Britain mortgage lender HBOS saw no let-up in Britain's house-price boom as it reported a good start to the year today and said trading was in line with expectations.
"We remain committed to the challenging targets that we have set for 2004," Mr Dennis Stevenson, chairman of Britain's fourth-largest bank, told shareholders.
"The housing market is robust with house price growth likely to end the year much stronger than originally forecast."
House prices have raced ahead in recent years amid low interest rates and a shortage of homes. The International Monetary Fund warned last week housing market crashes in countries such as Britain could harm economic recovery.
HBOS said it saw interest rates rising further from their historic lows and forecast its share of mortgage lending would hold at or slightly below last year's 25 per cent.
Aggressive newcomers to the competitive home loan market are seeking to undercut bigger lenders.
HBOS, formed from the merger of Halifax and Bank of Scotland, said retail sales volumes were on target and tight cost controls coupled with interest-rate moves should ensure the division's profitability met expectations.