EXHIBIT 
  10.20

HOLMES
  FUNDING LIMITED

REPORT
  AND ACCOUNTS

FOR THE
  YEAR ENDED 31 DECEMBER 2004

Registered
  in England and Wales No. 3982428

HOLMES FUNDING LIMITED

Report of the directors

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

The principal activity
  of the Company is to acquire an interest in a portfolio of mortgage loans and
  enter into financial arrangements with other group companies in that connection.
  No future changes are envisiged.

The Company invests in
  beneficial interests in the assets of Holmes Trustees Limited ("the Trust"),
  which assets comprise mortgage loans secured on residential property in England,
  Scotland and Wales. The Company receives a share of income from the Trust in
  proportion to its share of the total mortgage assets of the Trust.

During the year the Company
  purchased a further beneficial interest in the assets of the Trust of £3.9
  billion on 1 April. This purchase was financed by a loan from Holmes Financing
  (No. 8) plc. Holmes Trustees Limited and Holmes Financing (No. 8) plc are both
  group undertakings.

The profit for the year
  on ordinary activities after tax amounted to £12,287,000 (2003 - loss
  £5,011,000).

The Directors do not recommend
  the payment of a dividend (2003 - £nil).

The retained profit of
  £12,287,000 (2003 - loss £5,011,000)"has been transferred to reserves.

The profit in the year
  has arisen as a result of the change in provisions made against the Company's
  investment. On the release or utilisation of this provision in future years,
  the Directors anticipate that the Company will continue to make a profit.

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 held one share in the Company. Holmes
  Holdings Limited and M. McDermott jointly held the other share.

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.

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.

The Directors confirm that
  they are satisfied that Holmes Funding Ltd 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.

The Company has elected to dispense with the obligation to appoint
  auditors annually and, accordingly Deloitte & Touche LLP will be the auditors
  of the Company for the forthcoming financial year under the provisions of section
  386 (2) of the Companies Act 1985.

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 FUNDING LIMITED

We have audited the financial
  statements of Holmes Funding Limited for the year ended 31 December 2004 which
  comprise the profit and loss account, the balance sheet and the related notes
  1 to 16. These financial statements 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.

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 profit 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 FUNDING LIMITED

Profit and loss account
  
  For the year ended 31 December 2004

|                                                                                    |      |  |          |   |          |  
|----------------------------------------------------------------------------------- | ---- |  | -------- | - | -------- | -
|                                                                                    | Note |  | 2004     |   | 2003     |  
|                                                                                    |      |  | £'000    |   | £'000    |  
|                                                                                    |      |  |          |   |          |  
|Interest receivable and similar income                                              | 2    |  | 804,668  |   | 650,204  |  
|Interest payable                                                                    | 3    |  | (752,827 | ) | (599,306 | )
|Net interest income                                                                 |      |  | 51,841   |   | 50,898   |  
|                                                                                    |      |  |          |   |          |  
|Administrative expenses                                                             |      |  | (51,640  | ) | (50,440  | )
|Provision against investment in Trust property                                      | 6    |  | 17,362   |   | (7,618   | )
|                                                                                    |      |  |          |   |          |  
|OPERATING PROFIT/(LOSS)
      ON ORDINARY ACTIVITIES BEFORE TAXATION                | 4    |  | 17,563   |   | (7,160   | )
|Tax (charge)/credit on profit/(loss) on ordinary activities                         | 5    |  | (5,268   | ) | 2,149    |  
|                                                                                    |      |  |          |   |          |  
|                                                                                    |      |  |          |   |          |  
|PROFIT/(LOSS) ON
      ORDINARY ACTIVITIES AFTER TAXATION AND RETAINED FOR THE YEAR | 13   |  | 12,295   |   | (5,011   | )
|Profit and loss account brought forward                                             |      |  | (15,270  | ) | (10,259  | )
|                                                                                    |      |  |          |   |          |  
|Profit and loss account carried forward                                             |      |  | (2,975   | ) | (15,270  | )
|                                                                                    |      |  |          |   |          |  

There are no recognised
  gains or losses in either the current or previous financial years other than
  the profit for the financial year and loss for the prior 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 and the increase from the prior year stated above and their historical
  cost equivalents.

All transactions are derived
  from continuing operations.

---





HOLMES FUNDING LIMITED

Balance sheet 
  As at 31 December 2004

|                                                              |      |  |            |   |            |  
|------------------------------------------------------------- | ---- |  | ---------- | - | ---------- | -
|                                                              | Note |  | 2004       |   | 2003       |  
|                                                              |      |  | £'000      |   | £'000      |  
|                                                              |      |  |            |   |            |  
|FIXED ASSETS                                                  |      |  |            |   |            |  
|Beneficial interest in mortgage portfolio                     | 6    |  | 13,168,370 |   | 13,341,978 |  
|CURRENT ASSETS                                                |      |  |            |   |            |  
|Debtors                                                       | 7    |  | 27,670     |   | 24,751     |  
|Deferred taxation asset                                       | 9    |  | 1,372      |   | 6,618      |  
|Cash at bank and in hand                                      | 8    |  | 2,890,818  |   | 1,200,597  |  
|                                                              |      |  |            |   |            |  
|                                                              |      |  | 2,919,860  |   | 1,231,966  |  
|CREDITORS - amounts
      falling due within one year         | 10   |  | 1,362,140  |   | 743,837    |  
|                                                              |      |  |            |   |            |  
|NET CURRENT ASSETS                                            |      |  | 1,557,720  |   | 488,129    |  
|                                                              |      |  |            |   |            |  
|TOTAL ASSETS LESS
      CURRENT LIABILITIES                   |      |  | 14,726,090 |   | 13,830,107 |  
|                                                              |      |  |            |   |            |  
|CREDITORS- amounts
      falling due after more than one year | 11   |  | 14,729,065 |   | 13,845,377 |  
|                                                              |      |  |            |   |            |  
|NET LIABILITIES                                               |      |  | (2,975     | ) | (15,270    | )
|CAPITAL AND RESERVES                                          |      |  |            |   |            |  
|Called up share capital                                       | 12   |  | –          |   | –          |  
|Profit and loss account                                       |      |  | (2,975     | ) | (15,270    | )
|                                                              |      |  |            |   |            |  
|EQUITY SHAREHOLDERS'
      FUNDS                              | 13   |  | (2,975     | ) | (15,270    | )
|                                                              |      |  |            |   |            |  

The financial statements
  on pages 5 to 10 were approved by the Board of Directors on 17 June 2005

Signed on behalf of the
  Board of Directors



M McDermott 
  Director

---





HOLMES FUNDING LIMITED

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 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 assets   	  Investments held as fixed assets are stated at cost less provision for any impairment.

ProvisionsSpecific provisions are made against loans and advances which comprise the Trust property in which the Company has a beneficial interest, when, as a result of regular appraisals of the assets, it is considered that recovery is doubtful. A general provision is made against loans and advances to cover bad and doubtful debts that have not been separately identified but which are know from experience to be present in any portfolio of loans and advances. The specific and general provisions are deducted from loans and advances. Provisions made during the year, less amounts released and recoveries of amounts written off in previous years are charged to the profit and loss account.

Deferred considerationDeferred consideration is payable to the originator of the loans and advances to customers, which is based upon the profitability of the Company before the charge for the general provision for bad and doubtful debts. This has resulted in a loss to date, however the directors anticipate that the Company will make a profit over the life of the mortgage portfolio.

Value added tax   	  Value added tax is not recoverable by the Company and is included with it's related cost.

DerivativesTransactions are undertaken in derivative financial
instruments, "derivatives", which include interst rate swaps. Derivatives are
entered into for the purpose of eliminating risk from potential movements in
interest 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.

Cash flow statement The Company is a wholly owned
  subsidiary of Holmes Holdings Limited, a Company incorporated in Great Britain.
  Accordingly the Company is not required to produce a cash flow statement as
  prescribed in paragraph 5 (a) of FRS1 (revised 1996), "Cash flow statements".

Deferred taxation Deferred taxation is provided
  on all timing differences that have not reversed before the balance sheet date
  at the rate of tax expected to apply when those timing differences will reverse.
  Deferred tax assets are recognised to the extent that they are regarded as recoverable.

Costs relating to
  acquisition Costs relating to acquisition
  of the Trust asset are deferred and charged over the period in which interest
  is earned on the asset.

2. Interest receivable and similar income

|                                                                                     |        
|------------------------------------------------------------------------------------ | -------
|                                                                                     | 2004   
|                                                                                     | £'000  
|                                                                                     |        
|Income from beneficial interest in mortgage portfolio                                | 742,873
|Expense from derivatives
    used to hedge beneficial interest in mortgage portfolio | (4,130 
|Bank interest receivable                                                             | 65,925 
|                                                                                     |        
|                                                                                     | 804,668
|                                                                                     |        

The mortgage portfolio
  is held on trust by Holmes Trustees Limited, a group undertaking.

All of the income is derived
  from one geographical segment.

3. Interest payable

|                                                  |        
|------------------------------------------------- | -------
|                                                  | 2004   
|                                                  | £'000  
|                                                  |        
|Interest payable on loans from group undertakings | 749,606
|Interest payable on start-up loans                | 3,221  
|                                                  |        
|                                                  | 752,827
|                                                  |        

4. Profit/(loss) on ordinary
  activities before taxation

Loss on ordinary activities
before taxation is stated after charging:

|                                          |      
|----------------------------------------- | -----
|                                          | 2004 
|                                          | £'000
|                                          |      
|Auditors' remuneration
      - audit fees | 127  
|                                          |      

The Company had no employees
(2003: none) other than its Directors.

No emoluments were paid
  to the Directors by the Company during the year (2003: £nil).

---





5. Tax charge/(credit)
  on profit/(loss) on ordinary activities

|                                                                                                                                                |       
|----------------------------------------------------------------------------------------------------------------------------------------------- | ------
|                                                                                                                                                | 2004  
|                                                                                                                                                | £'000 
|                                                                                                                                                |       
|UK Corporation Tax
      for the year at 30% (2003: 30%)                                                                                        | 22    
|Deferred taxation                                                                                                                               | 5,246 
|Tax charge/(credit)                                                                                                                             | 5,268 
|                                                                                                                                                |       
|The Company pays corporation
      tax at 30% with marginal relief.                                                                             |       
|                                                                                                                                                |       
|The tax charge in the
    year arises due to the disallowable general provision on the Trust mortgage
       income.                            |       
|                                                                                                                                                |       
|The tax assessed for
       the year is lower than the standard 30% rate of corporation tax in the
    UK. The differences are explained below: |       
|                                                                                                                                                |       
|Profit on ordinary
      activities before tax                                                                                                  | 17,563
|                                                                                                                                                |       
|Tax at 30% (2003: 30%)                                                                                                                          | 5,268 
|Non tax-deductable
      general provisions                                                                                                     | (5,246
|Benefit of small companies
      corporation tax rate                                                                                           | –     
|Current tax charge
      for the year                                                                                                           | 22    

6. Beneficial interest
  in mortgage portfolio

|                                                     |           
|---------------------------------------------------- | ----------
|                                                     | 2004      
|                                                     | £'000     
|                                                     |           
|Cost:                                                |           
|At 1 January                                         | 13,364,715
|Additions                                            | 3,983,790 
|Capital repayments                                   | (4,174,679
|                                                     |           
|At 31 December                                       | 13,173,826
|                                                     |           
|Provisions:                                          |           
|At 1 January                                         |           
|General                                              | 22,061    
|Specific                                             | 676       
|Transfer from profit and loss account                | (17,362   
|Irrecoverable amounts written back/(off)             | 81        
|                                                     |           
|At 31 December                                       | 5,456     
|                                                     |           
|Being:                                               |           
|General                                              | 4,570     
|Specific                                             | 886       
|                                                     | 5,456     
|Net book value:                                      |           
|                                                     |           
|At 31 December                                       | 13,168,370
|                                                     |           
|Repayable:                                           |           
|On demand or at short notice                         | 46,164    
|In not more than three months                        | 15,145    
|In more than three months but not more than one year | 229,763   
|In more than one year but not more than five years   | 1,458,608 
|In more than five years                              | 11,424,146
|                                                     |           
|At 31 December 2004                                  | 13,173,826
|                                                     |           
|Fixed rate                                           | 2,784,954 
|Variable rate                                        | 10,388,872
|                                                     |           
|Less: provisions (see note 4)                        | (5,456    
|                                                     | 13,168,370
|                                                     |           

---





The mortgage portfolio
  in which the Company holds a beneficial interest is held on trust for the Company
  and the originator of the mortgage loans by Holmes Trustees Limited, a group
  undertaking. During the year the company increased its interest in the Trust
  property in one tranche. The mortgage loans are secured on residential property
  in England and Wales. At 31 December 2004 the total mortgage asset held on trust
  for the beneficiaries amounted to £28,987,230,878 (2003 - £23,162,383,000).

7. Debtors

|                                                                        |          
|----------------------------------------------------------------------- | ---------
|                                                                        | 2004     
|                                                                        | £'000    
|                                                                        |          
|Other debtors                                                           | 23,646   
|Accrued interest receivable                                             | 4,024    
|                                                                        |          
|8. Cash at Bank
      and in Hand                                       |          
|                                                                        |          
|                                                                        | 2004     
|                                                                        | £'000    
|                                                                        |          
|Guaranteed Investment
      Contract                                    | 2,050,263
|Share of Trust cash                                                     | 840,555  
|                                                                        |          
|                                                                        | 2,890,818
|                                                                        |          
|The Guaranteed Investment Contract pays interest based on LIBOR.        |          
|                                                                        |          
|9. Deferred taxation
      asset                                        |          
|                                                                        |          
|                                                                        | 2004     
|                                                                        | £'000    
|                                                                        |          
|As at 1 January                                                         | 6,618    
|Transfer to profit
      and loss account                               | (5,246   
|As at 31 December                                                       | 1,372    
|Provided on:                                                            |          
|General provision against
    beneficial interest in mortgage portfolio | 1,372    

The deferred tax asset
  has been recognised under FRS 19 (Deferred tax) since it is considered more
  likely than not that there will be sufficient future profits against which the
  future reversal of the general provision can be deducted.

10. Creditors :
  amounts falling due within one year

|                                  |          
|--------------------------------- | ---------
|                                  | 2004     
|                                  | £'000    
|                                  |          
|Loans from group undertakings     | 1,001,462
|Amounts due to group undertakings | 177,655  
|Corporation tax                   | 22       
|Other creditors                   | 183,001  
|Accrued interest payable          | –        
|                                  |          
|                                  | 1,362,140
|                                  |          

---





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

|                                      |           
|------------------------------------- | ----------
|                                      | 2004      
|                                      | £'000     
|                                      |           
|Loans from group undertakings         | 14,508,861
|Start-up loans                        | 33,980    
|Other creditors                       | 186,224   
|                                      | 14,729,065
|The amounts are repayable as follows: |           
|                                      |           
|Due 2 - 5 years                       | 5,623,173 
|Due over 5 years                      | 9,105,892 
|                                      |           
|Total                                 | 14,729,065
|                                      |           

Interest payable on the
  loans from group undertakings and the start-up loans is based on LIBOR. Amounts
  due over 5 years are paid in order of priority when cash is available after
  other commitments have been fulfilled.

12. Share capital

|                                                             |        
|------------------------------------------------------------ | -------
|                                                             | 2004   
|                                                             | £      
|                                                             |        
|Authorised:                                                  |        
|100 Ordinary shares
      of £1 each                         | 100    
|                                                             |        
|Allotted and called
      up:                                |        
|2 Ordinary shares of
      £1 each                           | 2      
|                                                             |        
|13. Reconciliation
      of movements in shareholders' funds |        
|                                                             |        
|                                                             | 2004   
|                                                             | £'000  
|                                                             |        
|Opening shareholders'
      funds                            | (15,270
|Retained profit for
      the year                           | 12,295 
|Closing shareholders'
      funds                            | (2,975 
|                                                             |        

14. Capital Commitments
  and Contingent Liabilities

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

15. 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.

16. 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 shares in the Company (one jointly with M McDermott as nominee)
  as trustee under a discretionary charitable trust dated 17 February 1999 for
  the benefit of nurses employed in the UK and for charities.

The administration, operations,
  accounting and financial reporting functions of the Company are performed by
  Abbey National plc, which is incorporated in Great Britain. During the year,
  Abbey National plc has delegated administration and servicing functions in respect
  of the loans on behalf of the mortgages' trustee and the beneficiaries to a
  service provider.

---