BANKING group Northern Rock said a weaker housing market would squeeze demand for mortgages in 2005 as it unveiled a 13pc hike in annual profits.
Northern Rock said its strategic targets remained unchanged and the quality of its loan portfolio meant it was confident of further growth even in a slowing market.
Lending volumes remained strong and its share of the UK mortgage market rose to more than 14% in the second half of 2004 and stood at 11.2% for the full year.
Pre-tax profits of £431.2 million were in line with the market consensus and set a new record after beating the £386.8 million reported a year ago.
Net lending also reached an all-time high during 2004, up 51.9pc to £12.9 billion and faster than the 34.8pc growth in gross lending to £23.3 billion.
Chief executive Adam Applegarth expected little change in the housing market for "at least the next two years".
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