Exhibit
  10.19

HOLMES FINANCING (NO 7) PLC

REPORT AND ACCOUNTS

FOR THE YEAR ENDED 31
DECEMBER 2004

Registered in England and
Wales No. 4645659

---





HOLMES
  FINANCING (NO 7) PLC Report of theDirectors

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 - £nil).  The Directors do not recommend the payment of a dividend (2003 - £nil).  	 The retained profit of £nil (2003 - £nil)
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 and Euros.  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.7) 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 7) PLC

We have audited the financial statements of Holmes Financing (No 7) 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 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, 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 & ToucheLLP
  Chartered Accountants and Registered Auditors
  London

---





HOLMES FINANCING (NO 7) PLC

Profit and loss account
  For the year ended 31 December 2004

|                                                                               |      |  |         |   |             |  
|------------------------------------------------------------------------------ | ---- |  | ------- | - | ----------- | -
|                                                                               |      |  |         |   | Period 23   |  
|                                                                               |      |  |         |   | Jan 2003 to |  
|                                                                               |      |  |         |   | 31 Dec      |  
|                                                                               | Note |  | 2004    |   | 2003        |  
|                                                                               |      |  | £'000   |   | £'000       |  
|                                                                               |      |  |         |   |             |  
|Interest receivable                                                            | 2    |  | 93,825  |   | 70,400      |  
|                                                                               |      |  |         |   |             |  
|Interest payable                                                               | 3    |  | (93,825 | ) | (70,400     | )
|                                                                               |      |  |         |   |             |  
|                                                                               |      |  |         |   |             |  
|Net interest income                                                            |      |  | –       |   | –           |  
|                                                                               |      |  |         |   |             |  
|OPERATING
    PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION                    | 4    |  | –       |   | –           |  
|Tax on profit on ordinary activities                                           | 5    |  | –       |   | –           |  
|                                                                               |      |  |         |   |             |  
|PROFIT
    ON ORDINARY ACTIVITIES AFTER TAXATION AND
    RETAINED FOR THE YEAR |      |  | –       |   | –           |  
|Profit and loss account brought forward                                        |      |  | –       |   | –           |  
|                                                                               |      |  |         |   |             |  
|Profit and loss account carried forward                                        |      |  | –       |   | –           |  
|                                                                               |      |  |         |   |             |  

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 7) PLC

Balance sheet
  As at 31 December 2004

|                                                                              |      |  |           |  |             |  
|----------------------------------------------------------------------------- | ---- |  | --------- |  | ----------- | -
|                                                                              |      |  |           |  | Period 23   |  
|                                                                              |      |  |           |  | Jan 2003 to |  
|                                                                              |      |  |           |  | 31 Dec      |  
|                                                                              | Note |  | 2004      |  | 2003        |  
|                                                                              |      |  | £'000     |  | £'000       |  
|                                                                              |      |  |           |  |             |  
|FIXED ASSETS                                                                  |      |  |           |  |             |  
|Loans to Group Undertaking                                                    | 6    |  | 1,882,160 |  | 2,403,550   |  
|                                                                              |      |  |           |  |             |  
|CURRENT ASSETS                                                                |      |  |           |  |             |  
|Debtors                                                                       | 7    |  | 20,746    |  | 20,111      |  
|Cash at bank and in hand                                                      | 8    |  | 13        |  | 13          |  
|                                                                              |      |  |           |  |             |  
|                                                                              |      |  | 20,759    |  | 20,124      |  
|                                                                              |      |  |           |  |             |  
|CREDITORS - amounts falling due within one year                               | 9    |  | 20,709    |  | 502,394     |  
|                                                                              |      |  |           |  |             |  
|NET CURRENT ASSETS                                                            |      |  | 50        |  | (482,270    | )
|                                                                              |      |  |           |  |             |  
|                                                                              |      |  |           |  |             |  
|TOTAL ASSETS LESS CURRENT LIABILITIES                                         |      |  | 1,882,210 |  | 1,921,280   |  
|                                                                              |      |  |           |  |             |  
|CREDITORS -
           amounts falling due after more thanone
           year | 10   |  | 1,882,160 |  | 1,921,230   |  
|                                                                              |      |  |           |  |             |  
|NET ASSETS                                                                    |      |  | 50        |  | 50          |  
|                                                                              |      |  |           |  |             |  
|                                                                              |      |  |           |  |             |  
|CAPITAL AND RESERVES                                                          |      |  |           |  |             |  
|                                                                              |      |  |           |  |             |  
|Called up share capital                                                       | 13   |  | 50        |  | 50          |  
|Profit and loss account                                                       |      |  | –         |  | –           |  
|                                                                              |      |  |           |  |             |  
|EQUITY SHAREHOLDERS' FUNDS                                                    | 14   |  | 50        |  | 50          |  
|                                                                              |      |  |           |  |             |  

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



---





HOLMES FINANCING (NO 7) 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 account
  Due 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 receivableInterest receivable
is recognised on an accrual basis.

Fixed assets
  Loans 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 currency
  Interest receivable and payable 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 securitiesDebt Securities in Issue
are stated at net proceeds.

Cash flow statement
  The 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.

---







HOLMES FINANCING (NO 7) PLC

NOTES
TO THE ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2004

2.Interest
receivable

|                                                          |        |  |                       | 
|--------------------------------------------------------- | ------ |  | --------------------- | 
|                                                          |        |  | Period
            23 | 
|                                                          |        |  | Jan
            2003  | 
|                                                          |        |  | to
            31 Dec | 
|                                                          | 2004   |  | 2003                  | 
|                                                          | £'000  |  | £'000                 | 
|                                                          |        |  |                       | 
|Interest receivable
    from group companies (see note 6) | 93,825 |  | 70,400                | 
|                                                          |        |  |                       | 
|                                                          | 93,825 |  | 70,400                | 
|                                                          |        |  |                       | 

3. Interest
payable

|                                                       |        |  |                       | 
|------------------------------------------------------ | ------ |  | --------------------- | 
|                                                       |        |  | Period
            23 | 
|                                                       |        |  | Jan
            2003  | 
|                                                       |        |  | to
            31 Dec | 
|                                                       | 2004   |  | 2003                  | 
|                                                       | £'000  |  | £'000                 | 
|                                                       |        |  |                       | 
|Interest payable on
    debt securities (see note 11). | 93,825 |  | 70,400                | 
|                                                       |        |  |                       | 
|                                                       | 93,825 |  | 70,400                | 
|                                                       |        |  |                       | 

4. Profit
        on ordinary
activities beforetaxation

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

|                                                   |       |  |           | 
|-------------------------------------------------- | ----- |  | --------- | 
|                                                   |       |  | Period 23 | 
|                                                   |       |  | Jan 2003  | 
|                                                   |       |  | to 31 Dec | 
|                                                   | 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

|                                                     |           |  |           | 
|---------------------------------------------------- | --------- |  | --------- | 
|                                                     |           |  | Period 23 | 
|                                                     |           |  | Jan 2003  | 
|                                                     |           |  | to 31 Dec | 
|                                                     | 2004      |  | 2003      | 
|                                                     | £'000     |  | £'000     | 
|                                                     |           |  |           | 
|Repayable:                                           |           |  |           | 
|Within one year or less or on demand                 | –         |  | 482,320   | 
|More than two years but
    not more than five years | 803,340   |  | 803,340   | 
|More than five years                                 | 1,078,820 |  | 1,117,890 | 
|                                                     |           |  |           | 
|                                                     | 1,882,160 |  | 2,403,550 | 
|                                                     |           |  |           | 

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

7. Debtors

|                                                                   |        |  |           | 
|------------------------------------------------------------------ | ------ |  | --------- | 
|                                                                   |        |  | Period 23 | 
|                                                                   |        |  | Jan 2003  | 
|                                                                   |        |  | to 31 Dec | 
|                                                                   | 2004   |  | 2003      | 
|                                                                   | £'000  |  | £'000     | 
|                                                                   |        |  |           | 
|Called up
    share capital not paid - due from parent undertaking | 37     |  | 37        | 
|Accrued interest
    receivable on loans to group undertaking      | 20,709 |  | 20,074    | 
|                                                                   |        |  |           | 
|                                                                   | 20,746 |  | 20,111    | 
|                                                                   |        |  |           | 

8.Cash
at Bank and in Hand

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

9.Creditors
        : amounts
falling due within one year

|                                           |        |  |                       | 
|------------------------------------------ | ------ |  | --------------------- | 
|                                           |        |  | Period
            23 | 
|                                           |        |  | Jan
            2003  | 
|                                           |        |  | to
            31 Dec | 
|                                           | 2004   |  | 2003                  | 
|                                           | £'000  |  | £'000                 | 
|                                           |        |  |                       | 
|Accrued
        interest payable           | 20,709 |  | 20,074                | 
|Debt securities
        in issue (note 11) | –      |  | 482,320               | 
|                                           |        |  |                       | 
|                                           | 20,709 |  | 502,394               | 
|                                           |        |  |                       | 

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

|                                    |           |  |           | 
|----------------------------------- | --------- |  | --------- | 
|                                    | £'000     |  | £'000     | 
|                                    |           |  |           | 
|Debts securities in issue (note 11) | 1,882,160 |  | 1,921,230 | 
|                                    |           |  |           | 

---





11. Debt
Securities in Issue

|                                                |           |  |                       | 
|----------------------------------------------- | --------- |  | --------------------- | 
|                                                |           |  | Period
            23 | 
|                                                |           |  | Jan
            2003  | 
|                                                |           |  | to
            31 Dec | 
|                                                | 2004      |  | 2003                  | 
|                                                | £'000     |  | £'000                 | 
|                                                |           |  |                       | 
|Series 1 Class A Floating
    Rates Notes 2004  | –         |  | 482,320               | 
|Series 1 Class B Floating
    Rates Notes 2040  | –         |  | 14,470                | 
|Series 1 Class M Floating
    Rates Notes 2040  | –         |  | 24,600                | 
|Series 2 Class A Floating
    Rates Notes 2008  | 803,340   |  | 803,340               | 
|Series 2 Class B Floating
    Rates Notes 2040  | 24,100    |  | 24,100                | 
|Series 2 Class M Floating
    Rates Notes 2040  | 40,970    |  | 40,970                | 
|Series 3 Class A Floating
    Rates Notes 2040  | 321,000   |  | 321,000               | 
|Series 3 Class B Floating
    Rates Notes 2040  | 15,000    |  | 15,000                | 
|Series 3 Class M Floating
    Rates Notes 2040  | 20,000    |  | 20,000                | 
|Series 4 Class A1 Floating
    Rates Notes 2040 | 341,500   |  | 341,500               | 
|Series 4 Class A2 Floating
    Rates Notes 2040 | 250,000   |  | 250,000               | 
|Series 4 Class B Floating
    Rates Notes 2040  | 28,000    |  | 28,000                | 
|Series 4 Class M Floating
    Rates Notes 2040  | 38,250    |  | 38,250                | 
|                                                |           |  |                       | 
|                                                | 1,882,160 |  | 2,403,550             | 
|                                                |           |  |                       | 
|The notes are denominated in the following      |           |  |                       | 
|currencies:                                     |           |  |                       | 
|                                                |           |  |                       | 
|UK Sterling                                     | 285,000   |  | 285,000               | 
|US Dollars                                      | 1,189,410 |  | 1,710,800             | 
|Euro                                            | 407,750   |  | 407,750               | 
|                                                |           |  |                       | 
|                                                | 1,882,160 |  | 2,403,550             | 
|                                                |           |  |                       | 

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 and M 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 M Notes.

Interest is payable on the notes at variable rates based on the three-month Sterling LIBOR, the three-month US Dollar LIBOR and three-month EURIBOR.

---





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 securitytrustee.  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 shares 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:

|                                                |           |  |           | 
|----------------------------------------------- | --------- |  | --------- | 
|                                                |           |  | Period 23 | 
|                                                |           |  | Jan 2003  | 
|                                                |           |  | to 31 Dec | 
|                                                | 2004      |  | 2003      | 
|                                                | £'000     |  | £'000     | 
|                                                |           |  |           | 
|Series 1 Class A Floating
    Rates Notes 2004  | –         |  | 482,320   | 
|Series 1 Class B Floating
    Rates Notes 2040  | –         |  | 14,367    | 
|Series 1 Class M Floating
    Rates Notes 2040  | –         |  | 24,418    | 
|Series 2 Class A Floating
    Rates Notes 2008  | 803,144   |  | 803,501   | 
|Series 2 Class B Floating
    Rates Notes 2040  | 24,097    |  | 23,922    | 
|Series 2 Class M Floating
    Rates Notes 2040  | 40,965    |  | 40,601    | 
|Series 3 Class A Floating
    Rates Notes 2040  | 320,961   |  | 321,000   | 
|Series 3 Class B Floating
    Rates Notes 2040  | 15,174    |  | 15,209    | 
|Series 3 Class M Floating
    Rates Notes 2040  | 20,372    |  | 20,030    | 
|Series 4 Class A1 Floating
    Rates Notes 2040 | 341,511   |  | 342,490   | 
|Series 4 Class A2 Floating
    Rates Notes 2040 | 251,931   |  | 250,683   | 
|Series 4 Class B Floating
    Rates Notes 2040  | 28,000    |  | 28,092    | 
|Series 4 Class M Floating
    Rates Notes 2040  | 38,249    |  | 38,307    | 
|                                                |           |  |           | 
|                                                | 1,884,404 |  | 2,404,940 | 
|                                                |           |  |           | 

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           |  |             |  |             | 
|                                                        | securitie      |  |             |  |             | 
|                                                        | s
          in |  | Other       |  | Total       | 
|                                                        | issue          |  | Liabilities |  | Liabilities | 
|2004                                                    | £'000          |  | £'000       |  | £'000       | 
|                                                        |                |  |             |  |             | 
|Within one year or less or on demand                    | –              |  | 20,709      |  | 20,709      | 
|More than one year but
    not more than two years      | –              |  | –           |  |             | 
|More than two years but
    not more than five years    | 803,340        |  | –           |  | 803,340     | 
|More than five years                                    | 1,078,820      |  | –           |  | 1,078,820   | 
|                                                        |                |  |             |  |             | 
|                                                        | 1,882,160      |  | 20,709      |  | 1,902,869   | 
|                                                        |                |  |             |  |             | 
|                                                        |                |  |             |  |             | 
|2003                                                    |                |  |             |  |             | 
|                                                        |                |  |             |  |             | 
|Within one year or less or on demand                    | 482,320        |  | 20,074      |  | 502,394     | 
|More than one year but
       not more than two years   | –              |  | –           |  |             | 
|More than two years but
       not more than five years | 803,340        |  | –           |  | 803,340     | 
|More than five years                                    | 1,117,890      |  | –           |  | 1,117,890   | 
|                                                        |                |  |             |  |             | 
|                                                        | 2,403,550      |  | 20,074      |  | 2,423,624   | 
|                                                        |                |  |             |  |             | 
|                                                        |                |  |             |  |             | 
|There are no material undrawn committed                 |                |  |             |  |             | 
|borrowing facilities.                                   |                |  |             |  |             | 

12(b)Interest
rate profile of financial assets andliabilities

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 |  
|             |           |  |           |  |          |  | average  |  
|             |           |  |           |  | Non-     |  | years    |  
|             |           |  | Floating  |  | interest |  | until    |  
|             | Total     |  | rate      |  | bearing  |  | maturity | *
|2004         | £'000     |  | £'000     |  | £'000    |  | Years    |  
|             |           |  |           |  |          |  |          |  
|             |           |  |           |  |          |  |          |  
|Assets:      |           |  |           |  |          |  |          |  
|Sterling     | 1,902,919 |  | 1,882,173 |  | 20,746   |  | 0.1      |  
|             |           |  |           |  |          |  |          |  
|             |           |  |           |  |          |  |          |  
|Liabilities: |           |  |           |  |          |  |          |  
|Sterling     | 1,902,869 |  | 1,882,160 |  | 20,709   |  | 0.1      |  
|             |           |  |           |  |          |  |          |  
|             |           |  |           |  |          |  |          |  
|2003         |           |  |           |  |          |  |          |  
|Assets:      |           |  |           |  |          |  |          |  
|Sterling     | 2,423,674 |  | 2,403,563 |  | 20,111   |  | 0.1      |  
|             |           |  |           |  |          |  |          |  
|             |           |  |           |  |          |  |          |  
|Liabilities: |           |  |           |  |          |  |          |  
|Sterling     | 2,423,624 |  | 2,403,550 |  | 20,074   |  | 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 a liability of £230,051,636 (2003 : a liability of £222,162,130).

The cross currency
swaps mature between January 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

|                                                                                            |       |  |           | 
|------------------------------------------------------------------------------------------- | ----- |  | --------- | 
|                                                                                            |       |  | Period 23 | 
|                                                                                            |       |  | Jan 2003  | 
|                                                                                            |       |  | to 31 Dec | 
|                                                                                            | 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. 2 subscriber shares are fully paid. |       |  |           | 

14.Reconciliation
of movements in shareholders'funds

|                                   |       |  |           | 
|---------------------------------- | ----- |  | --------- | 
|                                   |       |  | Period 23 | 
|                                   |       |  | Jan 2003  | 
|                                   |       |  | to 31 Dec | 
|                                   | 2004  |  | 2003      | 
|                                   | £'000 |  | £'000     | 
|                                   |       |  |           | 
|Opening shareholders' funds        | 50    |  | 50        | 
|Retained profit for the
      year | –     |  | –         | 
|                                   |       |  |           | 
|Closing shareholders'
      funds  | 50    |  | 50        | 
|                                   |       |  |           | 

---





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. 7) plc. The total amount
        paid relating to the Company in the period ended 31 December 2004, by
      the group,
was £14,394 (2003: £7,000).

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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