|                                                               |      |  | £'000     |  | £'000     | 
|                                                               |      |  |           |  |           | 
|FIXED ASSETS                                                   |      |  |           |  |           | 
|Loans to Group Undertaking                                     | 6    |  | 1,836,000 |  | 2,525,750 | 
|                                                               |      |  |           |  |           | 
|CURRENT ASSETS                                                 |      |  |           |  |           | 
|Debtors                                                        | 7    |  | 20,484    |  | 22,125    | 
|Cash at bank and in hand                                       | 8    |  | 173,327   |  | 203,749   | 
|                                                               |      |  |           |  |           | 
|                                                               |      |  | 193,811   |  | 225,874   | 
|                                                               |      |  |           |  |           | 
|CREDITORS –
      amounts falling due within one year          | 9    |  | 193,760   |  | 225,823   | 
|                                                               |      |  |           |  |           | 
|NET CURRENT ASSETS                                             |      |  | 51        |  | 51        | 
|                                                               |      |  |           |  |           | 
|                                                               |      |  |           |  |           | 
|TOTAL ASSETS LESS
      CURRENT LIABILITIES                    |      |  | 1,836,051 |  | 2,525,801 | 
|                                                               |      |  |           |  |           | 
|CREDITORS –
      amounts falling due after more than one year | 10   |  | 1,836,000 |  | 2,525,750 | 
|                                                               |      |  |           |  |           | 
|NET ASSETS                                                     |      |  | 51        |  | 51        | 
|                                                               |      |  |           |  |           | 
|                                                               |      |  |           |  |           | 
|CAPITAL AND RESERVES                                           |      |  |           |  |           | 
|                                                               |      |  |           |  |           | 
|Called up share capital                                        | 13   |  | 50        |  | 50        | 
|Profit and loss account                                        |      |  | 1         |  | 1         | 
|                                                               |      |  |           |  |           | 
|EQUITY SHAREHOLDERS'
      FUNDS                               | 14   |  | 51        |  | 51        | 
|                                                               |      |  |           |  |           | 

The financial statements
  on pages 4 to 12 were approved by the Board of Directors on 17 June 2005

Signed on behalf of the Board
  of Directors



M McDermott 
  Director

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HOLMES FINANCING (NO 4) PLC

NOTES TO THE ACCOUNTS
  FOR THE YEAR ENDED 31 DECEMBER 2004

1. Accounting Policies

Basis of accountingThe accounts have been prepared under the historical cost convention
  and in accordance with applicable United Kingdom law and accounting standards.
  The particular accounting policies adopted are described below:

Presentation
  of the profit and loss accountDue to the nature of the business the Directors are
  of the opinion that it is more appropriate to use net interest income rather
  than turnover in presenting the profit and loss account.

Interest Receivable 	  	  Interest receivable is recognised on an accrual basis.

Fixed AssetsLoans to group undertakings held as fixed assets are stated at
  cost less provision for any impairment.

DerivativesTransactions
are undertaken in derivative financial instruments, derivatives, which include cross currency swaps.  Derivatives are entered into for the purpose of eliminating risk from potential movements in foreign exchange rates inherent in the Companys
non-trading assets and liabilities. Non-trading assets and liabilities are those
intended for use on a continuing basis in the activities of the Company. A derivative
is designated as non-trading where there is an offset between the effects of
potential movements in market rates of the derivative and the designated asset
or liability being hedged. Non-trading derivatives are reviewed regularly for
their effectiveness as hedges. Non-trading derivatives are accounted for on an
accruals basis, consistent with the asset or liability being hedged. Income and
expense on non-trading derivatives are recognised as they accrue over the life
of the instruments as an adjustment to interest receivable or payable.

Interest receivable and payable on foreign
currencyInterest receivable and pay able arising in foreign
  currencies is translated at the average rates of exchange over the accounting
  year unless it is hedged in which case the relevant hedge rate is applied. Assets
  and liabilities denominated in foreign currencies are translated into sterling
  at the contracted hedge rates.

Debt securities 	  	  Debt Securities in Issue are stated at net proceeds.

Cash flow statementThe Company is a wholly owned subsidiary of Holmes Holdings Limited,
  a company registered in England and Wales. Accordingly, the Company has taken
  advantage of the exemption in paragraph 5(a) of Financial Reporting Standard
  1 (Revised), Cash Flow Statements and not published its own cash flow statement.

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HOLMES FINANCING (NO 4) PLC

NOTES TO THE ACCOUNTS
  FOR THE YEAR ENDED 31 DECEMBER 2004

|2. Interest
      receivable                                                                                                                                                                                                                                |           |  |           | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- |  | --------- | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|                                                                                                                                                                                                                                                            | 2004      |  | 2003      | 
|                                                                                                                                                                                                                                                            | £'000     |  | £'000     | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|Interest receivable from group
       companies (see note 6)                                                                                                                                                                                                | 99,746    |  | 109,953   | 
|Interest receivable on collateralised cash (see note 8)                                                                                                                                                                                                     | 2,312     |  | 2,480     | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|                                                                                                                                                                                                                                                            | 102,058   |  | 112,433   | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|All of the income is derived
    from one geographical segment.                                                                                                                                                                                             |           |  |           | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|3. Interest
      payable                                                                                                                                                                                                                                   |           |  |           | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|                                                                                                                                                                                                                                                            | 2004      |  | 2003      | 
|                                                                                                                                                                                                                                                            | £'000     |  | £'000     | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|Interest payable on debt securities
    (see note 11).                                                                                                                                                                                                      | 99,746    |  | 109,952   | 
|Interest payable on collateralised cash                                                                                                                                                                                                                     | 2,312     |  | 2,480     | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|                                                                                                                                                                                                                                                            | 102,058   |  | 112,432   | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|4. Profit on
      ordinary activities before taxation                                                                                                                                                                                                      |           |  |           | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|The Company has no employees (2003: none)
    other than its directors.                                                                                                                                                                                     |           |  |           | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|No
      emoluments were paid to the Directors by the Company during the current
    year	(2003: £ nil).                                                                                                                                                    |           |  |           | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|All administrative
      expenses, including auditors' remuneration, in the current and prior year
      were paid for, and borne, by Holmes Funding Limited, a fellow subsidiary
      undertaking. Because of this, no expenses are shown in the Company.
|                                                                                                                                                                                                                                                            |           |  |           | 
|5. Tax on profit
      on ordinary activities                                                                                                                                                                                                               |           |  |           | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|                                                                                                                                                                                                                                                            | 2004      |  | 2003      | 
|                                                                                                                                                                                                                                                            | £'000     |  | £'000     | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|UK Corporation Tax for the year at 0% (2003:0%)                                                                                                                                                                                                             | –         |  | –         | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|                                                                                                                                                                                                                                                            | –         |  | –         | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|The company qualifies
      for the starting companies rate
    of corporation tax of nil%.                                                                                                                                                                |           |  |           | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|6. Loans to
      Group Undertaking                                                                                                                                                                                                                         |           |  |           | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|                                                                                                                                                                                                                                                            | 2004      |  | 2003      | 
|                                                                                                                                                                                                                                                            | £'000     |  | £'000     | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|Repayable:                                                                                                                                                                                                                                                  |           |  |           | 
|In more than two but not more than five
    years                                                                                                                                                                                                           | 840,000   |  | 490,000   | 
|More than five years                                                                                                                                                                                                                                        | 996,000   |  | 2,035,750 | 
|                                                                                                                                                                                                                                                            |           |  |           | 
|                                                                                                                                                                                                                                                            | 1,836,000 |  | 2,525,750 | 
|                                                                                                                                                                                                                                                            |           |  |           | 

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The loans are all denominated
  in sterling and are at variable rates of interest, based on LIBOR for three-
  month sterling deposits

7. Debtors

|                                                              |       
|------------------------------------------------------------- | ------
|                                                              | 2004  
|                                                              | £'000 
|                                                              |       
|Amounts due from group undertaking                            | 1     
|Called up share capital not paid                              |       
|– due from
    parent undertaking                             | 37    
|Accrued interest receivable
    on loans to group undertaking | 20,446
|                                                              |       
|                                                              | 20,484
|                                                              |       

8. Cash
  at Bank and in Hand

The Company holds deposits
  at banks, which pay interest based on LIBOR.

Swap counterparties are
  subject to a cash collateralisation agreement whereby dependent on the credit
  rating of the counterparty an amount may be payable by the counterparty to the
  Company. This amount is included in cash at bank and in hand, and within creditors:
  amounts falling due within one year. It is repayable when the swap agreements
  mature, or if earlier when the credit rating of the counterparty improves.

At 31 December 2004 an
  amount of £173,312,994 (2003: £203,736,381) was held which related
  to cash received under cash collateralisation agreements. The amount was held
  on deposit at Federal Funds with an effective interest rate to match the interest
  payable to the swap counterparty.

9. Creditors
  : amounts falling due within one year

|                                                        |        
|------------------------------------------------------- | -------
|                                                        | 2004   
|                                                        | £'000  
|                                                        |        
|Accrued interest payable                                | 20,447 
|Amounts due in respect of collaterialised cash received | 173,313
|                                                        |        
|                                                        | 193,760
|                                                        |        

10.Creditors : amounts falling due after more than one year

|                                            |          
|------------------------------------------- | ---------
|                                            | 2004     
|                                            | £'000    
|                                            |          
|Debts securities
        in issue (note 11) | 1,836,000
|                                            |          

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11. Debt Securities in
  Issue

|                                                       |          
|------------------------------------------------------ | ---------
|                                                       | 2004     
|                                                       | £'000    
|                                                       |          
|Series 1 Class A Floating Rate Notes 2015              | –        
|Series 1 Class B Floating Rate Notes 2040              | –        
|Series 1 Class C Floating Rate Notes 2040              | –        
|Series 2 Class A Fixed/Floating
    Rate Notes 2008    | 490,000  
|Series 2 Class B Floating Rate Notes 2040              | 22,000   
|Series 2 Class C Floating Rate Notes 2040              | 33,000   
|Series 3 Class A1 Floating Rate Notes 2040             | 550,000  
|Series 3 Class A2 Floating Rate Notes 2040             | 300,000  
|Series 3 Class B Floating Rate Notes 2040              | 25,000   
|Series 3 Class C Floating Rate Notes 2040              | 36,000   
|Series 3 Class D1 Floating Rate Notes 2040             | –        
|Series 3 Class D2 Floating Rate Notes 2040             | –        
|Series 3 Class D3 Floating Rate Notes 2040             | –        
|Series 4 Class A Fixed/Floating
    Rate Notes 2008    | 350,000  
|Series 4 Class B Floating Rate Notes 2040              | 11,000   
|Series 4 Class C Floating Rate Notes 2040              | 19,000   
|                                                       |          
|                                                       | 1,836,000
|                                                       |          
|The notes are denominated in the following currencies: |          
|UK Sterling - floating                                 | 580,000  
|US Dollars - floating                                  | 361,000  
|Swiss Francs - fixed                                   | 350,000  
|Euro - fixed                                           | 490,000  
|Euro - floating                                        | 55,000   
|                                                       |          
|                                                       | 1,836,000
|                                                       |          

Foreign currency notes
  are converted at the rate of exchange in the applicable hedging currency swap.

All the Class A Notes (irrespective
  of series) will rank pari passuand rateably without any preference or
  priority except, until enforcement of the security for the Notes, as to payments
  of principal in respect of which the Class A1 Notes will rank in priority to
  the Class A2 Notes and the Class A3 Notes, and the Class A2 Notes will rank
  in priority to the Class A3 Notes.

Payments in respect of
  the Class B,C and D Notes will only be made if, and to the extent that, there
  are sufficient funds after paying or providing for certain liabilities, including
  liabilities in respect of the Class A Notes. The Class B Notes rank after the
  Class A Notes in point of security but before the Class C and D Notes. The Class
  C Notes rank after the Class A and B Notes in point of security but before Class
  D Notes.

---





Interest is payable on
  the notes at variable rates based on the one-month US Dollar LIBOR, three-month
  Sterling and US Dollar LIBOR and three-month EURIBOR, except for the Series
  2 Class A notes, on which interest is paid at a fixed rate until July 2006,
  after which it is paid at variable rates based on the three-month EURIBOR and
  the Series 4 Class A notes, on which interest is paid at a fixed rate until
  October 2006, after which it is paid at variable rates based on the three-month
  CHF LIBOR. The weighted average interest rate for the fixed rate notes is 4.4%.

The Company's obligations
  to noteholders, and to other secured creditors, are secured under a deed of
  charge that grants security over all of its assets in favour of the security
  trustee. The principal assets of the Company are loans made to Holmes Funding
  Limited, a group company, whose obligations in respect of these loans, are secured
  under a deed of charge which grants security over all of its assets, primarily
  comprising sha res in a portfolio of residential mortgage loans, in favour of
  the security trustee. The security trustee holds this security for the benefit
  of all secured creditors of Holmes Funding Limited, including the Company.

The estimated fair values
  of the notes, based on the mid-market price on 31 December, are as follows:

|                                                |          
|----------------------------------------------- | ---------
|                                                | 2004     
|                                                | £'000    
|                                                |          
|Series 1 Class A Floating Rate Notes 2015       | –        
|Series 1 Class B Floating Rate Notes 2040       | –        
|Series 1 Class C Floating Rate Notes 2040       | –        
|Series 2 Class A Fixed/Floating Rate Notes 2008 | 507,017  
|Series 2 Class B Floating Rate Notes 2040       | 22,000   
|Series 2 Class C Floating Rate Notes 2040       | 33,000   
|Series 3 Class A1 Floating Rate Notes 2040      | 551,795  
|Series 3 Class A2 Floating Rate Notes 2040      | 299,950  
|Series 3 Class B Floating Rate Notes 2040       | 24,996   
|Series 3 Class C Floating Rate Notes 2040       | 35,995   
|Series 3 Class D1 Floating Rate Notes 2040      | –        
|Series 3 Class D2 Floating Rate Notes 2040      | –        
|Series 3 Class D3 Floating Rate Notes 2040      | –        
|Series 4 Class A Fixed/Floating Rate Notes 2008 | 361,543  
|Series 4 Class B Floating Rate Notes 2040       | 11,078   
|Series 4 Class C Floating Rate Notes 2040       | 19,472   
|                                                |          
|                                                | 1,866,846
|                                                |          

12.Financial
  Instruments

The Companys
  policies as regards derivatives and financial instruments are set out in the
  Report of the Directors on page 1 and the accounting policies on page 6. The
  Company does not trade in financial instruments. The following disclosures are
  made in respect of financial instruments. Short-term debtors and creditors are
  included in all of the following disclosures.

---





12(a) Maturity profile
  of financial liabilities

|                                                        |                |  |             |  |             | 
|------------------------------------------------------- | -------------- |  | ----------- |  | ----------- | 
|                                                        | Debt           |  |             |  |             | 
|                                                        | securities     |  | Other       |  | Total       | 
|                                                        | in
      issue |  | Liabilities |  | Liabilities | 
|2004                                                    | £'000          |  | £'000       |  | £'000       | 
|                                                        |                |  |             |  |             | 
|Within one year or less or on demand                    | –              |  | 193,760     |  | 193,760     | 
|More than two years but not more than five
       years | 840,000        |  | –           |  | 840,000     | 
|More than five years                                    | 996,000        |  | –           |  | 996,000     | 
|                                                        |                |  |             |  |             | 
|                                                        | 1,836,000      |  | 193,760     |  | 2,029,760   | 
|                                                        |                |  |             |  |             | 
|2003                                                    |                |  |             |  |             | 
|                                                        |                |  |             |  |             | 
|Within one year or less or on demand                    | –              |  | 225,823     |  | 225,823     | 
|More than two years but not more than five
       years | 490,000        |  | –           |  | 490,000     | 
|More than five years                                    | 2,035,750      |  | –           |  | 2,035,750   | 
|                                                        |                |  |             |  |             | 
|                                                        | 2,525,750      |  | 225,823     |  | 2,751,573   | 
|                                                        |                |  |             |  |             | 

There are no material undrawn committed borrowing
facilities.

12(b)  Interest
rate profile of financial assets and liabilities

After taking into account
    the cross currency swaps entered into by the Company, the interest rate profile
    of the Companys
    financial assets and liabilities was:

|             |           |  |           |  |          |  |                   | 
|------------ | --------- |  | --------- |  | -------- |  | ----------------- | 
|             |           |  |           |  |          |  | Weighted          | 
|             |           |  |           |  | Non-     |  | average           | 
|             |           |  | Floating  |  | interest |  | years
      until | 
|             | Total     |  | rate      |  | bearing  |  | maturity
      *  | 
|2004         | £'000     |  | £'000     |  | £'000    |  | Years             | 
|             |           |  |           |  |          |  |                   | 
|Assets:      |           |  |           |  |          |  |                   | 
|Sterling     | 2,029,811 |  | 2,009,327 |  | 20,484   |  | 0.1               | 
|             |           |  |           |  |          |  |                   | 
|Liabilities: |           |  |           |  |          |  |                   | 
|Sterling     | 2,029,760 |  | 2,009,313 |  | 20,447   |  | 0.1               | 
|             |           |  |           |  |          |  |                   | 

---





|2003         |           |  |           |  |        |  |     | 
|------------ | --------- |  | --------- |  | ------ |  | --- | 
|             |           |  |           |  |        |  |     | 
|Assets:      |           |  |           |  |        |  |     | 
|Sterling     | 2,751,624 |  | 2,729,499 |  | 22,125 |  | 0.1 | 
|             |           |  |           |  |        |  |     | 
|Liabilities: |           |  |           |  |        |  |     | 
|Sterling     | 2,751,573 |  | 2,729,486 |  | 22,087 |  | 0.1 | 
|             |           |  |           |  |        |  |     | 

|* | for non-interest bearing
      assets/liabilities only.
|- | -------------------------------------------------------

Benchmark rates for determining
  interest payments for the floating rate assets and liabilities are given in
  the note to the accounts relevant to the financial instrument type.

12(c) Fair
  values of financial assets and liabilities

The fair value of debt
  securities in issue is disclosed in note 11 to the accounts.

Fair value disclosures
  are not provided for loans to group undertakings, as there is no liquid and
  active market for such instruments. The estimated fair values of other assets
  and liabilities on the balance sheet are not materially different from their
  carrying amounts.

The estimated fair value
  of the cross currency swaps entered into by the Company as at 31 December 2004
  was an asset of £49,335,405 (2003: a liability of £177,193,990).
  The estimated fair value of the interest rate swap entered into by the Company
  as at 31 December 2004 was an asset of £102,885,127 (2003 : an asset of
  £110,403,157).

The cross currency swaps
  mature between June 2008 and July 2040.

The fair value of the instruments
  will largely be recognised after the end of the next financial year.

12(d) Currency profile

Taking into account the
  effect of derivative instruments, the Company did not have a material financial
  exposure to foreign exchange gains or losses on monetary assets and monetary
  liabilities denominated in foreign currencies at 31 December 2004 or 31 December
  2003.

13. Share capital

|                                         |       |  |       | 
|---------------------------------------- | ----- |  | ----- | 
|                                         | 2004  |  | 2003  | 
|                                         | £'000 |  | £'000 | 
|                                         |       |  |       | 
|Authorised:                              |       |  |       | 
|100,000 Ordinary shares
      of £1 each | 100   |  | 100   | 
|                                         |       |  |       | 
|Allotted and called
      up:            |       |  |       | 
|50,000 Ordinary shares
      of £1 each  | 50    |  | 50    | 
|                                         |       |  |       | 

49,998 Ordinary shares
  are partly paid to 25 pence. Two subscriber shares are fully paid.

---





14. Reconciliation of
  movements in shareholders' funds

|                                   |       |  |       | 
|---------------------------------- | ----- |  | ----- | 
|                                   | 2004  |  | 2003  | 
|                                   | £'000 |  | £'000 | 
|                                   |       |  |       | 
|Opening shareholders'
      funds  | 51    |  | 50    | 
|Retained profit for the
      year | –     |  | 1     | 
|                                   |       |  |       | 
|Closing shareholders'
      funds  | 51    |  | 51    | 
|                                   |       |  |       | 

15. Capital Commitments
  and Contingent Liabilities

There were no outstanding
  capital commitments or contingent liabilities at 31 December 2004 and 2003.

16. Related party disclosures

The Company has taken advantage
  of the exemption covered by paragraph 3 (c) of FRS8 'Related Party Disclosures'
  not to disclose transactions with entities that are part of the Holmes Group.

The group remunerates SPV
  Management Limited for administration services provided to Holmes Financing
  (No. 4) plc. The total amount paid relating to the Company in the period ended
  31 December 2004, by the group, was £14,394 (2003: £15,000).

17. Parent Undertaking
  and Controlling Party

The immediate parent of the
  Company is Holmes Holdings Limited, a company incorporated in Great Britain
  and registered in England and Wales, which prepares the only accounts into which
  the Company is consolidated.

SPV Management Limited, a
  company incorporated in Great Britain and registered in England and Wales, holds
  all of the beneficial interest in the issued shares of Holmes Holdings Limited
  on a discretionary trust for persons employed as nurses in the United Kingdom
  and for charitable purposes.

The administration, operations,
  accounting and financial reporting functions of the Company are performed by
  Abbey National plc, which is incorporated in Great Britain.

Copies of all sets of group
  accounts, which include the results of the Company, are available from Abbey
  Secretariat, Abbey National House, 2 Triton Square, Regent's Place, London,
  NW1 3AN.

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